Dar es Salaam — Ministers from partner countries said on Sunday that they will sign a bilateral agreement before the end of the year to allow a review of the Tanzania-Zambia Railway Authority (Tazara) Act.
In a communiqué issued after their ordinary meeting, ministers for transport, finance and industry said the pact between the two countries would pave the way for the amendment, which will also lead to restructuring of the struggling railway line.
The revision of the law is expected to attract more private players as the two countries are taking other measures to revive the corporation.
"We noted that the performance of the authority remained below breakeven point and therefore requiring immediate action to improve the situation," stated the ministers in the communiqué e-mailed to the media.
Other measures include a resolve to finance re-capitalisation after the board completes a bankable business plan by March 2020.
In order to foster business for Tazara, the two countries are planning to pass preferential policies so that at least 30 per cent of bulky cargo is transported by rail.
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After the amendment, which is expected next year, the two governments will remain the owners of the infrastructure and the private sector is expected to take charge of the services of the landmark 1,860-kilometre single-track railway line that was built in the early 1970s by China as a cold-war era gift to Tanzania and Zambia.
Tazara recently signed a contract to transport 17,000 tonnes of maize from Tanzania to Zimbabwe for the Grain Marketing Board, with a possibility for another 83,000 tonnes order should the initial offering be successfully executed.
Recently, President John Magufuli expressed his disappointment with the performance of Tazara saying it must be revived to operate profitably.
According to him, the performance deteriorated from carrying 601,229 tonnes in 2005/06 to 128,105 tonnes in 2015/16.
For Tazara to operate profitably, it will have to carry at least 600,000 tonnes per year.