
| Cabinet approves TRL repossession | Send to a friend |
| Saturday, 13 March 2010 10:56 |
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The Cabinet yesterday granted permission to the government to take over the troubled Tanzania Railways Limited (TRL) from Rites of India. President Jakaya Kikwete chaired the Cabinet meeting at the State House in Dar es Salaam that approved the buyback option to end the government’s three-year stormy relations with the concessionaire who had won a 25-year contract. A statement dispatched by the State House directorate of communications, announced the move, saying talks with Rites would begin immediately to lay down the terms of disengagement. The joint venture with Rites has failed to make any mark in efforts to improve rail services, with the foreign management spinning from crisis to another. Rites will now seek to sell its 51 per cent stake in TRL that it purchased in 2007. The government held the balance. According to the statement signed by Chief Secretary Philemon Luhanjo, the government would soon embark on new strategies to revamp the cash-strapped company and prepare it for second privatisation to another strategic partner. The Cabinet resolution was not unexpected as it had become apparent that the Rites journey had stuck in a quagmire to make any serious business from the railways collapsed 648km infrastructure and incessant workers’ strikes. The struggling venture failed to attract billions of dollars in loans from the World Bank and IMF, to fund its operations as expected. Rites had indicated that it will invest $283 million in the venture but it failed to qualify even for a start up capital of $40 million from International Finance Corporation. The government’s withdrawal came in the heels of a major East Africa Community conference on railways that ended in Dar es Salaam yesterday. The conference that was opened by President Kikwete on Thursday, explored problems bedeviling private concessioning of rail systems in the region and the best way to hasten regional networking to facilitate the movement of people and goods. |


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