COMESA-EAC-SADC Tripartite IGAD Infrastructure Investment Conference

1. COMESA-EAC-SADC Tripartite & IGAD Infrastructure Investment Conference

2. Outline COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 2 Background Current Status Project Rationale Project Objectives Markets Financing Required Expected Results

3. Background COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 3 Railway line infrastructure stretches from the port of Dar-es-Salaam in Tanzania to New Kapiri Mposhi in Zambia Construction of the 1,860.5 km line was completed in 1975 Infrastructure & equipment designed to haul up to 5 mtpa of freight Has capacity to handle increased tonnage with the provision of additional equipment & more frequent passing loops TAZARA has 24 (GE 30C) locomotives of which only 10 are operational TAZARA has 2,300 wagons of these 700 are drop sided wagons capable of carrying both heavy bulk goods such as copper cathodes (50t to 60t) or containers (2 teus)

4. Current Status COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 4 Critical operational & capacity constraint on system is the poor availability of mainline locomotives. Lack of funds to purchase & maintain a critical stock of replacement & service parts key workshop & track maintenance equipment breakdown Poor availability of locomotives hence low utilization of wagons �on average loaded only a month on average Poor track on curvature due to insufficient ballast rail side wear & skidded rails, uneven rail in black cotton areas & rail creepage Decayed wooden bridges, collapsed culverts Insufficient and inexperienced manpower.

5. Project Rationale COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 5 Increasing trade volumes (imports & exports) in the Tripartite region Increasing tonnages being hauled by road Potential to reduce road ware & maintenance costs Infrastructure operated at well below capacity Potential to reduce haulage costs & make goods more competitive Linkages with other corridors in the Tripartite region Reduction of transit times Need to respond to increased market for �containerised� freight.

6. Project Objectives COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 6 Develop TAZARA to its full potential Become the preferred carrier of bulk goods Take advantage of the increasing freight volumes generated by the international commodity boom Purchase additional locomotives Overhaul locomotives & increase fleet of operational locomotives Address deferred maintenance of equipment, workshops, track tamping machines & rescue cranes Re-stock spares to prevent down-time of equipment Carry out track essential infrastructure rehabilitation Optimise investment in the transport sector.

7. Markets COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 7

8. Financing Required COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 8 Funding requirement: US$ 30 million Tenor: 10 years period Disbursement: over duration of expansion program -2 years Repayment: in equal installments

9. Expected Results COMESA-EADC-SADC & IGAD Infrastructure Investment Conference 9 Freight hauled to increase from 500,000 tpa of freight 1,500,000 tpa Annual turnover will increase from US$43.3 million to US$77.9 million Outsourcing of workshop facilities & maintenance of equipment Migration to containerised freight Development of a container handling facility at Kapiri Mposhi Reduction in loading times & transit times Reduction in user tariff.