BY POLYCARP MACHIRA
4th October 2009
The amount of money the Indian firm is charging to lease used locomotives and wagons over five years could buy ten brand new locomotives and 48 new passenger coaches.
It swept into the country under the guise of a serious investor ready to pour billions of shillings into saving the former Tanzania Railways Corporation (TRC)which in 2006 was at the brink of collapse, thanks to the poor management of the State-owned firms that clouded the post-socialism era of the 1990s.
But the Indian-based firm, Rail India Technical and Economic Services Ltd (Rites), seems more likely to have taken advantage of the TRC's vulnerable situation, dubiously winning the tender to acquire a majority share in what is now known as Tanzania Railways Ltd (TRL) and then hiring itself to supply used locomotives and passenger cars at costs higher than the price of brand new equipment.
Now nearly three years later, the deal has gone sour and Rites has issued a 60-day ultimatum to the government stipulating that if the government does not pay the $30.2million for hiring the locomotives and wagons, the Indian firm will walk.
But as the two sides continue to fight over the billions, fresh details show that the contract signed was clearly in Rites' favour, as the Indian firm managed to lease 23 used passenger coaches for a price that could have bought 20 brand new wagons.
In the leasing agreement for the 23 coaches, seen by The Guardian on Sunday, TRL should pay $5,765,300 over five years, including lease charges of $3,255 per coach per month for five years and maintenance and spare charges of $450,000 per year.
According to a senior engineer currently working with TRL, a new passenger coach bought outright could cost about $250,000 depending on the type and country of origin. Most of the passenger coaches currently used by the Tanzanian railway were made in England and Sweden.
4th October 2009
The amount of money the Indian firm is charging to lease used locomotives and wagons over five years could buy ten brand new locomotives and 48 new passenger coaches.
It swept into the country under the guise of a serious investor ready to pour billions of shillings into saving the former Tanzania Railways Corporation (TRC)which in 2006 was at the brink of collapse, thanks to the poor management of the State-owned firms that clouded the post-socialism era of the 1990s.
But the Indian-based firm, Rail India Technical and Economic Services Ltd (Rites), seems more likely to have taken advantage of the TRC's vulnerable situation, dubiously winning the tender to acquire a majority share in what is now known as Tanzania Railways Ltd (TRL) and then hiring itself to supply used locomotives and passenger cars at costs higher than the price of brand new equipment.
Now nearly three years later, the deal has gone sour and Rites has issued a 60-day ultimatum to the government stipulating that if the government does not pay the $30.2million for hiring the locomotives and wagons, the Indian firm will walk.
But as the two sides continue to fight over the billions, fresh details show that the contract signed was clearly in Rites' favour, as the Indian firm managed to lease 23 used passenger coaches for a price that could have bought 20 brand new wagons.
In the leasing agreement for the 23 coaches, seen by The Guardian on Sunday, TRL should pay $5,765,300 over five years, including lease charges of $3,255 per coach per month for five years and maintenance and spare charges of $450,000 per year.
According to a senior engineer currently working with TRL, a new passenger coach bought outright could cost about $250,000 depending on the type and country of origin. Most of the passenger coaches currently used by the Tanzanian railway were made in England and Sweden.
