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Tuesday, 8 January, 2002, 20:03 GMT
Tanzania to privatise railways
Dar Es Salaam, Tanzania
Rail is crucial for moving exports to Dar Es Salaam port
Tanzania is looking for a private company to run its railways.

The government has placed adverts in international newspapers this week inviting the private sector to lease the railway infrastructure and run freight and passenger services for a period of 25 years.

The railway is a crucial form of transport for Tanzania and its land-locked neighbours - Burundi, Rwanda, Uganda and the Democratic Republic of the Congo - who trade with the world through the port in Dar es Salaam, Tanzania's former capital.

The country's rail network covers nearly 3,000 kilometres of tracks.

Far reaching interest

The transfer of the railway from state to private hands is being managed by the Parastatal Sector Reform Commission.

The Commission's co-ordinator, Heavenlight Kavishe, told the BBC's World Business Report that the small number of privatisations in Africa and the lack of big players in the market make it difficult to predict who will bid for the concession.

"We've had interest from South Africa, from as far as New Zealand, from Canada, and I think one European company," he added.

One operator, one regulator

Mr Kavishe said the government is asking for private participation in both the maintenance of the track and ownership and operation of the rolling stock.

Tanzania did look at the way railways had been privatised in Britain whilst formulating their strategy, according to Mr Kavishe, but allowing more than one company to compete on the same track has been ruled out.

"Through the bidding process we expect to get one concessionaire, that will be the operator," he said.

"Apart from that we have a separate regulatory authority which will just set the standards for safety, service, and quality," he added.

Investment priority

But Mr Kavishe said that the new railway operator will not have an absolute monopoly as certain sections of the railway face fierce competition with road travel.

"The operator of the railway has to justify the prices or the tariffs which he wants to charge both on freight and on passengers looking at his costs and also comparing with competition," he said.

Mr Kavishe did not therefore think the regulator would force prices onto the operator.

"The main issue here is not the money," he said.

"The issue is to guarantee investment or to ensure that investments are flowing for the existing network and whatever will be realized from the lease... will be used to expand the services to other places."

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 ON THIS STORY
Heavenlight Kavishe, Commission co-ordinator
"We are asking investors to compete for the market not compete inside the market"
See also:

04 Sep 00 | Africa
Tanzania delays free trade move
08 Aug 01 | Country profiles
Country profile: Tanzania
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