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- Feb 11, 2007
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Train services from Dar-es-Salaam to Kigoma resumed in June, although limited to only one serice per week. Photo Jackson Odoyo
The problems facing Tanzania Railways Ltd (TRL) have not been resolved (they have been described in several issues of TA) but a number of new developments have been reported during recent months.
In May it was revealed that the India-based firm RITES was demanding $86 million (about Shs 125billion) as the cost of ending the 25-year deal it had signed with Tanzania three years earlier. However, the Guardian on Sunday claimed that the company hadnt invested any money in the railways during all this time. The paper alleged that RITES had expected to use the TRLs shares and assets it acquired in order to borrow $400 million from the International Finance Corporation/World Bank. As the quality of service on the main lines declined, the paper said, the government eventually agreed to buy back the 51% of shares RITES owns. Then, alarmed by the financial report presented by RITES, the governments negotiation team was said to have asked for an independent auditor to verify the books of accounts, before any compensation deal could be reached. RITES apparently did not agree to this.
On June 8 the Daily News reported that the government had formed an interim management team to run Tanzania Railways Limited (TRL) while the government looked for a reliable and serious investor. RITES management had agreed to hand over the assets and operations of TRL as a decision to this end had been made by shareholders on both sides of the partnership.
Tanzanian Affairs » TANZANIA RAILWAYS
The problems facing Tanzania Railways Ltd (TRL) have not been resolved (they have been described in several issues of TA) but a number of new developments have been reported during recent months.
In May it was revealed that the India-based firm RITES was demanding $86 million (about Shs 125billion) as the cost of ending the 25-year deal it had signed with Tanzania three years earlier. However, the Guardian on Sunday claimed that the company hadnt invested any money in the railways during all this time. The paper alleged that RITES had expected to use the TRLs shares and assets it acquired in order to borrow $400 million from the International Finance Corporation/World Bank. As the quality of service on the main lines declined, the paper said, the government eventually agreed to buy back the 51% of shares RITES owns. Then, alarmed by the financial report presented by RITES, the governments negotiation team was said to have asked for an independent auditor to verify the books of accounts, before any compensation deal could be reached. RITES apparently did not agree to this.
On June 8 the Daily News reported that the government had formed an interim management team to run Tanzania Railways Limited (TRL) while the government looked for a reliable and serious investor. RITES management had agreed to hand over the assets and operations of TRL as a decision to this end had been made by shareholders on both sides of the partnership.
Tanzanian Affairs » TANZANIA RAILWAYS