Document of The World Bank FILE COPY

FOR OFFICIAL USE ONLY

CONFIDENTIAL Public Disclosure Authorized Report No 4042-TA

TANZANIA Public Disclosure Authorized

TRANSPORT SECTOR MEMORANDUM

Public Disclosure Authorized VOLUME III

January 4, 1985 Public Disclosure Authorized

Eastern Africa Projects Department

This document has a restricted distribution and may be used by recipients only In the performance of their offleial duties Its contents may not otherwise be disclosed without World Bank authorization

FOR OFFICIAL USE ONLY CONFIDENTIAL

TANZANIA

TRANSPORT SECTOR MEMORANDUM

VOLUME III1/

1. Investments in the Transport Sector

1.1 The poor performance of the Tanzaniantransport sector and its deteriorating services could be, to a large extent, explained by declining investments in the sector. In the Second Five Year Plan (1971/72-1975/76) about 20% of total investments for the economy were allocated to the sector. During the Third Five Year Plan (1976/77-1980/81) the share of transport investment was sharply reduced to 10%; in the Fourth Five Year Plan (1981/82-1985/86) which is now being prepared, preliminary information indicates that investments-to be allocated to the sector will be about 13% of all investment planned for the economy. The share of investments for the transport sector is low in relative as well as in absolute terms. It is also low in comparison with other countries in the region with similar level of development of transport infrastructure, where a share of up to 30% is not uncommon. Although the Fourth Five Year Plan is expected to curtail major new capital investments and will serve more as a stabilization program, that does not provide sufficient explana- tion for the relatively low share of transport investments.

1.2 The Third Five Year Plan terminated on June 30, 1981. Official results and analysis of the Plan execution per sector are not yet avail- able. However, on the basis of information acquired in different minis- tries and agencies involved in the sector, fairly sufficient data can be put together, permitting a preliminary analysis of the actual investments in the transport sector. During the Plan period 1976/77-1980/81, the total amount planned for the sector was about TSh 3,612 million, of which TSh 2,985 million was planned from Government and foreign resources, while TSh 627 million was envisaged to be directly invested by parastatals in the transport sector (including Bank credits). The total investments materialized in the sector are estimated at about TSh 3,808 millicnor 5% above the planned one. A summarized comparison between planned financial targets and those achieved are presented below:

1/ TSM Volume III was prepared by D. Jovanovic, Sr. Economist and M. Konishi, Y.P. following their mission to Tanzania in November/December 1981; M. Dick, Sr. Economist prepared sections 3(b) and 4.

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -2-

Transport Investment

Planned Materialized (in TSh Million) (Preliminary)

1. Road Transport Industry 235 (6%) 150 (4%) 2. Roads 1,440 (40%) 1,607 (42%) 3. Ports 619 (7%) 396 (11%) 4. Railways (TRC) 582 (16%) 1,036 (27%) 5. Air Transport 736 (21%) 619 (16%)

Total 3,612 (100%) 3,808 (100%)

1.3 The total actual investments in the sector -- TSh 3,808 million (US$464 million) were mainly financed from foreign resources (79%) and only 21% by local funds. Although the plan for the sector has reached total financial targets, financing of different subsectors was not according to expectations. More important physical targets have not been achieved in most of the subsectors; that is particularly evident in highways, where a major part of primary road construction (890 km) was not completed. It could be concluded, therefore, that the original projects in the plan had under-estimated costs estimates. The revised cost estimates for road construction are double the original for roads (Table 1.2).

1.4 The investments shortfall, in absolute financial terms, occurred in air transport and ports, while the highway subsector was about even; major increases occurred in TRC investments, mainly due to CIDA and FR of Germany aid. The actual investments and projects materialized in roads, TRC and ports are presented in Tables 1.2, 1.3 and 1.4.

1.5 The preparation of the new Five Year Plan (1981/82-1985/86) is not yet completed. Preliminary figures indicate, however, that about TSh 9.0 billion are planned for the transport sector. Individual programs in subsectors for ports, highways and TRC (the development program for air transport is not yet available) are presented in Tables 1.3, 1.5 and 2.2; they have not yet been approved by MPEA, and should be considered as indicative.

2. Highway Subsector

(a) Road Network Maintenance and Development

2.1 Road network has been expanding rapidly, reaching 49,800 km in 1981 from 36,600 km in 1976 (Table 2.1). That has been largely due to an increase of rural roads, while the total length of primary-trunk roads remained unchanged in six years. At the end of 1981, only 2,454 km were in bituminous-paved standard, or only about 15% of the total primary and secondary network (16,700 km). 1 2.2 Actual implementation of the Third Five Year Development Plan (1976/77-1980/81) was not satisfactory; most of the-road construction included in the Plan was not completed on schedule. Only 209 km of primary -3- roads were constructed to bituminous paved standard, leaving another 890 km of roads still under construction; they are expected to be completed during the new plan (1981/82-1985/86). The actual mileage of rural roads constructed in the five year period is not available; however, the total rural road network was estimated to be increased by about 12,000 km in the period, of which IDA-financed highway projects contributed with 1,060 km (Table 2.9).

2.3 The new five-year road network Development Program (as proposed by MOW)2/ incorporates from the previous plan the completion of about 890 km of roads at bituminous paved standard; in addition, three new roads (514 km in total) are included together with 200-300 km of strengthening/ rehabilitation of Tanzam Highway (to be financed by IDA). Five bridges, with total length of 1,120 m are also included in the program -- two of them are taken over from the previous plan. Finally, about 800 km of primary roads have been proposed for studies for appropriate improvements. Overall, the proposed new program of the MOW is generally modest in physical terms -- based on completing the roads started under the previous plan; only three new road constructions are proposed, of which two roads seem to lack justification for having high priority at this stage of economic austerity in the country: Mikumi-Ifakara (121 km) and Marangu- Tarakia (63 km) roads (Table 2.2)3/.

2.4 Planning of the highway network development is the responsibility of the Planning Division (PD) of the MOW. PD has basically four main activities and consequently is divided into the following sections: highway and aerodome planning, building planning, mechanical-workshop planning, and economic anlaysis/statistics. At present there are four professional (local) staff -- three economists and one engineer, and two technicians. In regard to highway planning, PD needsimprovement -- in particular to demonstrate that the road network development program comes as a result of a comprehensive country-wide analysis of traffic flow, macro-economic priorities and inter-sectoral dependence. Some technical assistantce was provided to PD by SIDA and ODA; that ended in 1980. PD still lacks an experienced transport engineer-planner, and that will be provided under the Fifth Highway Project. In regard to highway planning, one of the major new assignments of PD is to take over responsibility for country-wide traffic counts from MOCT.

2.5 MOW's performance in road maintenance has been unsatisfactory. Only about 2,400 km of primary roads are included annually, in one way or the other, in maintenance operations (Table 2.3). Roads Division in the MOW lacks staff -- only 16 crews have been created so far throughout the country (Table 2.6). That may be only one-sixth of what would be needed for adequate road maintenance. Consequently, the road network has been deteriorating, causing substantial damage to transport services and

2/ Draft Plan 1981/82-1985/86 is not yet prepared and MOW's proposal may not be fully accepted in the planning document. 3/ The first one is parallel to a railway line and would connect the Tanzam Highway with a sugar industry outfit to Ifakara, and the second would connect MosAi with the Kenyan border, where one road already exists. -4- ultimately to the economy. Some rural roads simply "disappeared", as the attention was not provided on time.

2.6 MOW is aware that funding of road maintenance has not been adequate. The funding has been stagnating in absolute terms for four years at about TSh 123 million. No in-house analysis has been made as to deter- mine which would be the adequate amount. The amount is not only to be determined by the length of the network and different design standards of roads, but by the available crews and their capacities, which are presently quite limited. One part of the road maintenance has been and should remain, at least in the foreseeable future, to be carried out by contract. In that regard, the main problem lies in limited funds available for that purpose.

2.7 Apart from general economic constraints, MOW has its internal shortcomings which, unfortunately, have not been significantly reduced so far -- under the Fourth and Fifth Highway Projects. Besides the general shortage of qualified staff (Table 2.5) there is, a lack of staff motiva- tion, planning of operations and monitoring the actual results achieved. Technical assistance, which has been provided to MOW, has not lived up to expectations, partly due to shortcomings on the part of expatriates and partly because they have not been adequately used and supported by MOW. The two ongoing IDA-financed road maintenance projects provide together over 1,000 man-months of technical assistance. The lessons learned so far call for the necessity to engage technical assistance personnel more directly in actual operations -- in the field work rather than at desk work in MOW headquarters in Dar es Salaam.

Rural Roads

2.8 Maintenance and construction.of rural roads are coordinated by the Commissioner for Planning and Control in Regional Administration Office stationed in Dodoma. Regional Administration in Dodoma reports directly to the PM's office. The decision-making process is, however, carried on in 20 regions by the Regional Commissioner and the Regional Development Directors -- responsible for rural roads. Each region has its own Department of Works, headed by regional engineersi/. The organization branches further to districts (87 in total), where District Development Director and District Engineer are ultimately reponsible for the rural roads construction and maintenance in their respective districts. So far, there is neither Government strategy for rural road development nor a comprehensive study of the problem. Officials of regional administration and of MOW believe, however, that such a study is necessary. The Bank Group should encourage such a study.

2.9 In 1981 there were 17,600 km of regional roads and 15,500 km of district roads. The funding of rural roads is completely separate from that of roads under MOW jurisdiction. The authorities of the regions submit their budgetary requests to the Treasury through the PM's office. Available figures indicate that Government funding of rural roads maintenance/construction has been stagnating in absolute terms in the last couple of years, at about TSh 70 million (Table 2.8). Lack of comprehensive

4/ That should not be confused with regional engineer appointed and directly responsible to the Roads Division, MOW. -5- analysis of maintenance needs and methods, construction costs, staffing and equipment available prevent assessment of the adequacy of the amount. It is known, however, that there is an acute shortage of equipment and of experienced staff. MOW is to provide some technical support to regional and district staff; in practice, that is rarely done.

(b) Road Traffic and Vehicle Fleet

2.10 Main road traffic flows basically originate to and from Dar es Salaam. Principal traffic directions are: (i) toward the west and northwest, Dodoma-Mwanza-Musoma; (ii) toward the southwest and Zambia -- Tanzam Highway; (iii) to the north, Moshi-Arusha and (iv) to the south, Lindi-Mtwara (see Map). Country-wide traffic counts have not been carried out on a systematic and regular basis; the'last counts originate from 1978. Thereafter, only sporadic counts, on roads considered for improvement, were done. Traffic values are generally light -- rarelyexceeding 300 vehicles per day./. That could partly be explained by the prevailing economic situation in the country and partly by low engineering standards of the network due to inadequate road' maintenance.

2.11 Responsibility for traffic counts has not been clearly assigned for a long time; both MOCT and MOW claimed their authority over it. Finally, it was recently decided that traffic count should be assigned to PD in MOW; that decision makes sense. Although the institutional problem was resolved, there are still problems in regard to logistics needed in PD to carry out this task. Due to the importance of the problem, the Bank Group should consider favorably appropriate assistance to PD to be included in the forthcoming Sixth Highway Project.

2.12 Reliable data on vehiclefleet development in total and per region are not- available. The reason for the current situation is an absence of a reliable country-wide arrangement; many agencies are involved in one way or another, but no one has encompassed the full responsibility (National Insurance Corporation, Transport Leasing Authority, Revenue Service in the Treasury, etc). That issue, however, requires an urgent solution, particularly in regard to the problems of the trucking industry. The last estimate carried out by consultants (Table 2.10) put the total fleet at 100,000 motor vehicles in 1980. In comparison with 1972 data, there was virtually no growth (only 0.3% per annum). It is estimated that every year a sizeable number of motor vehicles ends its life partly due to shortened vehicle life because of the poor state of the road network; that is, however, compensated by relatively large new vehicle registra- tions. The composition of the fleet in 1980 shows that passenger cars were predominant with 25% of the total, followed by trucks and tankers with 20%, van 12%, pickups 11%, etc. It is es'timated that privately- owned vehicles exceed 75% of the total fees. Regional distribution of vehicles is significantly uneven; in ten out of twenty regions in the country, there were fewer than 1,500 vehicles in 1980 (Table 2.12).

5/ Some analysis of road transport flows and of traffic volume could be found in a report prepared by an expatriated advisor in PD in 1980 "A Road Transport Plan for Tanzania". -6-

2.13 In spite of the stagnation of motor vehicle fleet new registra- tions (there the details are more reliable) show a rapid increase -- from less than 5,000 vehicles in 1976 to over 12,300 vehicles in 1979; Government- owned vehicles account for about 20% (Table 2.11). The number of recorded road traffic accidents are on the rise (over 1,000 in 1979). In regard to vehicle technical inspection, existing regulations require an inspection once per year; that is done by police, but the regulation is not fully enforced.

(c) Road Transport Industry

Freight Transport

2.14 Road transport, both freight and passenger, is carried out by private and parastatal carriers. Current annual transport demand in Tanzania is estimated at 4,600,000 tons (1980). About 1.9 million tons are carried by both railways combined, leaving 2.7 million tons for road trans- port. Available trucking capacity is low relative to demand -- only about 8,000 trucks are estimated to be in commercial business with about 60,000 tons of total fleet capacity. Reliable statistics on the state of the industry are difficult to find. It could be, however, estimated that about 300 private carriers handle about 65% of all freight transported in the country. Some information is available for five regions where the IDA- financed Trucking Project is being implemented (Table 2.14). It should also be noted that private carriers provide road transport service to neighboring Zambia and Zaire.

2.15 Entry into the industry is relatively easy. However, the state of the industry is getting more and more difficult due to chronic lack of spares and tires and very limited opportunities for fleet renewal. The Transport Licenses Authority, a parastatal company under MOCT, is in charge of provid- ing official licenses to truckers for specific routes. The license fees, issued for two year periods,range from TSh 500 for trucks of less than five tons, to TSh 5,500 for trucks over 30 tons. Vehicle registration is the responsibility of the Revenue Office of the Ministry of Finance, while the vehicle insurance is the monopoly of the National Insurance Corporation. Technically, inspection of vehicles is to be done by traffic police once per year, but that is not done systematically for all vehicles.

2.16 Due to unfavorable conditions on the market, a number of private carriers went out of business. Most of them, however, operate with profit but are unable to make appropriate use of their earned funds -- to buy imported vehicles, tires and spares. For spares and tires they have to go to franchise and bazaar dealers who are twice a year assigned limited quotas by SMC (Table 2.16). To obtain needed tires and spares, private carriers have to overpay them several fold. The situation with purchase of new vehicles is even more difficult, since they are assigned by SMC to regional authorities (20 altogether), who have thereafter full authority to allocate them at their discretion -- mostly to parastatal companies. It should also be mentioned that a Government-owned financial institution, KARATHA (subsidi- ary of NBC), extends loans to private carriers. -7-

2.17. Road transport services have been reduced due to shortages of fuel. Major problems in fuel supply were experienced in 1981 in the northern regions of the country. The problem came basically from irregu- lar import of petroleum and from shortages of fuel tankers and fuel wagons on the railway. The shortage of fuel has very negatively affected some industrial production in the region (due to the shortage of black fuel).

2.18 There are no tariffs for inter-regional transport; they are, however, now being considered by MOCT, the Ministry of Trade, and the National Price Commission, since the Government is of the belief that an absence of control over transport costs has been creating disruptions and imbalances in the country's pricing system in general. Regional authorities prescribe maximum tariffs for general cargo (ranging from TSh 1.75-2.50 per ton/km, Table 2.1). The tariffs have not yet been established in all the regions. The absence of a country-wide tariff system is probably not as critical as the Government seems to believe. If a country-wide system is established, it should be treated flexibly -- as guidance (on maximum rate) rather than compulsory rate; besides, it is always difficult to enforce those regulations.

Passenger Transport

2.19 The problem of inadequate passenger transport in the country is given high priority by the Government. Currently, a Danish firm (COWI- Consult) is carrying out the study on that subject. Since the Bank is involved with the study, we will have the opportunity to make our comments on time. There are about 1,500 buses engaged in commercial passenger trans- port. The rates set in July 1980 -- 17 cts. for passenger/miles for both paved and unpaved roads is considered low, and NTC has requested from MOCT an increase to 25 cts. and 30 cts. respectively. Public transporters have to obtain an appropriate two-year license from TLA which range from TSh 500 for less than 15 passenger capacity to TSh 2,020 for a bus of over 65 passenger capacity.

2.20 Urban transport in Dar es Salaam and Dodoma is mainly carried out by a parastatal company, UDA, a subsidiary of NTC. Created in 1974, it has been steadily increasing the number of passengers transported in spite of the decline of its busing fleet to 224 buses at the end of 1980 (Table 2.19). At the beginning, the company operations were profitable; however, more recently UDA encountered losses which could be explained by substantial operational cost increases (over 100% in the last three years) on the one hand, and unchanged rates from 1974 on the other.

Current Rates per Passenger/km (in TSh)

0 - 4.9 km 0.50

5.0 - 14.9 km 1.00

15.0 km & up 1.50 -8-

Urban transport is also provided by numerous private' taxis which are organized into cooperatives, estimated at several thousand. Taxis operate mostly in the Dar es Salaam area, although their service can be extended to main urban centers in the country.

2.21 Inter-regional passenger transport is in worse shape; it is handled by KAMATA, also a subsidiary of NTC, and by numerous private carriers. While the information on the private carriers is very scarce, records of KAMATA operations are not encouraging -- like those of UDA, the fleet is in constant decline (Table 2.18) and it is also now operating with losses. At the end of 1980, its fleet of only 66 buses had a seating capacity of 4,300. KAMATA provides weekly services to major cities in the country, and its routes vary from 106 to 1,460 km. However, due to the shortages of tires and tubes and delayed deliveries of new buses, its operations at the end of 1981 were drastically reduced and most of the routes temporarily sus- pended (Dar es Salaam-Morogaro, Dar es Salaam-Arusha, Lindi-Matwara, Mwanga- Kigoma, etc.). It should also be mentioned that three RETCOs (Dodoma, Rwuma and Mtwara) operate limited bus services within their respective regions with a small busing fleet -- 22 in total. Overall, it could be estimated that private carriers provide about two-thirds of all inter-urban passenger transport.

National Institute of Transport

2.22 NIT was established in the mid-seventies. Underthe IDA-financed Trucking Projects the courses at NIT began in 1979 and have been carried out by four instructors. In December 1980 the number was reduced to three: instructor for trucking manager, accounting, and supplies managers. On average, there are four courses per year with about 20 participants per course. The participants in the courses are staff from the Government and parastatal companies involved in one way or another with transportation. In the future, participants from the private sector should also be encouraged to attend the courses.

Freight Bureau

2.23 The Tanzania Central Freight Bureau (FB) is planned to start operations in July 1982. That agency has long been needed for organizing inflow and outflow of port traffic. FB will control export/import cargo; it will also hire ships and ensure that freight rates for Tanzanian cargo are reasonable. The Government also expects FB to ascertain that foreign shipping lines allowed to handle the country's cargo pay FB a commission, out of which the country will be able to collect necessary funds to estab- lish its own merchant fleet in the future. This, however, may take a while.

(d) Road User Charges

2.24 Government revenues from road user charges have been steadily increasing. It could be estimated that in 1980/81, about TSh 470 million were collected from road users. The most important are import duties on motor vehicles and taxes on fuel. The existing customs duties appear reasonable, as do the sales taxes (Table 2.21). The duties are generally 20% ad valorem, while the sales tax is 25%; the exceptions are passenger cars with stronger engines. The taxes on gasoline range between 16-21% of its retail price which could be assessed as low compared to other countries (more about gasoline imports, consumption and prices is presented 9.

in Chapter 7).

2.25 A motor vehicle road license fee (sort of an annual registration fee) is paid annually by all vehicles except those owned by the Government. The fee is relatively high and ranges from TSh 350 for passenger cars to TSh 2,500 for trailers. Other taxes (license for commercial vehicles, technical inspection, etc.) are small and consequently of minor physical importance for the Treasury. Overall, there are no major issues in road user charges. However, as discussed earlier in the report, issue is the imbalance between Government spending for roads and the revenues collected from road users; annually, about TSh 200 million (US$ 24.4 million) more is collected than spent for roads. Table 1.1

TANZANIA TRANSPORT SECTOR MEMORANDUM CAPITAL INVESTMENTS IN TRANSPORT SECTOR (in TSH Million)

1976/77 1977A78 1978/79 1979/80 1980/81 Total (76/77-80/81)

Roads 180.06 141.67 174.49 614.11 496.80 1.607.13

Local funds 49.33 39.87 23.35 129.26 68.80 310.61

Foreign funds 130.73 101.80 151.14 484.85 428.00 1,296.52

Ports n.a. n.a. n.a. n.a. n.a. 395.51

Local funds n.a. n.a. n.a. n.a. n.a. 52.39

Foreign funds n.a. n.a. n.a. n.a. n.a. 343.12

Air Transport n.a. n.a. n.a. n.a. n.a. 618.58

Local funds n.a. n.a. n.a. n.a. n.a. 234.84

Foreign funds n.a:. n.a. n.a. n.a. n.a. 383.74

Railways (TRC) _ 67.64 607.19 213.38 148.08 1,036.29

Local funds - 39.04 57.94 26.85 39.47 158.30

Foreign funds - 33.60 549.25 186.53 108.61 877.99

Total Investments in the Sector 3,657.51

1/ In addition, about TSh 150 million was invested in the Road Transport industry. (US$446 million)

Source: Ministry of Planning and Economic Affairs, Ministry of Communications and Transport, Dar es Salaam, December 1981. TANZANIA - TRANSPOUwr SWrOY MMORlDM Table 1.2

T.1W1 FIVE tL1 DIV. PT.AH -1 .,1rL.n - 19r.n*ITZ i PROJECT PINANCflIG I2 TIIOUSAND O' SffS 1hUNfIS'JYIY OF `1UIgK: _PLAIEDI J VES7T4EHTS

P L AN Y EA R 3rd 1'IVE -

REVI1SED TOTAL DF18 r R 0 J B 0 T N A N E TOTAL COST 197A7 1977/73 197/7.9 1979/00 19|0/81 ATA |3

Major Bride 157,000 3,550 3,000 8,350 20,450 27t000 63,390 Under implumontation Port Aocoao RoQ: 138,000 16,900 10,000 45,000 32,000 2610O 130,000 Under Conatruotion

Pugu lIoad 107,118 47,118 5,000 - _ _ 52,118 Comploted

GoitaAiara Peedor Roada 42,300 6,650 7,800 . _ _ 14,450 Completed for L!ra not. _ _ -______Cea i t a Mtwar Alingoyo-fLsani Road 136,000 35,000 25,700 - . GO,7O0 Complotod

Ihleba WiaLon Forry noad 8a000 1000 29000 1,673 - - 4,673 Under Comstructionz

Trunk Road ?lcintonanoo 222,5000 32,000 22,0Co 20,000 20,000 20,000 14,.000o Under inplenentation

Improv-mont of Dacoatic Airport 155,000 9,516 14,455 23,000 22,000 l?,404 00,455 Undor Conatruction

ilimn@Caro Intor. Airport 15,G00 8600 -2,000 5,000 _ - 15,600 Under Conatruction

Dar so Salcom Intor. Airport 110,000 1,000 .6,000 9?000 16tOOO 201000 52,000 Ur.der Implementation

Bukoba - Lupenbo Tea Roadd 14,700 2,600 -. 2,000 _ _ - 4,600 Completed

Rungwo - LuEhoto Tra Roado 49,570 12,400 11,900 -. 24,300 Completod

Kirumi - fuvuvu Brid,eo 35,000 15,900 13,000 _ _ 20,900 _ vuu brd co plted

1ako Victoria Circuit (Design) 12,500 950 11275 - _ _ 2,225 Completed

Nello - Tear Equipmont 14,5C2 6,000 - . . 6,000 e

p~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~... -/-2 .. 2 ~~~~~~~~Table 1. 2

NZiNtombe, - MakIuyuni 8Th4iolbob r r0-T ST TU

P ROJ EC T 1NA LI 1TOTAT. C0ST 19707 1077/78791 979 '--- 7 i JTOTT S TA TU

- 000 10,000 21 00 ITc.t.C.-tod)40 6. IIniig~~mbc~Ikd - IF~kuyuu1.21,'300 1,500 J I 7 l)ui;,~xaa - Icuuci~ IoQ ,d -1. .,000 - j ______

7~ TIUCOMaROadM.-iz -0 11,500) 35,000 35,000 35,000 1 1 6 roo 1" (:Cnotructicn ~~~~~~~~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ )~~~~.3000 54,120 9 G,370 I co 4 90 ri Cwruto

3. Dodoma Morogoro Road, 465,000 20,000 30,0 000 00f 140,000 Uder Countructlon 0 0. MIJn,na - 1a1oyuni Road (Dcaiivi) 9,000 - lp 0 4,500 5,500 JN it_Completed

1. yarangu. -U1k!2? Bond 46;.00 - 3,000 14,000 12,000 29,000 Dcoioiing CoropletOd

'2. lBriddaas Dox as Salaam 30,000 - ?:000 2,000 4,000 8,000 Undor .Izmp1rc't-ttion - -~~~~~~~~~~~~ - - ~~~~~~~~~~~~~Salender Drilro 3. Kob ero fl-usumo-.Icaka Rload 431,000 171000 .31,000 41,000 46,0000 135,000 UnrrConot-'iction

4. Southern Ca,phow7 FA' Rdo 12,000 -- 1,000 1,000 t,000 4, OuU hot Irmplemenicd

~5. YKIlouabcr,o r'c'oder RO&dO 8,000 - - 4,000 .4,0000 8,000 Uridor lmplem~ntat..on

!6. SolnCer - Uibcibabay Rioad 130,000 - 7,0OK0 10,000 13,000 30,000 Nlot Implem:entod

!7. StiolacrIa - iTyomm~go Rd (Dooiign) 2,500 -- 1,250 1,250 2,500 Nlot Inp1ce=cnLcd

?8. Atuvhbn -Joke VatDron HiD (DoiignZ 3,000 --- 12000 1,000 2,000 Not ImplczicAtud

?9* NyocxagQ Linc2I. Road p205,000 4 1l,000 41,000 Ur.dur Impler-ntation

50. Dar An Sa1ola= TunducA Rd 42,697 42,697 - 2,1097 Undur Conotruotion

$1. Ho=ine,1,3764:zaxai 1,376 -_* -1,376 Complv.t%.d

52. Zonta Workohopo 15,000 - 3t000 6,0006 6,0000-1,0 ni p.*tto _ _3 Table 1.2

NO. PRnOJBOT N A UE TOTAL COT y 1 - 3rd i VEI-;" 19(*/77 1977/70 1970/79 1979/00 1900/01 YFMS PI STATUS .______-______.__ _ _._._.______TOTAL

33. Airport Fire Services 10,000 3t000 2,700 - 2,000 2,000 9,700 Unj#er Imp1Unofntetic

.- AL FOR AGEIICY 2,295,243 246,257 169,830 322,023 322,820 446,704 1,322,634

34. IJ E D C 0: (a) Offioe Aoccno4ation t,000 _ 4,000 4, . _,000 nTo conattruction is ______.- _ ____...__ t ~ pn,~f CrI (b) IINMCO nIet i-pxneion 3,000 _ 3,000 _ _ _ 3,000 Unider corgtruction - __ .Fcos.t:,acti (o) Z7klaIl OfficC., - 21trIdncd 8 2,000 2,000 2,000 2,000 8,0'? h o z *aii I

(d) Pwrchr,30 of Vch:el.,s | 2,300 550 220 150 220 '5° 1,290 _uwcho_ vohl_clo ~~~~~~~~~~~~_ E-_..__.______. , (o) Of rica 3,060 920 740 500 5j00oo 3jo; Purchased ()£u 1 ±/nt': ______. 74 1111_. K ___ __-_v .~ TolTAL FOR AMi-NCY 24,410 1-,470 9,960 6,650 2t720 2,550 23,3;0

~~~~__ _ *t __- _ - *35. E C C 0: . 0 . 2 (a) Comrnny Dov Ouor-ment 2 0 7 24,0ooo Und_r ImpIentat±on

(b) mIanaemont and. Poroonnol 26,950 - 1,500 750 -075 075 4,000 Under Impl-o-tation Dovalopment

T 0 T AL F O R A G E N C Y 50,950 6,000 5,500 7,750 7,075 075 20,000

T 0 T A L V 0 T E 3,346,193 252,157 175,330 244,773 330,G95 447,579 1,450,G34 0 T H E R S 24,410 1,470 9,960 6,G50 2,720 2,550 23,350

T O T A L V O TE 3,370,603 253,727 185,290 251t423 333t415 450,129 1,473,984

; - .- : _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 14.

Table 1.3

TANZANIA

Transport Sector Memorandum

Tanzania Railway Corporation (In T Sh Million)

B. Investment Program (1981/82-85/86) A. Actual Investment -- 1977-1980 (Tentative)

Morogoro Diesel Depot Phase II 99.8 Equipment Tabora Diesel Deport 15.0 Locomotive 120 DSU Workshop - Machinery/Equipment 66.8 Wagons 800 Road Services-Vehicles 7.1 Carriages 85 Permanent Way Relaying 109.1 Subtotal 1,005 Coaching Stock 71.6 Goods Stock 126.6 Equipment Repair Facilities Rolling Stock -- ex India 55.5 Morogoro Diesel Maintenance Shop 56 Steamers, Tugs & Lighters on 73.4 Spare Parts 100 Lake Victoria, Tanganyika and Nyasa Others 14 Telecommunications 6.2 Subtotal 170 Station Buildings 6.2 Machinery and Equipment 20.6 Transportation 15 Locomotives and Spares 350.7 Staff Quarters 3.2 Permanent Way Track Rehabilitation 180 Tabora-Kigoma Telecom Study 0.7 Bridges 70 Railway Sector STudy 8.4 Others 60 Railway Technical Assistance 12.8 Subtotal 310 Kigoma Port Design 2.5 Telecommunications & Signals 170 TOTAL 1,036.2 (US$ million) (126.4) Headquarters Improvement 76

Purchasing & Stores 11

Training & Technical Assistance 200

TOTAL 1,977 (US$ million) (241.1)

Source: TRC, Dar es Salaam, Tanzania, December 1981. 15. Table 1.4

TANZANIA

Transport Sector Memorandum

Capital Investments in Ports 1976/77 - 1980/81 (In T Sh)

Project Description Foreign Cost Local Net

Modernization of Lighter Wharf 31,204,000 20,856,000 Phase II, Dar es Salaam

Deep Water Berths 9, 10, & 11 244,250,000 30,239,052 Also additional Works Berths 7 & 8

Modification of Lighter Wharf Tanga 16,200,000 1,300,000

One self-propelled Floating Crane 40,000,000 -

44 Forklift Tru.cks 8,389,500

4 Front Loaders 7,000,000

2 Police Launches 3,000,000 -

TOTAL 343,123,500 52,395,052

GRAND TOTAL 395,518,552

Source:. Tanzania Harbor Authority, Dar es Salaam, December 1981. Table 1.5 16.

TANZANIA

Transport Sector Memorandum

Planned Capital Investments 1981/82 - 1985/86 1/ (In T Sh)

Project Description Foreign Cost Local Net

Deep Water Berths 12 & 13 489,465,000 54,385,000

Improvements to Port Entrance Channel 264,483,000 29,387,000

West Ferry Point 55,368,000 6,152,000

Replacement of Kurssini Oil Jetty 136,899,000 15,211,000

Tug Berth 14,085,000 1,565,000

Grain Terminal 31,600,000 254,400,000

Import Warehouse 109,566,000 12,174,000

Ship Yard 162,000,000 16,000,000

Navigation Aids for Improved 14,436,000 1,604,000 Entrance Channel

Improvement to Port of Tanga 89,87,,000 9,986,000

Improvements of Small Ports 63,971,000 7,107,000 Lindi and Mafia

Development of Kilwa Port 9,900,000 100,000

Modification of Lighter Whart Tanga 32,400,000 3,600,000

Replacement of sheds l. & 2 destroyed 2,778,000 222,000 by fire in Tanga

Shipyard/Copper Depot Access Road 5,164,000 573,800

Shore and Marine Equipment 246,994,160 2,440,500

TOTAL 1,728,983,000 44,690,600

GRAND TOTAL 1,773,673,000

1/ Tentative investment program as proposed by THA.

Source: Tanzani* Harbors Authority, Dar es Salaam, December 1981. TABLE 2.1 TANZANIA

TRANSPORT SECTOR MEMORANDUt

ROAD NETWORK DEVELOPMENT (In km at the End of Each Year)

1. Network by Function 1976 1977 1978 1979 1980 1981

Primary Roads 9,445 9,445 9,445 9,445 9,445 9,445

Secondary Roads 6,045 7,250 7,595 7,295 7,295 7,285

Rural (Feeder Roads)i/ 21,100 24,500 27,900 31,300 35,200 '33,100

TOTAL 36,590 41,195 44,940 48,040 51,940 49,830

II. Primary Road Network by Surface Type

Paved 2,245 2,245 2,245 2,444 2,444 2,4542/

Gravel 4,276 4,276 4,276 4,077 4,077 4,067

Earth 2,924 2,924 2,924 2,924 2,924 2,924

TOTAL 9,445 9,445 9,445 9,445 9,445 9,445

1/ Estimates; they are divided into regional and district roads; in 1981 there were about 17,600 km of regional and about 15,500 km of district roads. 2/ In addition, about 800 km are being constructed to bttuminous paved standard of which about 95 km are new roads.

Source: Regional Administration, PM's Office, Dar Es Salaam, December 1981. Table 2.2

TANZANIA 18. Transport Sector Memorandum Road Network Development Program (As Proposed by Ministry of Works) (in '000 TSh)

Expected Source Total PROJECT TITLE of Funds Estimated Cost (1981/82-1985/86)

Dar es Salaam - Tunduma Road (200-300 km) local 7,000

foreign 279,900

total 286,900

Kibiti - Lindi Road local 484,000 (330 km) foreign 406,000

total 890,000

Mwanza-Musoma-Sirari local 232,900 (220 km) foreign 415,600

total 648,500

Chalinze-Segera-Tanga- Mkumbara Road local 361,600

Chalinze-Segera (172 km) foreign 71,400 Tanga-Mkumbara (170 km) total 433,000

Makambako-Songea Road (315 km) local 151,000

foreign 300,400

total 451,000

Kobero-Ruyumo-Lusahanga- Isaka Road local 146,800 (420 km) foreign 300,400

total 447,200 Table 2.2 19. Expected Source Total PROJECT TITLE of Funds Estimated Cost ___ __ (1981/82-1985/86)

Geita Feeder Roads (250 km) local 12,400

foreign 6,000

total 18,400

6th Highway Project local 9,000 foreign 25,600

total 34,600

Morogoro - Dodoma Road (261 km) local 56,500

foreign 94,000

total 150,500

5th Highway Project local 22,520

foreign 99,100

total 124,620

Salender Bridge (60 m) local 4,000

foreign 18,000

total 22,000

Surveys and Investigations local 44,190

foreign 103,110

total 147,300

Pyrethrum Feeder Road local 16,100

foreign 18,400

total 34,500 Table 2.2 20.

Expected Source Total PROJECT TITLE of Funds Estimated Cost (1981/82-1985/86) Mikumi - Ifakara Road (121 km) local 79,050

foreign 184,450

total- 263,500

Kirumi Bridge (220 m) local 42,000

foreign -

total 42,000

Marangu - Useri Tarakia Road local 80,000 (63 km)

foreign 120,000

total 200,000

Kurasini Bridge (560 m) local 75,000

foreign 175,000

total 250,000

Unity Bridge (220 m) local 27,000

foreign 21,000

total 48,000

Kyaka Bridge (60 m) local 14,000

foreign 6,000

total 20,000

TOTAL 4,511,500

Source: MOW, Dar es Salaam, December 1981. 21. Table 2.3

TANZANIA TRANSPORT SECTOR MEMORANDUM ACTUAL EXECUTION OF ROAD MAINTENANCE (in Km)

PRIMARY ROADS--1/ 1978/79 1979/80 1980/81

1. ROUTINE MAINTENANCE 1,900 1,915 1,915

2. PERIODIC MAINTENANCE (gravel roads) 475 581 422

2/ 3. PERIODIC MAINTENANCE- (paved roads) 33 16 50

4. TOTAL LENGTH OF PERIODIC (253) (300) (362) MAINTENANCE CARRIED OUT BY CONTRACTORS

1/ Primary Roads include about 9,450 km.

2/ Cost of surface dressing is about TSH 1,000,000 by contract and TSH 600,000 by force account (as per MOW information).

Source: MOW, Dar es Salaam, December 1981. Table 2.4 22,

TANZANIA TRANSPORT SECTOR MEMORANDUM ACTUAL EXPENDITURE FOR ROAD MAINTENANCE (in TSH Millions)

YEAR MAINTENANCE MAINTENANCE ADMINISTRATION TOTAL PERIODIC 1/ ROUTINE

1975/76 11.0 8.5 22.8 42.3

1976/77 75.1 13.4 22.6 111.1

1977/78 69.2 24.8 26.3 120.3

1978/79 75.2 23.3 26.1 124.6

1979/80 75.2 23.0 24.8 123.0

1980/81 75.6 24.3 23.4 123.3

1/ There are indications that part of the allocations were actually used for

road improvement works, bringing down total amount annually spent for road

maintenance to bource: MOW, Dar es Salaam, December 1981. Table 2.5 23. TANZANIA TRANSPORT SECTOR MEMORANDUM SHORTFALL OF.STAFF IN MINISTRY OF WORKS (1981/82) (As Estimated by MOW)

Required Actual Shortfall.= Positions Positions

a) ADMINISTRATION

1. Director 1 1 2. Senior Manpower Man. Officer 1 - 1 3. Manpower Management Asst. 1 - 1 4. Accountant Grade III 1 1 - 5. Accounts Clerks 7 6 1

b) PROJECT PLANNING & DESIGN

6. Principal Ex. Engineer 1 - 1 7. Senior Ex. Engineer 1 1 8. Executive Engineer (Planning) 1 - 1 9. Executive Engineer (Roads) 4 2 2 10. Executive Engineer (Structures) 3 1 2 11. Asst. Executive Engineers 8 3 5 12. Technicians - Civil, Survey & 31 5 26 Draughting

c) CONSTRUCTION

13. Senior Executive Engineer 2 1 1 14. Executive Engineer 10 5 5 15. Legal Advisor 1 - 1 16. Asst. Ex. Engineers 27 16 11 17. Technicians 85 21 64 18. Accountant-Grade III 2 - 2 19. Accounts Assistants 4 4 d) MAINTENANCE

20. Principal Ex. Engineer 1 - 1 21. Senior Ex. Engineer (Civil) 1 1 - 22. Senior Ex. Engineer (Mech) 1 1 - 23. Principal Tech. (Roads) 1 1 - 24. Executive Engineer (Mech/Civil) 11 7 4 25. Asst. Executive Engineers 9 1 8 26. Senior Technician (Roads) 9 5 4 27. Technicians (Roads) 47 20 27 28. Technicians (Mech) 108 39 69

Total 378 137 241

1/ In 1982/83: about 120 engineering graduates are expected to return,to MOW.

Source: NOW, Dar es Salaam, December 1981. Table 2.6 24.

TANZANIA TRANSPORT SECTOR MEMORANDUM

CREWS FOR ROAD MAINTENANCE

Name of Crew Estimated Recycling Theoretical Available Shortfall Production Period Requirement Crews /year (Needs) in 1981

A: Periodic

1. Asphaltic Concrete 25,km 10 years 4 NIL 4 Overlaying Crew

2. Surface Dressing 100 km 4 years 7 1 6 (Resealing) Crew

3. Regravelling Crew 40 km 5 years 22 2 20

B; Routine

4. Patching Crew 200 km yearly 34 6 28

5. Regrading Crew 500 km Quarterly 19 6 13

6. Quarying Crew - - 14 1 13

7. Bridge & Culvert - - 18 - 18 Crew

TOTAL 118 16 102

Source: MIOW, DAR ES SALAAM, December 1981. Table 2.7 25. TANZANIA TRANSPORT SECTOR MEMORANDUM EQUIPMENT FOR ROAD MAINTENANCE CREWS

Equipment/Plant Expected Avail. 5th Total Current-' Shortfa Under 5th now + Request Shortfall after d Highway Project Avail. (Needs) Dec. 81 new equ

1. Bulldozers 7 25 32 56 31 24

2. Front End Loader 9 18 27 140 122 113

3. Graders 26 35 61 128 93 32

4. Truck - Tippers 103 158 261 380 122 119

5. " -Lwb 5 36 41 154 118 113

6. " - L'Rover 63 18 81 154 136 73

7. " - W. Bowser - - - 122 - -s

8. " - Fuel Tank 4 19 23 154 135 131

9. Rollers 32 14 46 122 108 76

10. Water Pumps 29 8 37 122 114 75

11. Maintenance Grader 16 0 16 77 77 61

12. Bitumen Heater 1 17 18 45 28 27

13. Bitumen Sprayer 1 2 3 45 43 43

14. Chipping Spreader 1 1 2 41 40 39

15. Tractor Industrial 22 - - 118 - -

16. Tractor Attachment - Bucket 22 0 22 118 118 96 - Mower 22 0 22 118 118 96 - Back hoe 22 0 22 118 118 96

17. Paver - 1 1 4 3 3

18. Airtool (sets) 4 0 4 36 36 32

19. Compressor 1 10 11 18 8 7

'20. Concrete Mixer 1 2 3 18 16 15

21. Concrete Vibrator 3 3 6 18 15 12

22. Crusher (Mobile) 1 0 1 15 15 14

1/Shortfall Column 5-- Total Requirement -. Available 2 /Shortfall after delivery of new equipment - Column 4 - Column 3, as estimated by MOW. Source: MOW. DAR ES SALAAM, December 1981 Table 2.8 26.

TANZANIA

TRANSPORT SECTOR MEIORANDUM

Expenditures on Rural Roads (in TSh 000')

1978/79 1979/80 1980/81 Local Foreign Local Foreign Local Foreig a) Development Fund-/ 43,916 2,356 42,328 7,000 39,707 43,81

b) Recurrent 2/ 75,419 - 70,824 - 68,827 -

c) Estimated Length of Rural Roads (in kn) 31,300 35,200 33,100

1/ Funds earmarked for Rural Roads Development and Construction are occasionally used for road maintenance.

2/ Funds used for maintenance of Rural Roads in all 20 regions of the country

Source: Regional Administration Office, Dar es Salaam, December 1981. Table 2.9 27.

TANZANIA TRANSPORT SECTOR MEMORANDUM

FEEDER ROADS CONSTRUCTED UNDER MOW SUPERVISIONI/

LOCATION KM DATE TOTAL COMPLETED COST

______TSH MILLIONS

GEITA 230 OCT 78 29.8

MARA 146 MAR 77 13.4

BUKOBA 84 MAR 78 7.8

LUREMBE 69 JUNE 76 6.4

RUNGWE 194 OCT 76 16.5

LUSHOTO 335 DEC 78 37.5

TOTAL LENGTH 1,058

1/ Financed by IDA

Source: MOW, DAR ES SALAAI, December, 1981 Table 2.10

TANZANIA TRANSPORT SECTOR MEMORANDUM Estimated Motor Vehicle Fleet

(a) By Type (b) By Ownership:/

1972 1980

Motorcars and Station Wagons 35,862 24,514 1. Government 8,454

Pick-ups 15,136 10,920 2. Public Service 2,620

Vans 2,238 12,484 3. Private 75,869

Trucks and Tankers 16,157 19,450-/ (Commercial) (27,054)

Buses 4,089 3,563 4. Others 11,423

Others (Trailers, Tractors, Motorcycles, Special Vehicles) 24,884 29,575-

TOTAL 98,336 1 0 0 , 5 06/ TOTAL 98,336

1/ According to the situation in 1972.

2/ Includes trailers (3,277).

3/ Includes about 7,000 tractors and about 14,000 motorcycles.

4/ Total Fleetin 1980 without motorcycles and tractors was about 80,000 vehicles.

Source: Ministry of Communication and Transport, Dar es Salaam, Motor Vehicle Distribution Study, TISCO, December 1981. Table 2.11 TANZANIA 29. TRANSPORT SECTOR MEMORANDUM

MOTOR VEHICLES: NEW REGISTRATION (All Vehicles: Private and Government)

Type of Motor Vehicle 1975 1976 1977 1978 1979

Motor Cars 3,490 3,360 1,878 3,143 3,875

Light Commercial Vehicles-/ 729 489 664 1040 1.687

Motor Cycles 16410 3l590 2,709 2,816 3194

Trucks and Tankers 1194 746 1539 1,984 2,229

Buses 463 117 256 269 460

Tractors 498 401 436 486 376

Trailers 246 201 388 416. 466

Others2/ 22 31 26 37 56

Total 6058 41935 7,894 10,221 12343

(Government Vehicles Only) Motors Cars 159 255 249 423 737

Light Commercial Vehiclesl/ 132 113 226 322 447

Motor Cycles 281 326 396 540 401

Trucks and Tankers 195 350 628 387 610

Buseo 12 2 6 20 36

Tractors 3 3 - 2 -

Trailers 28 25 40 28 23

Others-2 11 20 9 11 10

Total 821 p94 15,4734 2264

1/ Pick-ups, Vaus, Land Rovers, Box bodies etc.

2 Ambulances, Bull.dozers, Caravans, Cranes, Fire engines, graders etc.

Source: Central Registry of Motor Vehicles, Dar es Salaam, 1981. Table 2.12 30

TANZANIA TRANSPORT SECTOR MLMORANDUM

ESTIMATED VEdICLE FLEET AT THE END OF 1980 (by Region)

NUMBER OF REGIONS VEHICLES

Mwanza 8,160

Shinyanga 6,600

Kilimanjaro 7.490

Tanga 7,800

Arusha 8,590

Iringa 4,110

Mbeya 3,850

Morogoro 4,810

Dar es Salaam 38,230

Kagera 1,200

Mara 1,950

Ruvuma 1,200

Kigoma 800

Tabora 1,200

Mtwara 430

Dodoma 1,400

Lindi 540

Coast 1,600

Singida 320

Rukwa 320

Total 100,500

Source. Motor Vehicle Distribution Study, TISCO, Dar es Salaam, November, 1981. Table 2.13 31.

TANZANIA TRANSPORT SECTOR MEMORANDUM

REPORTED TRAFFIC ACCIDENTS

1975 1976 1977 1978 1979 CATEGORY

Total No. Of Accidents 8929 7247 6410 7628 6209

PERSONS KILLED:-

Drivers. 59 47 95 7148 91 Passengers 347 236 373 233 571 Cyclists 78 39 60 326 90 Pedestrians 803 593 528 -53 264

Total 1287 915 1056 760 1016

PERSONS INJURED:-

Drivers 728 513 717 659 175 Passengers 2367 2698 3065 2834 2911 Cyclists 614 567 632 1556 707 Pedestrians 1453 1560 1637 507 1400

Total 5162 5338 6051 5556 5193

TRAFFIC OFFENCES:-

Drinks/Drugs 112 93 64 71 173 Dangerous/Careless 1360 457 851 620 1186 Mechanical Deffects 2880 3344 5695 4347 1265 Other Offences 3190 2569 6474 1317 350

Total 7542 6473 13084 6355 2974

Drivers Tested 9230 17248 7375 7073 8036 Vehicles Inspected 23119 15587 20042 21320 26722

Source: Police Force, Ministry of Home Affairs. Dar es Salaam, 1981. Table 2.14 32 TANZANIA TRANSPORT SECTOR MEMORANDUM 1/ ESTIMATED RATIO BETWEEN TRANSPORT SUPPLY AND DEMAND-

A. FREIGHT TRANSPORT (Carrying capacity) (in tons)

REGIONS

Fleet Ownership DODOMA MTWARA RUVUMA MWANZA TABORA

1. RETCOs 128 232 104 105 84

2. Other Parastatals 160 401 240 711 623

3. Private Operators 749 840 562 1,461 589

Total 1,037 1,473 906 2,277 1,296

Total Estimated Annual Capacity 2/ (in Million ton/km):- (i) 24.9 35.3 21.7 54.6 31.1

(ii) 31.1 44.2 27.2 68.3 38.9

B. ANNUAL FREIGHT TRANSPORT (in tons)

REGIONS

Estimated Traffic Flow DODOMA MTWARA RUVUMA MWANZA TABORA l. Intra-Regional 78,000 184,680 87,700 230,543 210,500

2. Inter-Regional 86,400 62,520 83,500 74,621 22,500

Total 164,400 247,200 171,200 305,164 233,000

Total Estimated Annual Demand (in Mlillion ton/km): 53.6 52.8 62.8 72.6 38.3

1/ Covers only 5 out of 20 regions in the country; data is based on the situation in 1980/81.

2/ (i) Assuming 24,000 km/year per truck; (ii) assuming 30,000 km/year per truck

Source: NTC, Dar es Salaam, December, 1981. Table 2.15 33

TANZANIA

Transport Sector Memorandum

Road Transport Costs and Tariffs (In T Sh)

I. General Cargo

Region Transport Costs Freight Rates a/ (ton/km) (ton/km)

Ruvuma 1.60 2.50

Dodoma 1.84 1.75

Mwanza 1.41 2.05

Tabora 1.59 1.88

Mtwara 2.05 2.50

II. Fuel Transport b/

(i) on pavea roads (1,000 lit./km) : 1.00 (ii) on gravel/earth roads (1,000 lit./km) 1.35

III. Passenger Transport c/

(i) on paved roads (passenger/mile) : 0.25 (ii) on gravel/earth roads (passenger/mile) : 0.27

a/ Rates are not fixed for all 20 regions; freight rates were brought in June-September 1981; b/ Rates are for the whole country; in practice they are higher. cF/ Rates are from August 1980 and apply for the whole country

Source: NTC, Dar es Salaam, December 1981. Table 2.16 34 TANZANIA TRANSPORT SECTOR MEMORANDUM

ESTIMATED TYPE OF SPARES DEMANDED AND ALLOCATION SHARE OF SPARES-'

A. TYPE OF SPARES DEMANDED (in %)

Spares for Approximate percentage of volume demanded

1. Engine 35

2. Wheels and Axles 30

3. Transmissions 20

4. Electrical and Instrument 10

5. Frame and Body 5

Total 100.0

B. ALLOCATION OF FOREIGN EXCHANGE FOR SPARES

Institution % share of total alloca- tion for spares

Government 7,4

Parastatals 11.8

Franchise Holders 46.4

Bazaars 34.4

Total 100.0

1/ Based on general trend in 1976-1980 period

Source: Motor Vehicle Distribution Study, TISCO, November 1981, Dar es Salaam. Table 2.17

TANZANIA TRANSPORT SECTOR MEMORANDUM

GEOGRAPHICAL DISTRIBUTION OF WORKSHOPS/GARAGES, AND THEIR CAPACITIES - 1981

TANG. REGIONS TMC RIDDOCH K.J. COOPER SCANIA MOTORS/ TANG. LEY- D.T. FIAT PRIVATE MOTORS MOTORS MARSHAL- MOTOR LAND DOBIE INCAR GARAGES LL'S MART

No. Cap. No. Cap. No. Cap. No. Cap. No. Cap. No. Cap. No. Cap. No. Cap. No. Cap. No. Cap. No. Cap.

Mwanza 1 14 1 8 1 12 8 40 Shinyanga 2 10 Tanga 1 14 1 14 1 13 1 10 1 20 1 10 3 15 Arusha 1 14 1 14 1 6 1 10 1 20 1 10 1 15 5 27 Kilimanjaro 1 10 1 4 1 10 1 20 1 10 3 18 Mbeya 1 8 1 10 1 8 2 10 Morogoro 3 17 Iringa 1 10 1 12 1 15 1 15 1 7 Kagera 3 19 Mara 1 6 DSM 3 60 3 50 1 30 2 40 1 24 1 105 1- 1 35 1 25 1 25 30 230 Dodoma 1 5 2 10 Kigoma 1 5 Mtwara 1 6 Tabora 2 8 Lindi 1 6 3 15 Coast - - Ruvuma 1 4 Singida 2 9 Rukwa 1 4

Total 8 122 7 98 8 94 7 85 2 32 4 165 4 30 1 35 1 25 3 55 74 460

Source: Motor Vehicle Distribution Study, TISCO November 1981, Dar es Salaam. -n Table 2.18 36

TANIZANIA TRANSPORT SECTOR MEMORANDUM

NATIONAL BUS SERVICES (KAMATA) OPERATING STATISTICS

Passengers Transported (Number) Buses (number)

1975 844,380 103

1976 797,038 94

1977 902,430 94

1978 1,019,745 94

1979 1,605,665 83

1980 1,874,874 66

Source: Economic Survey of Tanzania 1980, and NTC, Dar es Salaam. Table 2.19 37

TANZANIA TRANSPORT SECTOR MEMORANDUM

CITY BUS SERVICES (UDA) OPERATING STATISTICS

1/ Year Passengers (in Mill.) Motor Vehicle Fleet-Y Total Mileage (in Mln. km) Buses Mini-Buses

1975 80.8 322 50 10.83

1976 86.2 280 50 9.98

1977 94.8 280 50 11.88

1978 94.5 230 66 10.13

1979 99.3 230 66 9.65

1980 105.9 224 44 9.58

1/ End of the year.

Source: Economic Survey of Tanzania 1980. TANZANIA Table 2.20 38. TRANSPORT SECTOR MEMORANDUM 1/ GOVERNMENT REVENUES FROM ROAD USERS- (in TSH Million)

1975/76 1976/77 1977/78 1978/79 1979/80. 1980/81

1. Road Motor 48.4 39.0 79.3 108.1 n.a. n.a. Vehicles Duties/Taxes 2. Spares & Tires 6.4 10.3 11.6 24.8 n.a. n.a. Duties/Taxes

3. Motor Vehicle 12.7 11.5 11.4 11.8 33.4 57.0 Taxes & Licenses

(i) Commercial 5.8 4.8 4.7 4.9 5.8 6.5 Vehicle Licenses

(ii) Motor Vehicle 0.9 0.6 0.7 0.7 0.7 0.8 Regl7tration Tax-

(iii) Motor Vehicle 6.0 6.1 6.0 6.2 6.4 7.2 Tax & Transfer

(iv) Motor Vehicle - - - - 20.5 42.5 Roa 4 /License Feei/

4. Revenues From Fuel Taxes

(i) Gasoline Super n.a. n.a. n.a. 116.50 138.29 130.12

(ii) Gasoline nwa. n.a. n.a. 62.21. 66.26 71.11 Regular

(iii) Diesel Fuel n.a. n.a. n.a. 57.38 64.83 58.46

1/ It could be estimated that in 1980/81 about TSH 470 Million (US$57.3 Million) contributed to overall Government Revenues, exceeding substantially Government annual average capital and recurrent expenditures on roads (estimated at TSH .280 Million).

2/ In addition, about TSH 0.5 million is collected by Police for vehicle technical inspection.

3/ Road License Fees are paid by all private vehicles (commercial and non-commercial) once a year; the fee ranges between TSH 350-2,500 (from passenger cars to trailers).

Source: Treasury, Dar es Salaam, December 1981. Table 2.21 39

TANZANIA

TRANSPORT SECTOR MEMORANDUM

Summary of Customs Duties and Sales Taxes Related to Transport-/

Customs Duties Sales Taxes 1. Road Motor Vehicles Spare Parts 20% 25%

2. Tires 25% 25%

3. Aircraft, Marine and Road Motor Vehicle Engine 20% 25%

4. Rail Locomotives Free Free

5. Railway Rolling-Stock Free Free

6. Road Motor Vehicles2/

a) passenger cars up to 1,750 cc 20% 75% b) passenger cars from 1,750-2,350 cc 60% 100% c) passenger cars over 2,250 cc 120% 100%

7. Motorcycles 20% 50%

8. Trucks 20% 25%

9. Buses 20% 25%

10. Boats and Ships 20% 25%

11. Gasoline

a) regular Free TSh 1,550/m3 b). super Free TSh 1,950/m3 .c) aviation Free TSh 250/m

1/ System effective June 1981.

2/ For new vehicles only; used vehicles have a declining scale.

Source: Treasury, Dar es Salaam, December 1981. 40.

3. Railways

(a) Tanzania Railway Corporation

I. Introduction

3.1 The Tanzania Railways Corporation (TRC) is a large, long-haul system. It covers about 2,640 km with a maximum haul of 1,250 km and links five major port areas -- Dar es Salaam and Tanga on the Indian Ocean, Mwanza and Musoma on Lake Victoria, and Kigoma on Lake Tangayika. It is the only link between several important centers in Tanzania since there is no alternative road system, and it handles transit traffic for the land- locked countries Zaire, Rwanda and Burundi. TRC should be the country's major long-distance transporter, but its present performance and budgetary allocation do not reflect its importance to Tanzania's economy.

A. Brief History of TRC

3.2 In 1886, the colony of German East Africa was founded and within 25 years, 350 km of tracks (Tanga to Moshi) reaching the rich agricultural areas around Mount Kilimanjaro were completed. The Central Line between Dar es Salaam and Kigoma (1,248 km) was completed in 1914 linking the heavily populated areas north of Lake Tanganyika. After the First World War, Belgium and Great Britain partitioned the colony and assumed its administration. From 1925 to 1928, the Central Line was extended to Tabora and Mwanza (386 km), opening up the agricultural lands of Sukuma and giving access to Lake Victoria and the Haya Kingdom on its western shore. In 1947, a branch line was constructed to Mpanda (213 km), and in 1968, another was constructed to Mikumi; it was extended to Kindatu (108 km) in 1965. Between 1960 and 1963, the Link Line was built from Ruvu Junction to Mwanza Junction (188 km). Since 1965, no further changes have been made to the TRC system, but Tanzania's rail network was increased significantly by the construction of the TAZARA railway linking Dar es Salaam and Zambia. The TAZARA has a gauge of 1.067 m compared to 1.00 for TRC, and at the present time, there is no connection between the two railways. 41.

3.3 The East Africa Community (EAC) was formed between Tanzania, Kenya, and Uganda in 1967. The railways became a cornerstone of the economic community. Beginning around 1973, EAC began to weaken and was finally dissolved in 1977. The resulting impact on the Tanzania rail system was and continues to be significant. In 1977, the Tanzania Railways Corporation (TRC) was formed tooperate the former EARC services in Tanzania, including the lake shipping lines and ports on Lakes Victoria and Tanganyika and also some connecting road transport. TRC has suffered from major traumas in its five years of existence. First, the dissolution caused an absolute and seasonal decline in locomotive and wagon availability and shortage of experienced manpower, leading to serious management problems. Workshop/maintenance facilities and administrative services previously pro- vided in Nairobi were no longer available and by 1977, all official railway communication among the countries ceased to exist. Second, the closing of the Kenya-Tanzania border in 1977 ended access by Tanzanians to the financial and statistical records in Nairobi. The computer programming systems of EARC were also in Kenya and, as a result, TRC has had to record and organize its operational data manually. Tanzania was also denied access to Kenyan trans- port and marketing services for Mombasa port infrastructure, which had been closely integrated with the agricultural production particularly of Tanzania's northern regions. In addition, access to many of the traditional international financing sources for the EARC had to be developed by the newly independent Tanzanian railway. This lack of financing has retarded such needed programs as the conversion of the locomotive fleet from steam to diesel locomotives.

B. The Role of TRC in the Tanzania Economy

3.4 TRC acts as the principal catalyst in four fields of economic activity:

(a) transport of agricultural products and their inputs; (b) transport of consumer/industrial goods for distribution; (c) passenger transport; and (d) transit traffic for Rwanda, Burundi, and Zaire.

3.5 First, TRC's location is important; it services 12 of Tanzania's 20 regions.6/ These regions produce over 70% of the marketed exportable agricultural products and food grains and have over 70% of the population. Estimates from the late seventies indicate that about 43% of the nation's total goods traffic went by rail, 54% by road and 3% by water transport, while 32% of all passenger journeys in Tanzania were by rail. Unlike many other African countries, Tanzania does not have an extensive informal transportation system of highway taxis and converted pick-up trucks.

3.6 Agriculture is the backbone of the Tanzanian economy. It accounts for 40% of GDP, 64% of export earnings and 83% of the labor force. About 64% of all marketed exportable agricultural products are produced

6/ Dar es Sala*a/Coast, Morogoro, Tanga, Arusha, Kilimanjaro, Mwanza, West Lake, Dodoma, Singida, Shinyanga, Tabora, and Kigoma. 42.

within the TRC network.7/ Some 80% of all marketed cereal and food grains are produced in the 12 regions 8/; these regions also have most facilities for milling cereal and for processing coffee, cotton, sisal, tobacco, cashewnuts, tea and pyrethrum.

3.7 Given the importance of speedy and economical food distribution and commodity transportation, an efficient TRC operation could reduce imports of food grains and increase foreign exchange earnings through agricultural exports.

3.8 Approximately 41% of TRC's traffic are consumer and industrial goods; 56% arecement and petroleum (petroleum refining facilities and the major cement factory are located in Dar es Salaam). Thus, TRC supplies the regions' economies and basic industries with consumer goods (which are produced mostly in Dar es Salaam/Coast region) and with industrial inputs (both produced domestically and imported).

3.9 Transit traffic from landlocked Zaire, Burundi and Rwanda is 10% of total TRC traffic. These countries are assigning increasingly high priority to developing alternative deepwater port access routes after 1979 when circumstances cut their sole access through Kenya. TRC offers an alternative route for these countries; however, because it is unreliable and there are delays in shipments (caused by inefficiency of TRC opera- tions), the landlocked countries have hesitated to use it.

II. Organization and Managemer.t

3.10 TRC was created by an Act of the National Assembly in July 1977. It is now trying to organize and equip itself to be a viable commercial entity., It has had to establish a new operating company to take over, supervise, and run an already long existing railway, a hotel and catering service, and trucking, bus and marine services.

3.11 It is a semi-autonomous parastatal under the Ministry of Communications and Transport and is headquartered in Dar es Salaam. Although Government holds a controlling interest, TRC is expected to be a commercial enterprise. Pay scales and fringe benefits are regulated by a committee appointed by the President which works in conjunction with the Ministry of Manpower Development.

3.12 The TRC General Manager reports to a Board of Directors. He acts as Chief Executive Officer and is reponsible for day-to-day operations. The Board deals with policies, strategy and major corporate and investment planning. It consists of a Chairman and a General Manager who are appointed by the President of Tanzania and seven to nine other members appointed by the Minister of Communications and Transport. The Vice Chairman is elected by the Board members.

7/ For example, 84% of coffee, 87% of cotton, 98% of Sisal, 53% of tobacco, 37% of tea and 22% of cashewnuts.

8/ For example, 77% of maize, 94% of wheat, 85% of sorghum, 100% of sugar, and 43% of rice produced in Tanzania. 43.

3.13 The truck and bus services have separate management headquarters and a repair base at Iringa, but they report directly to the TRC Chief Traffic Manager in Dar es Salaam.

3.14 The hotel chain and catering service is primarily for railway passengers. TRC operates hotels at five locations where there are no hotel offerings of acceptable levels of service.

3.15 The marine services on Lake Tanganyika and port operations at Mwanza (Lake Victoria) are also under TRC's management. It operates wagon ferries, passenger ships and general cargo ships on Lake Victoria and owns and maintains all docking facilities at Mwanza. On Lake Tanganyika, it operates a passenger boat between Kigoma and Burunai, and Zairan, Zambian and Tanzanian ports; most of the dock facilities at Kigoma, however, are owned and maintained by the landlocked countries.

3.16 The management of thesevaried functions is under the aegis of TRC's main function -- railways. No attempt has been made to operate each function as an independent business, and there is no separate cost accounting system for these extraneous operations.

3.17 Various donor agencies are supplying technical assistance to TRC. CIDA supplies technical assistance to the Morogoro maintenance facility, train operations, finance and accounting, supplies control, and the corporate planning department. DANIDA has a marine engineer in the port of Kigoma to improve operations and the Federal Republic of Germany Aid supplies technical assistance at the Tabora and Moshi Diesel Workshops.

III. TRC Assets

3.18 rRC has 2,640 km of tracks with a maximum haul of 1,200 km and serves most of Tanzania's major production centers in addition to pro- viding transit services for Zaire, Burundi, Rwanda and Uganda. It also links four important port areas: Dar es Salaam and Tanga on the Indian Ocean, the Lake Victoria ports and the port of Kigoma on Lake Tanganyika. The railway consists of two main lines: the Central Line (Dar es Salaam to Kigoma) and the Tanga-Moshi-Arusha line. These are connected by a link line between Ruvu Junction and the Mrauzi junction. The Central Line has three branch lines, Kilosa-Mikumi-Kidatu, Tabora-Shinyanga-Mwanza and Kaliua-Mpanda.

3.19 About 1,100 km of TRC's track is 60 pounds per yard (ppy) and about 900 km is 56.12 ppy. The remainder is 45 and 55 ppy and is limited to use in sidings. All of the 60 ppy track was laid between 1957 and 1978; the 56.12 ppy track remaining in the Central Line has been there since the time of construction 65 years ago and requires gradual replacement. 3.20 According to CIDA's report, TRC's track is still in satisfactory condition considering its age, but some of it is badly worn. Despite this, the service failure rate is said to be low. Although the rail can carry the present maximum axle loads, speeds must be restricted to 35 mph because of the limited strength of the fish plates. These preclude using 44.

heavier locomotives even though the rail itself could handle them. Most of the system is ballasted with crushed rock; however, ballast in many sections is either the wrong size, too thin, or non-existent, and it con- sists simply of earth in all crossing loop tracks.9/ Steel sleepers are standard throughout the system except in turnouts where treated wooden ones are used.l0/

3.21 The condition of the more than 140 bridges on the system is unknown. Most of them are steel and 97 of the ones which were inspected by German consultants need work ranging from strengthening or repairs to complete replacement.

3.22 Motive Power and Rolling Stock

Motive Power and Rolling Stock (as of November 1981)

Locomotives a! 120 diesel 30 steam Passenger Carriages 141 Other Carriages b/ 162 Freight Wagons 3,658

i l.e above statistics are, however, not a good indication of the actual motive power fleet. The steam locomotives are currently used only to relieve the critical shortage of available diesel units (due to poor main- tenance and lack of spare parts). TRC has dicontinued the general overhaul of steam locomotives and they will be completely phased out in the near future. Preliminary calculation indicates that even with 50% diesel locomotive availability, TRC has adequate motive power to meet the current level of demand. b/ Inspection coaches, caboose, brake vans, luggage vans, etc.

Source: TRC, December 1981. See Annex I for breakdown of each component.

Current Status of Diesel Locomotive Fleet Years in Operational Class Service Number BHP Service Condition Availability

34 shunting 6 194 1950-51 scrapping 0% 35 shunting 4 302 1973 ok 25%

9/ The CIDA study and Government of Tanzania put reballasting as a high priority. However, since derailment and service failure rates are claimed to be low, further investigation is necessary to determine the necessity of reballasting.

10/ There is a concrete sleeper plan in Tanzania built to manufacture sleepers for the construction of the TAZARA railway. It is jointly owned by Zambia and Tanzania, but currently, it is not in production. The plant can conceivably supply concrete sleepers for future replacement of steel and treated wooden sleepers on TRC lines; however, the ownership of the plant must first be settled between Zambia and Tanzania. 45.

Years in Operational Class Service Number BHP Service Condition Availability

36 'shunting 20 324 1980 ok 100% 43 shunting 6 300 1955-56 scrapping 0% 64 small ML 24 760 1979 ok 50% 72 small ML 2 1,240 1972 ok 1007% 73 small ML 15 1,380 1976-77 ok 40% 87 mainline 8 1,840 1967 scrapping 13% 88 mainline 35 2,050 1972-80 ok 60%

Total Locomotives: 120 Given the locomotives which are being scrapped, the actual fleet for TRC is 100.

Source: TRC, December 1981.

3.23 The diesel locomotive availability rate averages a low 51% mainly due to lack of maintenance facilities, trained mechanics and spare parts -- characteristic of the entire sector.

3.24 The freight wagon availability rate is undetermined. A quarter of the fleet is unavailable at any given time because wagons are used as go-downs. 70% of them are in good to excellent condition, 20% are in poor to fair condition and less than 10% are unserviceable. It seems that the unsatisfactory wagon availability has been caused by inefficient distribu- tion and management and not by repair problems. The theoretical carrying capacity of the wagons is about 2.15 million tonnes per year 11/, which is far more than the one million tons of goods carried in 1980. Even with an availability rate of 75%, the capacity is adequate to handle current demand.

3.25 .Most of the passenger wagons are run-down, about 60% of them are overdue for general repair and 30% of them are more than 30 years old. The potential excess wagon capacity does not apply to passenger carriages. Passenger traffic declined from 4.7 million in 1973 to 2.0 million in 1980, as road transport increased. Given the latter figure, the average number of passengers per coach seat is estimated at 203 (141 coaches x 70 seats), which implies heavy use of the coaches and undercapacity.

Maintenance Facilities

3.26 There is only one major diesel locomotive maintenance and repair facility -- at Morogoro. However, it is not fully equipped and therefore cannot handle the diesel fleet's needs. The Dar es Salaam workshop, which is converting to a wagon repair shop, has a small diesel maintenance facility for accident damage. There are four other servicing locations for rolling stock, but their facilities are minimal and they can handle only minor emergency repairs. Currently, a Morogoro Phase II maintenance

11/ See Annex II for calculations. 46. shop is under construction and it will handle the diesel fleet requirement. TRC is also planning a construction of similar facilities at Tabora and Moshi. Technical assistance has been provided at Morogoro Diesel Maintenance Facility (CIDA) and in the rolling stock maintenance facilities at Moshi and Tabora (Federal Republic of Germany).

Road Service

3.27 In addition to railways services, TRC provides road and marine services. Their fleet is:

TRC Road Service -- 1981

Passenger buses: 50 total capacity ...... 2,932 seats

Trucks 21 total capacity 343 tons

Freight trailers 7 total capacity 70 tons

Tankers 5 total capacity 151,175 litres

Tankers trailers 5 total capacity 49,500 litres

3.28 Lake Victoria's marine service capacity is:

Lake Victoria Marine Service - 1981

4 ships (cargo/passenger) 1,552 passengers 1 wagon ferry 42 two-axle wagons 1 oil barge 300 tons 1 cargo ship 150 tons. 2 ships 8 barges (120 tons each) 2 motorized lighters 240 tons 14 lighters 120 tons

Lake Tanganyika Marine Service - 1981

2 passenger/cargo ships 800 passengers/400 tons cargo 1 oil barge 47.

Storage Facilities

3.29 TRC's storage sheds at all major stations accommodate "smalls" traffic.

TRC Storage Facilities - 1981 (in tons)

DSM Goods Depot - outbound shed 400 - inbound shed 400 Morogoro 100 Dodoma 200 Tabora 500 Mwanza - outbound shed 500 - inbound shed 500 - transshipment 500 Musoma 500 Bukoba 1,000 Kigoma 2,000

Total Storage Capacity 6,600

Source: TRC, December 1981.

Modal Interfaces

3.30 TRC interfaces with sea transport at Dar es Salaam and Tanga ports. Portal cranes transfer goods directly from the ships to the railway wagons. Tanzania Harbors Authority (THA) owns the transit sheds and cargo handling facilities and does maintenance on the sidings in the port ares. These ports handle all import and export traffic for the Tanzanian mainland including imports and exports from Zambia, Zaire, Rwanda and Burundi.

3.31 Transit traffic on Lake Tanganyika to and from Zaire, Burundi, and Rwanda amounts to about 120,000 tons annually. It is transshipped at Kigoma Port, operated by AMI for the Tanzanian Government. Goods are either transshipped directly into vessels/wagons by portal and coles cranes or sorted in the transit shed owned by AMI which accommodates about 3,000 tons of palletized cargo. The Government constructed an additional transit shed which holds about 2,000 tons in Kigoma and has handed it over to TRC; it has not been used due to inadequate handling facilities. Rwanda's and Zaire's shipping companies, ARNOLAC and SNCA respectively, share the transit trade to and from their countries. TRC does own two passenger cargo ships and an oil tanker which it does not use for this trade now, but expects to soon.

3.32 Local traffic for the Lake Victoria zone and Uganda is transshipped at Mwanza where TRC operates a wagon ferry, an oil tanker, and five passenger cargo ships (a livestock ship, two eight-bay ships and lighters) which provide a total capacity of about 2,110 tons. TRC owns all the facilities (transit and storage sheds and handling equipment) at Mwanza, Kemondo Bay and,Musoma ports. 48.

3.33 There is an interface between TRC rail and road services at Mikumi. Here, general goods and petroleum products are transferred into lorries bound for the southern highlands, and coffee, tea and pyrethrum are brought to the railhead for transport to other parts of the country.

IV. Railways Operations

3.34 TRC's utilization rate has declined steadily since 1972. Total goods traffic went from 1.68 million tonnes to 1.08 million tonnes in 1980, about 6% per year. Similary, passenger traffic went from 4.2 million in 1972 to 1.9 million in 1980, about 59% per year. Poor fuel distribution and low rolling stock availability contributed heavily to the fall in freight traffic, and poor management, limited capacity and an expansion of road transport explain the passenger traffic decline.

TRC Traffic Record

Year Passengers ('000) Freight ('000 tonnes)

1972 4,178.1 1,622.8 1975 3,962.7 1,440.6 1976 3,362.1 1,244.7 1977 3,876.7 1,167.5 1978 3,805.2 1,035.4 1979 2,209.2 850.0 1980 1,944.6 1,080.2

Source: CIDA-financed study (for the latest statistics on breakdown of traffic by commodity, see para. 4.14).

3.35 -TRC is the sixth largest African railway when measured by length of tracks and the volume of traffic.

Length and Annual Tonnage Track (km) Traffic (million tons)

Sudan 4,800 Zimbabwe 6.70 Zaire 4,600 Sudan 2.70 Nigeria 3,500 Zaire 2.20 Zimbabwe 3,200 Nigeria 1.70 TRC 2,640 TAZARA 1.10 TAZARA 1,850 TRC 1.03 Cameroon 1,200 Zambia 1.00 Zambia 1,100 Cameroon o.54 Senegal 1,000 Senegal 0.40 Ethiopia 780 Ethiopia 0.31 Mali 640 Malawi 0.31 Benin 580 Mali 0.19 Malawi 560 Benin 0.17

Source: CIDA-fijianced study, 1981 49.

3.36 Although it is average in terms of employees per kilometer of track, it is below average in units of traffic moved per employee. The annual freight traffic per wagon shows TRC as the lowest of all the reported railways and indicates low productivity and underutilization. It is also below average in traffic units moved per diesel locomotive. The comparative data is: Comparative Performance Measure

Traffic/Employee (in tons) Employees/Km

Zimbabwe 320 Zaire 5 Zaire 100 TAZARA 5 TAZARA 100 TRC 5 TRC 65 Zimbabwe 7 Malawi 62 Malawi 9

Annual Freight Traffic/Wagon Traffic/Locomotive ('000 ton/km) (million tu)

Mali 460 Sudan 21,000 TAZARA 430 Zaire 14,000 Malawi 400 Senegal 12,000 Senegal 360 Cameroun 12,000 Benin 350 Zambia 11,000 Zaire 340 TAZARA 11,000 Ethiopia 300 TRC 10,000 Nigeria 230 Nigeria 9,500 TRC 210 Ethiopia 8,600 Benin 8,500 Malawi 7,900

Source: CIDA-financed study, 1981.

3.37 The heaviest traffic is between Dar es Salaam and Tabora; 50% of the traffic originates in Dar es Salaam. The traffic flow is not balanced; 62% is inbound (moving from Indian Ocean, east to northwest movement) while only 38% is outbound (flowing into Dar es Salaam and Tanga). This is because imports (i.e. petroleum, fertilizer, spare parts and machinery, including the transit traffic) and consumer goods (mainly pro- duced in Dar es Salaam area) form the majority of the traffic. This imbalance adds to the problems of wagon distribution and forces the move- ment of empty wagons.

3.38 The low wagon and locomotive productivity reflects fundamental deficiencies in TRC:

(a) low locomotive availability due to lack of maintenance facilities, skilled labor and spare parts;

(b) low wagon avallaDility due to use of wagons as go-downs ,and congestion at Kigoma and Mwanza (caused by delays in transshipment and lack of port facilities and ships); 50.

(c) poor telecommunications system; and

(d) lack of management data, and resulting poor traffic management and disorganized wagon distribution system.

3.39 The wagons are allocated by the District Controllers (in five districts: Dar es Salaam, Mwanza, Tanga, Tabora and Lake operations in Kigoma) based on requests submitted by station masters in each district. The district officer then allocates them according to either Government or circumstantial priorities such as special movements of nominated traffic or emergency relief food. The inadequate communications system makes efficient coordination of wagon allocation virtually impossible. At the moment, telephone and rail links are used for communication, but this will have to be upgraded. There are several daily records and reports dealing with the quality and volume of operations which are submitted to headquarters and available to all levels. These could form the basis of an effective management information system, but their usefulness is limited by TRC's lack of manpower to systematically analyze them.

3.40 Using wagons as go-downs also lowers the productivity of TRC. Customers often store goods which will not be unloaded promptly at their destination. The Kigoma and Mwanza interfaces seem to be the main bottlenecks. The lack of storage facilities and wagon and freight ferries to carry the commodities tied up wagons, backing them up all the way to Dar es Salaam. Loaded wagons await transshipment while wagon shortages occur all around the system. At any given time, a quarter of the entire wagon fleet is under load ardimmobilized.

3.41 Another problem is the shortage of tanker wagons. Although there are 44 petroleum tank wagons, 192 petroleum tank bogies, 43 fuel oil wagons and 32 diesel oil wagons in service, the industrial production and transport industry in the northwest suffer from fuel shortages because they do not receive shipments of black-diesel fuel and gasoline when needed. The problem seems to lie in the storage capacity for fuel in these areas. Where storage capacity is inadequate, tanker wagons are used for temporary storage, causing a shortage throughout the system.

3.42 The average turnaround time (load to load) is roughly 26 days (average delays for wagons shipped to Mwanza and Kigoma is 60 days). This is despite the fact that the longest scheduledround trip running time should be less than five days.

3.43 According to the CIDA study, in 1979 the actual demand for TRC service was about 1.8 million tonnes and 5.4 million passengers. Of this, TRC was able to carry only about 850,000 tonnes (47%) and 2.8 million passengers (52%). The remaining traffic had to rely on the more expensive road transport services. Thus, although production rates for the principal commodities which TRC carries have been falling, the demand for TRC services is higher than can be provided. The fall in transit traffic is due largely to the dissatisfaction of the neighboring countries with the 51. unreliable and slow service. In 1978, only 5% of the freight trains operated arrived at the destinations as scheduled.

3.44 The CIDA study concluded that TRC is the most cost efficient transport in Tanzania and that the continued decline in TRC operations (for both passenger and freight) has critically affected the Tanzanian economy. The study identified the major sources of poor TRC operations as:

(a) underutilization and shortage of wagons, carriages and locomotives;

(b) inadequate communications facilities;

(c) shortage and low productivity of qualified staff (especially among the middle and senior level staff);

(d) congestion at Kigoma and Mwanza;

(e) inadequate maintenance facilities and spare parts; and

(f) weakness in the track system (especially ballasting).

3.45 Based on this, the consultants have recommended a 20-year investment program to rehabilitate TRC. It would cover the major bottlenecks above; well over half of the investment would be aimed at creating new capacity.

3.46 This 20 year investment period seems too long in view of the uncertainty in the Tanzanian economy. A five-year, intensive investment program would seem more advisable. In addition, the investment into increasing the capacity of the wagon and locomotive fleet is premised on long-term traffic projections which need careful review. Given the potential capacity of the current TRC fleet, investment in this area is not warranted (see para. 3.59 for detail); improvement/construction of workshops and increased supply of spare parts should be sufficient. Training and technical assistance program is treated as a low level priority when in fact it should receive highest priority. Along with poor communications facilities and congestion at Kigoma and Mwanza, training and increased productivity rates are the most critical problems not only for TRC but for the entire sector and they must be treated more intensively but not on the expansive level of the Tabora railway college which is premature and too expensive. The improvements to the communica- tions system, identified as the most critical bottleneck, are justified; introduction of microwave is recommended but not reviewed further. Finally, the congestion at Kigoma and Mwanza is clearly blocking wagon efficiency, but the situation has not been clearly described and further review is necessary before any investment is made.

3.47 The major challenge facing TRC and its future development is to close the gap between present traffic rates on the system and the potential demand. The turnaround time for wagons and locomotive availability rates 52. must be improved significantly. Since it is unlikely that TRC's traditional commodities will exhibit high growth rates over the next ten years, keeping pace with demand should not be difficult once the present chasm between supply and demand is closed.

Estimated TRC Demand - 1978 ('000 tonnes) Estimated Actual Percent Demand Traffic Shortfall

Petroleum 340 170 -50% Grains 240 60 -75% ZBR Transit 240 110 -54% Cement 200 74 -63% Coffee 96 75 -22% Sugar 86 15 -83% Cotton Lint 59 41 -31% Livestock 58 25 -57% Fertilizer 50 15 -70% Cattlecake 38 14 -63% Sisal 30 13 -57% All Others 500 450 -10%

Total 1,950 1,060 -46%

Port of Kigoma (Transit Traffic)

1978 149,051 tonnes 1979 135,469 tonnes 1980 116,466 tonnes

Source: TRC (Transit Traffic through Lake Victoria is small, about 7,000 tons for Uganda).

3.48 TRC employs about 16,300 workers L22/, but the vacancy rate for all employees is about 27% and that for higher professional staff (management and technical) is 35-40%. Management is further complicated by high turnover rates in this latter category (approximately 50%). The major cause is the characteristic absence of a manpower pool with the required qualifications. Internal promotion often results in unqualified candi- dates for the vacated position. TRC cannotoffer competitive salaries and benefits to attract and retain qualified people.

12/ For TRC, the number of employees per km is about average in comparison with other African railways (five employees/km), however, the traffic/ employee is low in comparison to other railways (65 tonnes/km). Over employment, especially in lower ranks, is suspected. =ZXTNAME: trciipag (R)k: UZ

53. V. Financial Performance of TRC

3.49 The table below shows TRC's financial performance from 1975 to

1980.

Revenue and Expenditure Figures: 1975 to 1980 (T Sh Million)

Revenue 1975 1976 1977 1978 1979 1980 (est) (f'cst)

Passenger Traffic 40.4 61.0 60.0 47.4 58.2 77.1 Other Coaching Traffic 8.6 11.7 13.7 11.7 14.6 19.4 Freight Traffic 190.4 211.5 212.8 200.2 198.7 289.2 Livestock (Goods) 13.4 21.2 13.4 11.0 17.5 21.4 Hotel & Catering Services 11.4 14.0 19.5 22.3 24.4 34.6 Water Transport Services 3.2 1.9 2.3 3.5 10.3 18.7 Road Services 21.2 6.4 11.3 21.9 24.9 30.5 Miscellaneous (net) 2.1 2.9 3.5 5.2 11.5 5.9

Total 290.7 329.6 336.5 323.2 360.3 296.9

Expenditure

Maintenance of Structures 39.0 50.0 62.2 69.9 63.3 85.0 Maintenance of Equipment 5.6 3.4 19.3 19.7 15.2 24.2 Locomotive Running Expenses 62.0 40.7 114.5 94.4 90.6 124.5 Traffic Expenses 21.0 22.0 41.6 46.8 37.5 49.3 Hotels & Catering Services 10.2 17.2 24.4 21.5 18.9 26.1 Inland Waterways 2.1 3.3 3.6 6.8 9.8 16.8 Road Services 13.1 16.6 20.6 28.6 15.3 23.1 Administrative & General 53.4 30.5 36.5 58.3 46.6 65.7

Total 206.4 183.7 322.7 336.0 297.2 414.7

Operating margin before depreciation, and interest cost 84.3 145.9 13.8 (12.8) 63.1 82.2

DEDUCT: Depreciation 35.0 35.0 35.0 33.3 60.0 55.0 Interest Cost 30.0 30.0 30.0 11.6 28.4 34.8

Net Profit (loss) 19.3 80.9 (51.2) (57.7) (25.3) (7.6)

Source: TRC, Dar es Salaam, Tanzania, 1981. 54.

3.50 It has incurred net losses since 1977 indicating that revenue has barely covered operations despite the 30% across-the-board freight tariff increase inplemented in 1979 and 1980. The shortfall is due mainly to traffic declines, higher operational costs and increased depreciation charges.

3.51 TRC has no formal financial statements or audited annual report. Its accounting system is haphazard primarily because at the time of EARC dissolution and assets settlement with Kenya and Uganda, TRC lost access to the primary source ledgers maintained in Nairobi and thus has not even been able to open a basic balance sheet position.

3.52 Even before the dissolution, EARC experienced continuous operating deficits including a major liquidity crisis in 1974 which necessi- tated deferral of routine maintenance and cut back on capital replacement and development.

3.53 Given the state of its assets, TRC's actual expenditures for maintenance of track and equipment have been too low; the depreciation allowance also seems too low to cover realistically asset replacement-in real terms.

3.54 A costing system to determine appropriate tariffs does not exist. TRC's most recent request to MCT for tariff increases in 1981 was based on overall corporate results, i.e. on total corporate losses, and not on a detailed analysis of commodities, rail links, etc. The tariffs were raised 30% across the board in 1979 and 1980 but the increase was cut to 15% in 1981. Given Tanzania's high inflation rate, this obviously does not cover operating cost increases caused by inflation.

3.55 TRC uses a tariff structure effective October 1981, based on cost-related variables. However, the absence of cost information and operating statistics per line prevents TRC from aligning its tariff structure with its operational costs. The CIDA study calculates that actual haulage costs 1.7 to 5.4 times less than the road transport.

Comparative Rail and Road Rates (T Sh per ton)

Rail Distance TRC Rail Rated Average Truck Rate Truck/Rail 203 km 90 150 1.7 465 km 140 380 2.7 1,031 km 235 850 3.6 1,229 km 276 1,500 5.4

Source: CIDA-financed study, 1981.

3.56 A thorough review of the current set-up and subsequent organization of appropriate financial information gathering systems particularly for fixed assets and suppliers inventory are particularly critical since these represent a major portion of TRC's assets. 55.

3.57 The 1980 estimate for revenue from freight traffic (T Shs 289 million) is optimistic. Neither traffic management nor locomotive and wagon availability have improved enough to warrant such an increase despite TRC management claims that the 30% tariff increases boosted the revenue. The estimated passenger traffic revenue also appears optimistic (the revenue in 1980 for passenger traffic increased 33%, however). The traffic record for 1980 indicates 12% decrease in number of passengers carried from the previous year.

3.58 In 1977, TRC prepared a four-year railway investment program totalling 1.036 billion Tanzanian shllings (US$ 126.4 million equivalent) with a local component of T Sh 158 million and a foreign component of T Sh 878 million. The plan was continuously revised and the table below indicates what was actually done.

TRC Investment -- 1977-1980 (T Sh '000)

Local Foreign Total

Morogoro Diesel Deport Phase II 11,765 88,051 99,816 Tabora Diesel Depot 8,500 6,516 15,018 DSM Workshop -- Machinery & Equipment 138,265 53,000 66,826 Road ServicesVehicles 7,130 - 7,130 Permanent Way Relaying 25,281 83,865 109,146 Coaching Stock 2,600 69,050 71,650 Goods Stock 1,112 125,000 126,112 Rolling Stock -- ex India 55,589 - 55,589 Steamers, Tugs & Lighters on Lake 7,800 65,640 73,440 Victoria, Tanganyika and Nyasa Telecommunications 4,222 2,000 6,222 Station Buildings 6,266 - 6,266 Machinery and Equipment 10,955 9,680 20,635 Locomotive and Spares - 350,710 350,710 Staff Quarters 3,258 - 3,258

Tabora-Kigoma Telecom Study - 700 700 Railway Sector Study - 8,400 8,400 Railway Technical Asssistance - 12,880 12,880 Kigoma Port Design - 2,500 2,500

158,304 877,994 1,036,298

(US$ million) ( 19.3) ( 107.1)( 126.4)

Exchange Rate: US$1.00 = T Sh 8.2

Source: TRC, Dar es Salaam, Tanzania, 1981. 56.

3.59 TRC's new five year plan has not been approved by MCT and is still in preparation. Their tentative investment program, prepared mostly by consultants financed by CIDA is:

TRC Investment Program (1981/82-85/86) (Tentative)

Equipment T Sh Million Locomotive 120 Wagons 800 Carriages 85 Subtotal 1,005

Equipment Repair Facilities Morogoro Diesel Maintenance Shop 56 Spare Parts 100 Others 14 Subtotal 170

Transportation 15

Permanent Way Track Rehabilitation 180 Bridges 70 Others 60 Subtotal 310

Telecommunications & Signals 170

Headquarters Improvement 76

Purchasing & Stores 11

Training & Technical Assistance 200

TOTAL 1,977 Million

Source: TRC, Dar es Salaam, Tanzania, 1981.

3.60 As recommended in CIDA's report, over half of the investment program (FY82-86) is concentrated on increasing TRC's capacity (locomotive, wagon and carriages totalling T Sh 1,005 million). Given the current capacity, this is unwarranted. More spare parts and an improved Morogoro maintenance facility should increase locomotive and wagon avail- ability sufficiently. Adequate allocations have been made for training and technical assistance, telecommunications and spare parts to improve the bottlenecks discussed in previous sections. However, the program lacks major investment into improving facilities at Kigoma and Mwanza and into increasing TRC's marine capacity. Although T Sh 2.5 million was invested in a Kigoma port design project in 1980/81, no further aid other than DANIDA assistance appears to be available. Given the critical effects of congestion St these lake ports, investment into their improvement should be considered as priority. 57.

3.61 Some of the tentative plan's components were studied and are being executed by CIDA, DANIDA (Danish Aid) and Federal Republic of' Germany aid. CIDA completed the study of the TRC in 1981 and, on that basis, has already initiated a 20 year program including 45 projects with total costs of about T Sh 6,400 million, (US$688 million equivalent).* The CIDA program entails:

(a) replacement of Central Line permanent way with 80 pound per yard rail and new sleepers;

(b) upgrading of the Morogoro diesel maintenance facility

(c) procurement of spare parts, maintenance materials and supplies;

(d) technical assistance to various fields, including general management, traffic management, and financial management.

The Federal Republic of Germany has committed DM 15 million for:

(a) TRC bridge improvement/rehabilitation;

(b) diesel workshops improvement: Tabora and Moshi including a technical advisor;

(c) Tabora Railway College.

DANIDA has committed T Sh 1.65 million grant for purchase of:

(a) spare parts of ship on Lake Victoria and Tanganyika

(b) marine engineer for two years to assist the Kigoma port;

(c) scholarships for TRC staff.

In this flurry of activity, however, there seems to be a lack of effective coordination among the donors to rehabilitate and improve the system on a stringent priority basis. The donors meeting organized by EDF in Brussels in February 1982 should help to alleviate this problem.

3.62 Although TRC management continues to insist on large capital investments, it should target its investments to solve the major problems outlined in VolumeII of the TSM and should avoid any further investments in unnecessary locomotives and wagons.

* Based on the new offical exchange rate of US$1 = TSh 9.3. 58. Annex I

Rolling Stock -- TRC

I. Carriages

Description No in Service

First Corridor Bogie 20 Second Corridor Bogie 27 Third Corridor Bogie 78 Brake Van 108 Brake Caboose Bogie 19 Inspection Coach 29 Others 22

Total 303

II. Goods Wagons Petro Wagons 324 Covered Wagons 2,093 Ballast Hopper Bogie 6 Low sided wagons 519 High sided wagons 541 Cattle wagon Bogie 94 Fuel Moasses Bogie 30 Motor goods Bogie 37 Low open wagon 12 Liquid Petroleum Gas Bogie 1 Crane match wagon Bogie 1

Total 3,658

Source: TRC, Dar es Salaam, Tanzania, 1981. 59.

Annex II

Theoretical Capacity of 1980 Wagon Fleet

Revenue Wagon Fleet: 3685 wagons = 2838 bogie + 820 two-axle wagons.

A. Calculation

1. 2838 bogie wagons with average loacing capacity of 36 tonnes 102,188 tonnes

2. 820 two-axle wagons with average loading capacity of 15 tonnes 12,300 tonnes

Total loading capacity of wagons 14,468 tonnes

B. With average turnaround time of 25 days, annual carrying capacity of the 1980 wagon fleet is:

Annual carrying capacity: 114,468 tonnes x 365/25 = 2,153,500

1. The average annual carrying capacity of each:

(a) bogie wagon would be 36 tonnes x 365/20 - 67 tonnes

(b) 2-axle wagons would be 15 tonnes x 365/20 = 274 tonnes Annex A 60. TANZANIA RAILWAY TRANSPORT SECTOR STUDY (Canadian International Development Agency. Vol A Summary. 1981)

Mlajor Conclusions and Recommendations of the Study

1. The Study has recommended and CIDA has already innitiated a 20 year 45 project Tsh 6,400 million (US$780 M) program to rehabilitate TRC. This project entails replacement of 940 km of Central Line between Dar es Salaam and Kigoma to 80 lb per yard rail and new sleepers. TSh 100 million has been allocated for procurement of addtional spare parts, maintenance materials and supplies. rollowing are the_other major components of the program:

Short Term Investment:

a)- Capital Investment - provision of improved spare parts and main- tenance materials - new empkyee housing, particularly at Moro- goro and Tabora, to accomodate the skilled staff needed to oper- ate the two new shops.

- inpivement in the TRC telecommunications facilities (West Germans are planning to support the TRC in im- proving the telecommunications system) - development of impvoved railway training capacity. Renovation of Tabora school and detailed planning and development of new railway college and staff. - establish mechanized ballast quarry oper- ations, acquire ballast transporting and laying equipment and begin track ballasting program - establish a materials reclamation yard and clean up TRC properties - undertake improvements of existing bridges necessary to ensore safe train operation ( West German Consul- ting Frim has been hired by TRC to study all bridges in Central Mikumi and Mpanda Lines. They have found that 97 of the 137 brid- ges examined have deficiencies ranging from need for strength- ening or repairs through to complete replacement)

- purchase wagon, carriages and locomotives as traffic demand and TRC's capacity to efficiently service and operate warrant.

b) Organization: - make special efforts to fill critical vacant management positions including outside recruitment.

c) Wagon Utilization: - improve productivity of the wagon fleet

- implement an embargo and permit system to enable the traffic function to control the number of loaded wagons being despatched to a location where it is known circum- stances will prevent them being unloaded without unreasonable delay - generally improve Effective planning and control over the wagon fleet to increase utilization and pro- ductivity. 61

d) Training: - Train staff, improve training materials and implement the file training programs recommended.

e) Tariffs: - increase tariffs over the next 5 or 6 years to offset supportable costs and to provide an appropriate return (8%) on investmcnt (based on projecte traffic levels, an increase of approximately 5% plus an allowance for inflation will be re- quired annually until 1986).

f) TAZARA: - TRC should explore the possibility of enter- ing into an agreement with the TAZARA Railway for use of some of their underutilized locomotive and wagon maintenance shop facilities, etc.

Some Interesting Statistics and Observations:

- 33% of the rail dates back over 65 years.

- 3,800 revenue wagons and 116 diesel locomotives of whichare 70% are in good condition or better. As of 1980, the serviceabTe revenue rolling stock fleet wil consist of about 2,900 bogie wagons, 820 two-axle wagons and 163 carriages. There will be 116 diesel electirc and 63 steam locomotives in the motive power fleet.

- In 1979, the actual demand for TRC services was about 1.8 M tonnes and 5.4 million passengers. Of this, the TRC was able to carry only about 850,000 tonnes (47%) and 2.8 millinon passen- gers (52%). The remaining 50% or so of the traffic was forced to the more expensive truck and bus services. This deficiency cost the economy of Tanzania a total of about TSh 220 million (US$31 M). That cost was felt In terms of: - increased consumption of foreign exchange to purchase additional vehicles, spare parts and petroleum - up-country shortages of vital commodities and inputs such as fertilizer - Inceraseed road consturction and mainte- nance costs, - toss of foreign exchange earnings due to decreased esports - Increased costs of transportation to pro- ducers and consumers alike.

- Traffic carrying have been on a steady decline since 1972. In that period total goods traffic has fallen from 1,680,000 tonnes to 850,000 tonnes in 1979, an average decline of aobut 9% per year. Similarly, passenger carryings have declined from 4.2 E in 1972 to 2.8 M in 1978, an average decline of about 7% per year.

- Unlike the majority of African countries, Tanzania does not have an extensive inforral trancportation system based on highway taxis and converted pick-up truck (matatus). 62. 2. Rail Versus Truck Costs:

- Average truck tariffs are considrrably more than crurrent TRC rail tariffs for all distance aboe about 200 km. At the distance of 830 km (TRC's average haul in 1978) truck tarrifs are approxi- mately 2.3 to 5.2 times as high as the TRC's rate for various types of bulk traffic. Assuming a fixed cost component of TSh 80 per tonne for rail and TSh 40 per tonne for truck (in economic terms), rail is substantially less costly to the economy than truck for alldistances above roughly 100 to k50 km.

- COMPARISON OF FREIGHT COST

Roads Average Cost TRC Average Cost

Sealed Roads 63 cents per tone-km Short haul (351 km) 34.2 cents per ton-km Unsealed Road 97 Medium haul (678 km) 25.4 Misc. Roads 142 Long Haul (1250 km) 22.3

- TRC fares are presently too low from a competitive and cost Pdint of view. Assuming that TRC fares are raised by 25% relative to bus fares, the TRC share of the market is expected to decline to about 33% by 1990. Nevertheless, slowly increasing incomes and popula£ion increases are expected to yield a substantial increase in the demand for TRC passenger sertices.

3. Assessment of the TRC Organization and Management

- Serious deficiency of experienced senior and middle level managers. Vacnadies in Assistant Genearl Manager, Chief Supplies Managers, Chie Financial Mlangaers's potitions and 25% vacancy in middle level managers. This deficiency is due to i) low salary, ii). TRC's over-emphasis on academic qualification of its staff, ar.d iii) absolute shor-supply of experienced manpower in this field. Uncertainty surrounding the formal definition of responsibility, duties and delegktion of authority within TRC management.

4. Management of TRC

- Inefficient usage of TRC's resources. In 1979, the average turn around (load to load) time for the approximagely 3,300 poten- tially active wagons was toughly 26 days. These long turn around times are incurred despite the fact that carryings fail far short of demand and that the longest scheduled round trip runding time on the railway is less than 5 days.

- In Sept 1979, about a quarter of the entire wagon fleet was under load and Immobilized. The yards at Kigoma and Mwanza were congested due to the delays in transhhipping the wagons Into the marine carriers. With loaded wagons no longer able to be accepted on yard tracks already filled at Kigoma and M.wanza, loading wago'ns had to be stored at Tabora and other line points, backing up all the way to SDM where they had orginiated. Mfean- while, with so many wagons loaded with goods awaiting trans- shipment to destinations beyond Kigoma and MIwanza, a shortage of empty wagons developed throughout the system. Impotant maize and ferti- 63.

lizer movements on the Tanga Line virtually ceased.

5. Objectives and Leadership:

- The situation has been male more difficult by the shortage of senior staff and by the inexperience of some of the most senior managers in the TRC. They are not only new to thkir TRC jobs, but also new to the railroad industyr and the traditions of service that make it work. - The TRC exhibits a lack of cooridinaiton. Departments and oper- ating components are perceived as being too independent in their activities and their response to overall railway needs and objectives. - The academic qualifications of the group are excellent (senior offieers): 13 have professional degress, 12 more have taken formal academic courses. The major deficiency is the shortage of relevant experience. - The Study Team was impresse with the railway know-how of many of the TRC's experienced operating people. Academic training is important, nevertheless, there is presently a need to inmprove the actual operation of the railway and it pppears that better use could be made of the experienced railway practitioners on TRC staff.

6. Conditions and Description of the Fixed Plant:

Track Structure : - Precise information as to the age of the rail in track is not available; however, it is know that all of the 1,100 km of 60-ppy (pounds per yard) rail was laid between the years 1957 and 1978. The 900 km of 56.12 ppy rail remaining in the Central Line has been there since the time of constuction which means it is now more than 65 years old. Quite properly, the question of wether the 56 ppy rail is still suitable for main line ser- vice is a cause of concern on TRC. (CIDA intends to replace the Central Line rails with a 80 ppy rails). - Although some of the rail is badly curve worn or corrugated much of it is in satisfactory physical condition considering its age. The service failure rate is low. A Computer analysis has shown that although the rail it self is capable of carrying the present maximum TRC axle loads, speeds must be resticted to not more than 35 mph because of the limited strength of the fish plates. - Throughout most of the system the crushed rock ballast section is below standard. Essentially the entire system needs re- ballasting and about 2.5 million cubic yards (approx. 3 million tonne) of crushed rock ballast will be required. - Concrete sAcepers could be adopted as standard on TRC. Assum- ing that they could be manufactured in Tanzania, this would have the major benefit of avdiding a major portion of the foreign exchange expenditures now necessary for the purchase of steel sleepers from overseas. A further benefit would be the more rigid track structure that results from thc sue of concrete sleepers. 64. The concrete sleeper plant in Tanzania built for manufacture of sleepers for the construction of the TAZARA railway is not cur- rently in production. The plant was r.ot turned over to TAZARA upon completion of railway consturction, and owncrship is held jointly by the Governments of Zambia and Tanzaia. It is under- stood that through negotiations with and if successful, Intends that it be operated by the National Development Corporation ( (Tanzania) for the manufacture of precast concrete products, including sleepers. When this might occur could bet be ascer- tained.

7. Telecommunications and Signals:

- Most of the system is outdatcd and inefficient. West Germans are looking into replacing the existing system with a more modern sophisticatied system

8. Bridges: - All bridges on the Central, Mikumi and Mpanda Lines are being investigated by a firm of West German consultants enmplyed by TRC. The initial analysis revealed that 97 of the 137 bridges examined have deficiencies ranging from a need for strengthen- ing or repars through to complete replacement. The West German consultant's estimated total cost for the work is between TSh 200 to'300 million.

9. Locomotives: - the average availability of the TRC diesel fleet in 1979 was only about 60% for road units and 51% for diesel yard switchers. This availability compareds to a level in the order of 85% acheived on many railways. This low availabiity was experienced despite the fact that a large proportion of the fleet is new. As a direct result of poor locomotive availability it is , at times, necessary for the traffic deparment to cancel trains resulting in delay to goods in transit, poor wagon cycles and customer dissatisfaction.

Diesel Ilaintenance and Repair Facilities

TRC's facilites for the maintenance and repair of diesel locomotives are locatdd at Morogoro and DSNI. Ilorogoro Phase I diesel running maintenenace shop was opened in 1974 but not fully equipped with necessary tools and equipment. This shop remians the only modern diesel maintenance.facility on the TRC, but It Is now inadequate to handle the diesel fleet of 120 units.

DSM Workshop, presently being converted to a wagon repair shop, has rela- tively small area for dicsel maintcnancc and is used primarily for units damaged in road accidents. This will change when Mlorogoro Phase I and II attains the operational capacity to handle this work.

Some work is donc on'line at locations like Tabora, Kigoma,. Moshi and Tanga but facilites are minimal and only servicing and minor emergency repairs can be handled. 65.

Planned: A new diesel heavy repari shop is being constucted at Mororgoro Olorogoro Phase II). Construction of a new running maintenance facility at Tabora has been approved and consturction has commenced; however, two years will elapse before this facility will be in production.

TRC is currently considering construcintg a diesel locomotive maintenance facility at Moshi. The sector study team (CIDA) has recommended consturcting the facility in DSM rather than in tloshi. Reasons for their endorsement of DSM: - 50% of all TR1C traffic orginates in DSM - trained staff or candidates for training would be more readily available - spare unit, when requireed would also be readily availalbe. - fully serviced units would be capable of operating through to desti- nation, i.e. Tabora, Kigoma, Mwanza, lfoshi, Arusha or Tanga and return movement to DSM with no delays except for *enrouge fueling and minor servicing at destination. Annex B6 CO#AM1'S.ON OF THr EUAOPEAP4 COMMUNITIES Brussels 19 February 1982

Oa,.sto,atet_enevg for Owelopment VIII/B.1

CO-DONORS' CONFERENCE Brussels, 17-19 February 1982

East African transport systems, Northern and Central Corridors

PRELIMINARY MEETING RECORD

Qualifyina note

This minute is produced so that those taking part may Leave with some agreed and immediate record of the proceedings. Statements were received of express1ons of intent from donor organisations present: the donors' summary below is taken from these statements, and is subject to modifica- tion in the final version of the minute, which will follow as soon as possibLe.

000

The List of participants is attached. All countries or organisations took part in both Northern and Central Corridor meetings, with-the except.ioan-f-Zambia; present for the Central Corridor meeting.

Discussions centred on the List of "priorities in the Northern Corridor" attached, and on the Central Corridor "first priority" list attached. In the context of the latter Corridor, Zaire introduced the problem of Kalemie port and the connected railway Line. As further possible projects, Zambia introduced the Mpulungu-Kasama rail spur, and the need for new supply and rehabilitation of locomotives for the Tazara Line. 67. Track improvement Kampala-Kasene (9300,00O)

though no firm commitment may be made at the moment. Requests for these projects would have to be submitted within the framework of bilateral cooperation. 13. Sweden

The import support funds currently supplied to Kenya could be used for corridor transport equipment, in addition to the 28 rail coaches already supplied. Sweden also gives support to the East African Development Bank.

Whilst having no other retevant funds immediately available, Sweden would exaf projects presented to it for future funding, particularly in co-financing with the CDF, tho Arab Fundz and the World Bank.

0 0 0

ICentrat torridorl

1. Commisnion of thie rrc, rurrpe;3rI Dl'v1.yIr1 mont Fund

The Commission would propose to its authorites the allocation of 20 M ECU from the 5th EDF East Africa regional resources, and 5 M ECU for the port of Kalemie from the Central African resources.

2. nrflaI jm

Belgium is interested in projects in rail-signalling, containerisation equipment, shipyards, rail-ferries, shunting engines and railway wagons, which would be examined on receipt of detailed justified requests,taking into accc its cooperation modalities, the budget available and the assurance of complete f1nancing in the case of major projects.

3. Oermrnr

Denmark is currently considering an aLlocation of S8 M for signalling

equipment on the Tabura-Mwanza railway Line and cement wanors for 14 M. In addition, it would consider requests for signalling and communication eQuipment on the Dar-Tabora line, as well as an expansion of assistance to the Lakes

Victorin and Tanjanyika transport system, covering S2 M spdre parts, ptus technical assis'tance, and training of engineers and navigators and ship maintenance. 4. France France is interested in rail projects in Tanzania and would also be prepared to study requests from Rwanda and Durundi. 68.

5. Germany, F.R.

Germany has an agreed programme already under way in Tanzania, covering bridges (DM 25 M), diesels (DM 24 M), workshops (DM 6 M) and telecommunications from Ki(loma to Tahora (DM 10.5 M). Gevrm.any is also ent'.is-d In E-iprogramme in Kjtemi anid on Zaire railways. The government would be prepared to examine other proposals in the next round of bilateral negotiations.

6. !taty

In re,;po(re, to a specific request from Rwanda, Italy would he prep.ared to recc)mmerid tO Its funding authorities a tied grant up to 4M ECU's worth for thr I,ir,Ily of 40) truck:.

7. The Netherlands

The NetherLands would be prepared to receive proposals for projects within the limits of the uncommitted funds available.

8. The Kuwait Fund

The Kuwait Fund is willing in principLe to study the Bujumbura-Kigomna navigation project, specifically the ferry-boats. Other projects may also be examined, and the Fund will notify the countries concerned of cventual intere.t.

9, BADEA

In continuation of its road programme either approved or under appraisal for Rwanda and 8urundi, the 8ADEA has approved a t8 M loan for a road section b.twpn I.I4.-abIJfi'44 qnti tsaka. FlAr)FA wo I hto lire'prar tr.e{l .z , ,lher ror ljrtz for Cofinancirl 'n1y on the basis of fijit and compLete information files to be submitted by the African countries concerned.

10. The Arab Developmrent Bank and Ninerian Trust Fund

Whereas funds are normally already allocated for 1982-19'P3, Drojects may nevertheless be examined up to a ceiling of tlO M per project for the ADD and 58 M for the ADF. Further complementary financing may be available from the Nigeria Trust Fund. t1 * 1'i¢ w~.r Il9,,,l, 69. 1 fe Ii.sok I i,Ltive itrdevelo)pin' thC higjhways sector in T.iruzania and is examining with the Tanzanian authorities a project to increase Dar port's capacity through the provision of: grain handling and storage oil terminal rehabilitation technical assistance and traininq

- the converslon of berth 9 for container handling

- channel improvements and deepening.

Total cost would be-about S80 M of which the IBRD might supply some S18-20 M; therefore, co-financ.ing of equipment and dredging would be required.

12. AJttr la

In contintwation of its current proqramme, Austria expressef' interest in Central Line rehabilitation including track relaying and ballasting, and would be interested in receiving detailed project proposals, within the frame:- work of bilateral and/or regional cooperation.

13. C4ri..eis

As a continuation& its current (CAN S60 M) rail programme (provision of technical assistance; a diesel workshop; locomotives and rQaling stock; rails and fittings, quarry equipment and management and a sector study). C. will supply CS138 M programme over 5-10 years depending on the TRC's requirements and absorption cenpncity. This wIlt inrutdU,fr toir,'ummujnicait iori^ tre,m Dalr toJ MwaFnea

(.armvJ AIv 31 ?I 6I.f.r 0 t 4 I t.t ( . I. t I(' j Ilr tI n II (. ,n II n Ia W41'j k f,? with the quarry, maintenance equipment for reballasting, staff housing, locomotive overhaul, spare parts and, if required, Locomotives.

1x,. Japa n

Japin preferred to pursue any discussions directly and bilaterally.

15. Sweden

The import support programme for Taniania might be used to supply equipment for use on the Central Corridor, in addition to the 28 wagons already supplied.

Sweden all:o 'Jives support to the r.3:t African D^veltopment IL.snk.

WhIlt P&4vlnej no other re(evant tjrid¶i ImmAdiIntoliy .lV4/it(e weden would ex.nine projects presented to it for future funding, particularly in co-financing with the EDF, the Arab funds and the World Bank. 70/ 15. USA

The USA expressed interest in the Corridors, but is not in a position to shift funding to make a specific commitment to the Corridor systems. 71.

MEETING OF THE MINISTERS OF TRANSPORT OF BURUNDI, UGANDA, RWANDA, ZAIRE AND TANZANIA HELD IN ARUSHA, 16-17.2.1981

t'Irst Pr1crltv.! Central Corridor

\. Dar oo Sa1lam Port 2., Dar es Salaam Xigoma Railwta" lInis 3, Lako Tanganyika Trancport Sy3t&n (Xigcma BDujwumbura, Kala.-nie and Kalundu ports) including 1*sgon Forry and Terminal facilities. .4 Tcbora - loaka Railway; Isalka - Rusuno Road, lcaka Tranait facilitics ar.I road transport eczuipnent. .5, Additional Jagon forry on Lako Victoria 72.

(b) The Tanzania Zambia Railway (Tazara)13/

Building of the Railway

3.63 In September 1967 the Government of the People's Republic of China signed an agreement to provide the Governments of the United Republic of Tanzania and The Republic of Zambia with physical and financial assistance to construct a railway between Tanzania and Zambia. A Tanzania-Zambia Railway Authority was established in 1968 as a joint enter- prise of the two countries for coordinating the construction of the railway and instituting preparations for its management and operations. A Tanzania-Zambia Railway Act was then drafted providing detailed legislation to regulate the management and operations of the railway when it was completed and this Act was passed in both countries in 1974. Building of the railway began in October 1971, and it became fully operational in August 1976.

Purpose

3.64 Several factors gave purpose to the building of this railway. Principal of these was Southern Rhodesia's Unilateral Declaration of Independence in November 1965 and the determination of Presidents Nyrere (Tanzania) and Kaunda (Zambia) to divert as much of Zambia's traffic as possible, both exports and imports, via routes other than Rhodesia and South Africa.i4/ The route of Tazara had been surveyed (in colonial times and again in the early 1960's) as a possible route for copper exports from Zambia and had two additional important benefits as seen by the joint enterprise countries: (i) it would help to open up the productive southwest area of Tanzania and also the sparsely developed northeast area of Zambia (in both of which roads were few and of earth construction only); and (ii) it would provide the shortest land route from the copper belt to the sea -- 1,860 km (1,163 miles) compared to 2,382 km (1,490 miles) for the Benguelo Railway -(both distances to Ndola in Zambia) and much longer still to Mozambique and South African ports.

Engineering

3.65 Basic engineering data on Tazara are presented in Annex A. As indicated in the Annex, the railway was built to good engineering standards. There is, however, a key section of difficulty (which was the subject of prolonged and careful investigation and survey before construction), namely 158 km of almost continuous 2% climb from Mlimba-Makumbako in Tanzania where the railway has to rise out of the Kilombero valley to the highlands

13/ This chapter is based on: (a) discussions with Zambia Railways (ZR) and, less fully, with Tazara during a Bank mission Nov. 16 - Dec. 8, 1981, for Dar es Salaam port improvement project; (b) descriptions and findings contained in Cooper and Lybrand Associates Ltd. "Zambia Coastal Links Transport Study" (1979); and UNCTAD's Report No. RAF/77/017 "Operational Assistance on the Zambia to Dar es Salaam Transit Corridor" (Jan. 1981). 14/ Further action taken to effect this purpose was the building of a pipeline for white oil products from Dar es Salaam to Bwana Mkubwa on the Zambia Railway (completed 1968) and the construction of an all-metal road for heavy vehicular traffic from Lusaka to Dar es Salaam which was a World Bank project (completed 1972). 73. towards Mbeya. This section also has very poor soil conditions which are liable to give trouble when there is unusually heavy rainfall (as in 1979).

Capacity of tne Line

3.66 The operational capacity of the line as built was estimated to be approximately two million tons of freight traffic per annum, one million tons in each direction. The design allows 54 more crossing stations to be uilt and the provision of these, as and when required, together with comparatively low cost signalling improvements and increased locomotive and wagon provision/availability, could improve the capacity of the line to 4-6 million tons of traffic. However, even the figure of two million tons of traffic is ahead of any achievement or need of Tazara for some time to come (see next section).

Traffic

3.67 Zambia's export/import traffic development is presented in the table below. It could be noted, however, that the rail traffic has been declining since 1977. while road traffic has been generally stagtfating.

Zambia's Exports and Imports via Tazara/Tanzania (Tons '000) YEAR RAIL ROAD RAIL & ROAD

Exports Imports Total Exports Imports Total Grand Total

1975 46 69 115 349 311 660 775

1976a/ 349 326 675 323 248 571 1,246

1977 524 413 937 181 156 337 1,274

1978 506 350 856 129 97 226 1,082

1979 230 221 451 164 141 305 756

1980 273 244 517 196 169 365 882

1981S/ 160 122 282 85 74 159 441 a/ Tazara became fully operational August 1976. b/ International traffic only. c/ Six months; international traffic only. 74.

The most freight traffic Tazara has moved to date is approximately 1,100,000 tons in 1977 -- the first full year of operation -- made up of 937,000 tons of Zambia traffic (524,000 tons mineral exports plus 413,000 tons imports) ahd about 200,000 tons of local traffic, mostly in Tanzania. Additionally, Tazara is carrying now approximately 1.3 million passengers a year, about 600,000 within each country, of which less than 1% of all passengers travel from one country to the other.

Passengers Hauled by Tazara (in '000)

1976 1977 1978 1979

619 829 1,134 1,312

3.68 It will also be seen from the figures above that since 1978 there has been a sharp decline in Zambia's export and import traffic via Tazara. Annex A shows that most of this traffic has been diverted to Zimbabwe. There are several reasons for this diversion:

- one is a decline in Tazara's operational performance due largely to serious mainline locomotive deficiencies;

- two is the blocking of the Tazara line in 1979, first for a month in April due to washaways in the critical Mlimba- Makumbako section in Tanzania and then for nearly another three months in November/December of 1979 carrying over into January, 1980, when there was serious main line bridge damage resulting from S. Rhodesia enemy action in Zambia;

- three, Zimbabwe got its Independence in March 1980 and diversion of traffic through a "friendly" country became, politically, much easier; and

- four, there is a basic import traffic from South Africa (mining supplies), and to balance this some Zambian export traffic inevitably transits Zimbabwe.

Operations

3.69 The decline in Tazara's operational performance is discussed comprehensively in UNCTAD's Report No. RAF/77/017 "Operational Assistance on the Zambia to Dar es Salaam Transit Corridor" (Jan. 1981). The report points to weaknesses in almost all areas of operations, but after close technical review comes to the conclusion that "the single most important factor required to improve Tazara transportcapacity" would be (a) the early purchase of 14 x 3,000 h.p. diesel electric locomotives to operate in the section of 2% gradients in Tazara and (b), after their placing in service, a redisposition of the existing 2,000 h.p. diesel hydraulic locomotives to operate on the 1% lines. Support for the technical argu- ments and the urgent operational need is indicated by a mainline locomotive availability figure in 1981 of 20-25%, which means that out of a total fleet of 97 locomotives only 19-24 are available for work at any time (see table at Note 4; the low availability is said to be persistent). 75

3.70 Partly as a bi-product of poor locomotive availability and performance, wagon turnaround time for Tazara wagons on the journey Dar es Salaam--Zambia (Lusaka/Copperbelt)--Dar es Salaam has declinedfrom 33 days in the period 1976-78 to 52 days in the period 1979-80. The possi- bility is that,'in a declining efficiency situation, the turnaround time was even longer in 1981. With a 33 day turnaround time Tazara had ample wagons to move a million tons of traffic in 1977. With a turnaround of 45-60 days, and with wagon availability also decreasing from 90% to a low figure of 75%, Tazara's carrying capacity and ability to earn revenue has been greatly reduced. The following figures, derived from the table in Annex A, indicate the position: 1977 1981 Tazara wagons available (no.) 1,797 1,460

Carrying capacity of fleet (at 35 tons average per wagon) 62,895 51,100

Difference in carrying capacity (tons) -11,795 or -18.75%

Turnaround DSM-Zambia-DSM (Days/journeys p.a.) 33/11 45/8 = -27% 943,000 52/7 = -36% 825,000 60/6 = -45% 707,000

Summated, these figures indicate a reduction in the carrying capacity of Tazara's wagon fleet from 46-64%. The results are threefold: one, an endeavor to correct the position by the use of more ZR wagons to which action, for reasons related to ZR's own needs, there is a limitJ5/; two, a heavy diminuition of traffic due to a shortage of wagons and/or excessive delay in waiting for wagons or in transit; and three, a major diversion of export and import traffic to other routes. More about wagon capacity in Annex B.

Action to Improve Operations

3.71 All parties involved -- the Governments of the partner countries and the management/boards of Tazara and ZR -- are aware generally of the adverse position which has developed, and have been taking, and trying to take, measures to alleviate it. For locomotives, two steps have been taken. One has been to re-engine two of the mainline 2,000 h.p. diesel hydraulic locomotives with compatible FR of Germany MTU diesel electric engines as a first step to prospective further action with some of the rest of the fleet, if successful; the work was completed in 1981 and performance has so far been satisfactory. Two has been to obtain financial aid from FR of Germany to the extent of DM 15 million with which it was hoped to purchase 14 x 3,000 h.p. diesel electric locomotives for use on the critical

15/ ZR have a fleet of 5,500 wagons of which 2,000 have roller bearings and 3,500 friction bearings. Only roller bearing wagons are allowed on TZR. In 1981 700 roller bearing wagons (35% of the fleet) were on TZR, a figure whicl ZR wishes to reduce. 76

2% gradients Mlimba--Makumbako--Chozi. Unfortunately, delay in conaluding the agreementi.6 has led to the loss of a year and the funds now available will cover the cost of only nine locomotives plus 16 engines (3,000 h.p.). Unfortunately, also, it will be 1983 before the locomotives come into service.

3.72 Another cause of concern to the partner states is the "institu- tional" weaknesses of Tazara. Physical shortages and deficiencies are closely linked to the equally important but more intractable problems of operational/management weakness. To correct one and not the other would not be fully useful. Accordingly, the partner states and the Board of Tazara have agreed with the World Bank on an operational and staffing study to assess and make recommendations on the measures possible and appropriate to effect necessary improvements in the operational, management and organizational fields of Tazara as may be identified. It is hoped this study will be completed in FY 1983.

3.73 UNCTAD's report provides a comprehensive list of physical and administrative action necessary to bring Tazara back to the level of its earlier efficiency, or better. In terms of external financing it recommends a program estimated to cost US $63.0 million which includes $25 million for 23 x 3,000 h.p. diesel electric locomotives, inclusive of the nine now being obtained. This item has priority. On the basis of the latest increase in the cost of such locomotives, the total locomotive provision should be $39 million (an increase of 56%). A similar increase for the shole program across the board would bring the cost of external financing to about $107 million. No information was given on further financing being obtained by Tazara for the purposes of this program but assumes such information, together with details of any new administrative/institutional measures, will be available to the forthcoming operational and staffing study consultants. One other matter requiring clafification by the consultants will be the extent and possible duration of technical assistance now being made available to Tazara.

16/ Due to disagreement over disparate financial aid terms as between Zambia and Tanzania. 77 Annex A

Tazara Railway

(Basic Data)

Route Length - 1,860 km (1,163 miles)

Gauge 1,067 (3'6")

Gradients = 1% Dar es Salaam--Mlimba-- 502 km Chozi--Kapiri Mposhi 816 km 1318 km 71% of line

2% Mlimba--Chozi 542 km - 29% of line

Min. Curve Radius = 300 m (except Mlimba--Makambako = 200 m Madambako--Chozi - 250 m)

Weight of Track U 45 kg/m 11 lb/yd)(German DBS 49 and UKBS9OA are comparable) 20 ton axle capacity Rails 12.48 m (40.5'), not welded Sleepers 1.95 m concrete at 1450 per km (2300 per mile) Spring clip fastenings; base plates. Crushed stone ballast, min. depth 0.30 m (10")

Stations - 93 built (54 more can be built)

Maximum distance between stations = 37 km (23 mi.

Signalling & Telecommunications = Tokenless block with color light signalling at main stations, manual semaphore at wayside. Telephone connections all stations to district controls. Direct line HQ Dar es Salaam to HQ Zambia Railways.

Length of x loops - 600 m (1960' max.)

Design speed 90 km/h (55 mph), except 45 km/h over 2% gradient sections

Design axle load = 20 tons

Loading gauge - Permits free movement roller bearing ZR stock TANZANIA - Transport Sector Memorandum Annex A 78 ZAMBIA TRADE ROUTES 0 (000 tons) 1970 1974 1978 1979 1980

Lobito-Zaire 305 947 98 53.3 46.4 (Imports) 0.5 0.5 (Exports) 52.8 45.9

Dar-es-Salaam Road 501 590 226 305.1 365.4 (Imports) 140.8 169.1 (Exports) 164.3 196.3

Dar-es-Salaam Rail 0 0 913 451.5 516.6 (Imports) 221.3 243.7 (Exports) 230.2 272.9

Malawi/M,ozambique 24 135 104 67.3 7.6 (Imports) 51.6 3.2 (Exports) 15.7 4.4

Zimbabwe Road - 74.0

(Imports) - 73.3

(Exports) - 0.7

Zimbabwe Rail 1691 0 136 637.1 637.6 (Imports) 342.7 370.8 (Exports) 294.4 266.8

Air Freight 7 32.3 23.1 (Imports) 8 234 3 52 23.7 19.6 (Exports) ) 8.6 3.5

Other 1.1 (Imports) 1.1

(Exports) - -

TOTAL 2529 1906 1529 1,548.0 1,534.8 (Imports) 781.7 744.3 (Exports) 766.3 790.5

Junc 1981 79

Annex B

Tazara: Capacity to Clear 10,000 Containers per annum

Dar-es-Salaam (DSM) - Zambia - DSM by 1985

1. Tazara has 161 bogie flat wagons of which, according to UNCTAD's report (para. 6.11.2.2), 140 have already been fitted with clamps to carry containers. TZR also has 735 drop-sided bogie open wagons which could be similarly modified. The flat wagons have a carrying capacity of 50 tons so could easily carry two fully loaded containers in both directions, 14 tons per container imports and 20 tons per container exports. The drop-sided wagons have a carrying capacity of 30 tons which would permit fully loaded imports, but would mean a load limitation on mineral exports to 14 tons per container. On the basis of these figures Tazara's wagon capacity suitable for containers could possibly be:

No. of| Type |Length|Capacity|Suita-| Present Present Poss. Poss.

Wagons|(all bogies)| (ft) I (tons) |bilitylavailable|available|available|available|

I I I I | | % No. % | No. l llII I I I I. I I 1140 flat |45' 50 jadapt.| 75 | 105 | 90 | 126 |

735 drop-sided |to| 551 |661

be | l

| (194)1 open |45' | 30 jadapt.1 75 | (145)1 90 | (174)| I I 1 1- 1 I I I 1875 I l l 1656 1 j787 I I I I I I .1 2 1 1 1 I34) l Il I I (250)1 I (300)1 l l l l l l l l 80

The percentage of drop-sided bogies to be made available would be a ques- tion for decision in relation to other priorities. The figures shown in parentheses () assume that about 25% of wagons might be allocated/adapted; and these figures are used in the calculation in paragraphs 2 and 3.

2. ZR might be assumed to make a reasonable contribution to the wagons to be used for their container traffic. (Mr. Masthagen might make some preliminary inquiries about ZR thinking when he is in Zambia next month). For practical purposes at this stage we might use ZR figures of 30-50% of the TZR numbers. In this case the wagons available from TZR and ZR would be

Total Available at 90% TZR 334 - 300 ZR at 30% 100 = 90

ZR at 50%= 167 - 150 Totals: 434-501 390-450

3. Wagon fleet performance then becomes a function of turnaround, and the following figures indicate the possibilities:

Containers Days Journeys Journeys x Wagons x Containers per Wagon turnaround per annum at 390 at 450

20 (UNCTAD: best case para 6.11.2.4) 18 14,040 16,200

26 (UNCTAD adjusted by self 14 10,920 12,600

30 (UNCTAD normal) 12 9,360 10,800

33 (TZR/ZR in 1976/77) 11 8,580 9,900

40 ( " in 1979) 9 7,020 8,100

45 ( " in 1980) 8 6,240 7,200

60 ( worst case) 6 4,680 5,400

4. It will be necessary, as appropriate, to check well in advance with TZR and ZR that container wagons, or adapted wagons, to the numbers required - taking into account best current estimates of availability and turnaround - will be made available to meet accepted forecasts of traffic. Adaptation of wagons - pulling wagons out of traffic and fitting in to normal maintenance etc. programs - might, at a guest, take 12 to 18 months. 81

5. The number of train journeys required to clear 10,000 containers will depend on the locomotive policy prevailing at the time; that in turn will depend on the speed and coverage provided by policies now in hand (a) to purchase new 3000 h.p. diesel electric locomotives from West Germany and (b) to re-engine some of the existing fleet of 97 x 2000 h.p. diesel hydraulic locomotives. Assuming (i) that the present hauling restriction of 1,000 tons per train will be raised by 1983/84 to 1,500 tons, (ii) that a wagon turnaround averaging 30 days in being achieved, and (iii) that the DSM to Zambia direction is critical which means an average total weight per wagon of some 49 tons (17 tare and 28 load and 4 containers), the average of the following position would apply:

(a) 390 wagons x 12 journeys a year - 156 journeys per annum 30 wagons per train

(b) 450 wagons x 12 journeys a year = 180 journeys per annum 30 wagons per train or roughly the equivalent of one unit train every second day.

6. The length of trains would be 30 wagons x 45' - 1350'. Brakevan 40' and locomotive(s) would be extra. Tazara loops provide 1,960' clearance, so these create no difficulty. So far as the container terminal is concerned, I think that the placing and clearing of wagons should be done, in a minimal number of movements, by Tazara shunting locomotives and final assembling (adding the locos, brakevans, checking couplings and brakes, etc.) should be done by TZR at Yombo (some 3 km from the Port). ZAMBIA'S EXPORTS AND IMPORTS BY MAJOR ROUTEES1 / - ('000

TANZANIA (TAZARA) ZIMBABWE2 = ZAIRE/ANGOLA

YEAR RAIL ROAD RAIL/ROAD -Exports Imports Total Exports Imports Total Exports Imports Total Exports Imports Total Gr. Total

1975 46 69 115 349 311 660 775 _ _ - 309 257 5663/

1976 349 326 6754/ 323 248 571 1,246 - _ - 131 4 135

1977 524 413 9375/ 181 156 337 1,274 _ _ _ 131 1 132

1978 506 350 856 129 97 226 1,082 52 84 136 97 _ 97

1979 230 221 4516/ 164 141 305 756 294 343 637 52 _ 52

19807/ 300 280 5808/ 180 170 350 930 400 360 760 40 _ 40

19817/ 300 300 600 230 170 400 1,000 N.A. N.A. N.A. N.A. N.A. N.A.

The figures for 1979, 1980 reflect (a) serious blockage of Tazara in 1979 by washaways in Tanzania and destruction of bridges by enemy action in Zambia and (b) a serious decline in locomotive and operational efficiency in Tazara (which has continued thru' 1981). The diversion of traffic via Zimbabwe - which did not get its Independence until March 1980, and through which no Zambia traffic was passing prior to 1978-was a direct outcome of the continuing difficulties via Tazara. 1/ Other routes (via Malawi and Botswana railways and via air transport) carry comparatively small tonnages. 2/ To and from Mozambique and/or South Africa ports. 3/ Outbreak of Angolan civil war. 4/ Tazara handed over for full operation in August 1976. 5/ First full year of Tazara operation. 6/ Loss of one month's operation (April/May) due to closure of line by severe washaways and 2½ months (Oct., Nov., Dec.). 7/ Estimates only. 8/ Loss of 1 month (January) due to continuation of bridge damage in Zambia. co t3 83

TAZARA RAILWAY (Operating data)

1976/77 position 1981 (Nov) position

Locomotives (all diesel hydraulic)i/ 97 (12 more acquired Mainline 85 x 2000 h.b. 1979)

17 x 1250 h.p. 17

Mainline availability 75-80% (assumed 20-25% (actual = 64 - 68 locos.) 19-24 locos)

Wagons (all roller bearing axles)1 /

No. in flat 2,100

Effective for traffic 1,9972/ 19473/

Availability of effective wagons 90% (assumed) - 1797 75% (actual) = 1460

Interchange working TZR/ZR TZR on ZR at any one time 600 N.A. ZR on TZR at any one time 300 700

Wagon turnaround

DSM - Copperbelt - DSM Day: 30 (estimated) Days: 45-60 (actual) 33 (actual)

Traffic

Estimated capacity of line as new 2.0 million kms (1.Om in each dir.) Achievement 1.1 m tons (in 1977 best year) 0.7 m tons (estim.)4 /

1/ TZR has spacious well-equipped workshops to overhaul both diesel engines and rolling stock at DSM and Mpaka. 2/ Equals 2100 fleet minues 83 brakevans and 20 ballast wagons. 3/ As in note 2 but minus 50 wagons written off in accidents. 4/ Estimatee of 0.7 m tons made up of 300,000 tons exports + 300,000 imports and 100,000 kms iocal traffic. 84

FREIGHT ROLLING STOCK

Upon commencing operations, TAZARA had a total wagon fleet of 2,100 made up as shown below.

Capacity (kms) Wagon Types No of limits Wagon Fleet

Covered wagons 523 30 15,690

High Sided Opens 399 50 19,950

Low Sided Opens 735 30 22,050

Flats 161 50 8,050

Tanks 126 31 3,906

Livestock 30 15 450

Refrigerator 21 25 525

Well 2 90 180

1,997 35.45 70,801

Ballast- 20 50

Brakevans 83 -

103

Total 2,100

Note: The average tax weight of the general freight wagons is about 17 tons. Length of bogie wagons is 13 m (45').

Source: Cooper & Lybrand/Tazara Railways. 85

4. PORTS AND SHIPPING

4.1 The principal Indian Ocean ports of Dar es Salaam, Tanga and Mtwara (Zanzibar port not included) are organized under the Tanzania Har- bours Authority (THA) created in 1977 to take over operation of ports from the defunct East African Harbours Corporation. Dar es Salaam, with 11 alongside general cargo berths for ocean-going ships, handles nearly 4 million tons of traffic annually or about 90% of the total for the 3 ports. Tanga has no deep-water berths and requires use of lighterage faci- lities. Mtwara has two deep-water berths. Nearly half of the tonnage through the Dar es Salaam Port is Zambian traffic. Recent studies of the Tanzanian ports have concluded that fairly sizeable investments for expan- sion of facilities and improvement of the entrance channel are needed for the Dar es Salaam port.

The Port of Dar es Salaam

A. Port Facilities

4.2 Dar es Salaam is Tanzania's principal sea port, Tanga and Mtwara being the others. Dar es Salaam handles over 80% of the general cargo im- ports and export traffic of Tanzania and nearly all of its petroleum im- ports and exports. It is located in a natural harbor on the East African seaboard of the Indian Ocean. Dar es Salaam has traditionally handled transit traffic for the eastern part of Zaire, and the land-locked coun- tries of Burundi and Rwanda. In recent years it has also become a major avenue for Zambia's seaborne imports and exports, particularly since the opening of Tanzania Zambia Railway (TAZARA) in 1975.

4.3 - The harbor is rather narrow with limited ship maneuvering room. The entrance channel is a natural water fairway, some 3.5 km in length dredged originally in 1953 to provide a minimum water depth of 7.6 m at low water. The tidal range is almost always at least 2 meters and on two days out of three, 3 meters, enabling all but the largest ships to enter on high tide. The tidal variation is semi-diurnal. The maximum spring tidal range is about 4.2 m and the minimum is about 0.5 m. The present alignment con- tains three bends in the configuration of an "S" curve. These bends im- pose severe restrictions on ship movements in and out of the inner harbor. Due to the bends and lack of right navigation aids, night entrance or de- parture is not possible with large ships, or even common with smaller ocean going vessels. The outer anchorage is suitable for a large number of ves- sels in water depths of 14-16m; it is well sheltered during the SE monsoon, but during the NE monsoon a considerable swell sets in.

4.4 The main cargo handling facilities (see map) are situated on the west side of the harbor, consisting of 11 general cargo alongside berths with a total length of 2,013 m, plus a lighterage wharf of 600m in poor condition, now rarely used. There are 8 stream berths for deep sea vessels within the inner harbor for working of ships to lighters. There is an oil jetty in the inner harbor adjacent to and south of the general cargo 86

berths; (constructed in 1958); and a single buoy mooring terminal at Mjimwema Bay outside the harbor (constructed in 1973). Until 1956, lighterage was the only means of working deep-sea ships at Dar es Salaam. Berths 1 to 3 were commissioned in 1956; berths 4 to 8 were phased into service between 1970 and 1974; and berths 9 to 11 were completed in 1977. All general cargo berths are served by travelling electric level luffing portal cranes (5-7 tons) with an average of 3 cranes per berth for the 11 berths. The lighterage wharf is served by 3 ton portal cranes and 5 ton mobile cranes. The stacking areas behind the general cargo berths are equipped with travelling electric luffing portal cranes (one ST, two 7T, two lOT, and two 20T). Many of these cranes are out of service for consi- derable periods due to shortages of spare parts and lack of maintenance.

Berths No. Length (m) Dredged Depth (m) Transit Sheds (m2)

1 183 9.8 11,706 2 183 9.8 ) 3 183 9.8 ) 16,898 4 183 10.0 ) 7,800 5 183 10.0 7,800 6 183 10.0 7,800 7 183 12.0 ) 8 183 12.0 ) 15,640 9 183 12.0 10 183 12.0 ) 11 183 12.0 ) 15,640

Oil jetty 175 10.7

4.5 Cargo handling in Dar es Salaam is moderately labor intensive even though a normal range of mobile cargo handling equipment is in use, including forklifts, mobile cranes, tractors and trailers.

4.6 Ancillary facilities at Dar es Salaam include an oil refinery with a capacity of about 0.8 million ton per year; and a dockyard south of the oil jetty for servicing the fleet of lighters, small boats, and lighter tugs (it cannot handle harbor tugs which are serviced in Mombasa, Kenya.

4.7 Dar es Salaam Port is served by both rail and highway. General cargo berths 1-8 are served by the Tanzania Railway while TAZARA serves berths 6-11. Unfortunately the two rail systems have different guages and are not interconnected. The general layout of the general cargo area is on the traditional lines of a rail served port, with tracks serving the aprons, sheds, and storage areas. In keeping with trends elsewhere the movement of goods into and out of the port by trucks is growing. Currently road traffic uses five gates, circulation is poor, and truck traffic is congested. Until recently almost all of it had to pass through the con- stricted streets of Dar es Salaam. However a port access road has recently been opened which has partly relieved this. 87

4.8 The Port of Dar es Salaam has few facilities for handling special commodities. None of the berths, which forms two linear entities from berths 1 to 4 (732 m) and 5 thus 11 (1281 m) one designated as container berths. However, the rapidly growing container traffic 9so traffic below) is handled at berth 9, which has not transit shed and thus affords unimped- ed access to a container stacking area. Molasses and edible oils are handled over berth 11 through embedded pipelines. Bulk grain is handled over general cargo berths, using Vacuators into hoppers from whence it is trucked to either the Tanzania National Milling Corporation (NMC) silo, or to the TAZARA rail depot for onward shipment, usually after bagging. There are no special facilities for the growing container traffic, containers being handled over all berths. Recently containers in transit have been segregated into two areas for better management, however they continue to be loaded and offloaded from ships at all berths. This contributes to traffic disruption as well as congestion.

B. Organization, Management and Staff

4.9 The Port of Dar es Salaam was formerly one of the two principal ports (the other being Mombasa) of the East African Harbors Corporation (EAHC). Upon the collapse of the EAHC in early 1977, which was one of the principal cooperative statutory institutions of the East African Community, the Tanzania Harbors Authority (THA) was created by legislation (in July 1977) to establish, administer and operate a system of harbors to serve the needs of Tanzania. Dar es Salaam is the major port within the THA. THA is headed by a full-time Chairman and a Board of Directors, all appointed by the President, whose duty it is to "carry out the functions and manage the business and affairs of the Authority". The chief executive (operating) officer of the Authority, who is also a member of the Board, is the General Manager. The Minister of Transport is responsible for the "general direction,and control of the Authority". A principal subordinate element of the THA is the Port of Dar es Salaam, headed by the Port Manager. The port management organization is composed of two principal operating elements, (operations and services) each headed by an assistant manager. Under operations are included the operations manager, commercial manager, harbor master, and port engineer; under services are included managers for supplies, finance and personnel, and a medical officer.

4.10 Formerly, under the EAHC, all port labor was employed by the East African Cargo Handling Services (EACHSER), the cargo handling subsidiary of EAHC. EACHSER maintained separate offices, and was responsible for all stevedoring, transit shed and stacking yard management, shore handling and acceptance and delivery of cargoes. EACHSER also had various workshops for manufacture and repair of pallets and miscellaneous gear and maintenance, and repair workshops for mobile cargo handling equipment (e.g. tractors, forklifts, and cranes). With the break-up of the EAHC, cargo handling services remained a separate organization until July 1978, when it was assimilated into THA, and its components assigned to the various ports, principally Dar es Salaam. During the transition period from 1976 to 1978 there were some industrial relations problems arising from a lack of clear authority lines. Operational responsiveness has improved since the 1978 consolidation, although some vestiges of the former arrangement remain, e.g. mobile cargo handling equipment maintenance is still partially separated. 88

4.11 The Dar es Salaam port employs on the order of 6,000 workers of whom some 2,000 are involved in cargo handling and stevedoring, while the balance provide other basic services. Several thousand more workers are employed outside the port area in related activities - warehousing, trans- port, shipping, etc. Customs, immigration, and port security services are provided by relevant Government agencies. The Port of Dar es Salaam is a principal employer of the city.

C. Operations

4.12 Until 1956 Dar es Salaam was a lighterage port. In that year three berths were completed, with eight others added between 1956 and 1977. In 1958 an oil jetty within the harbor was commissioned, and in 1973 a single buoy mooring facility was added outside the harbor. Traffic con- sists of vessels covering a spectrum from dhows to coasters to modern frei- ghters and tankers. An increasing number of RORO ships, mainly from the Mediterranean, are calling, but fully cellular ships have not yet appeared and a large proportion of containers shall arrive as deck cargo. Dry bulk traffic is limited to grain. The port is a traditional rail served facili- ty, however trucks are playing an ever increasing role in transport to and from the port. Break-bulk cargo is handled conventionally with a combina- tion of ships gear, quay cranes, tractors, trailers, forklifts and yard cranes. Availability of this equipment is at an insufficient level due to inadequate maintenance practices. Stevedores lack adequate handling equipment gear for use aboard ships, and there is a shortage of properly trained supervisors.

4.13 Handling rates for general cargo are generally low. From 1974 to 1976 there was a continuing improvement in tons handled per gang shift (general cargo) from 61 to 69. In 1977 and 1978 however these rates fell to 55 and 48 respectively with recovery to an estimated 62 in 1981. The decrease and recovery in rates can be attributed in great part to conges- tion in the port, and subsequent traffic reduction which is a reflection in part of limitations in offtake capability by rail and trucks from the port, particularly but not exclusively to Zambia. In anticipation of the availability of the Tazara railroad in 1979 the operations of the Zambia Tanzania Trucking Services (ZTRS) were phased down in terms of maintenance, vehicle replacement, and contract truck augmentation only to be subsequent- ly expanded as Tazara failed to live up to expectations. There is current- ly talk of running down the service again due to low demand.

4.14 The chronic congestion in the Port of Dar es Salaam, while basic- ally a result of low offtake rates, was also contributed to by various practices and deficiencies in port operations. Documentation of cargo is slower than need be, resulting in delays in clearance. Severely damaged and unclaimed cargo is not removed from the port area on a timely and sys- tematic basis, thus contributing to clutter, disruption of orderly internal traffic, and the excessive usage of transit areas, both open and covered, for storage. 89

4.15 Copper, a principal export from Dar es Salaam, comprising on the order of 500 to 600,000 tons per year, is handled on a specialized basis by a Zambia Government agency, the Copper Industry Service Bureau (CISB). Upon receipt Copper is cleaned, banded, marked, and stacked into lots for shipment. CISB, utilizing its own equipment (tractors and trailers) moves the lots to the appropriate berth for export. In late 1979 the CISB depot was relocated to a new TAZARA depot area immediately adjacent to and south of the port area. (In the old CISB depot, copper arriving by TAZARA had to be offloaded in the vicinity of berth nine and handled to the CISB depot by tractor/trailer). Copper shipments are usually handled in lots of 5,000 to 12,000 tons at an average gang shift rate of approximately 106 tons. This rate could be improved if the banded (unitised) units were increased from the present 1.5 tons size now utilized.

4.16 There are currently no specialized facilities at Dar es Salaam for the handling of bulk grain. Grain ships are berthed at any of several general cargo berths, where they are unloaded by vacuators into small quay- side hoppers. The hoppers are utilized to load trucks for transport: (i) of Tanzanian imports to a National Milling Corporation (NMC) silo just out- side the port area where the grain is bagged for subsequent shipment by truck or rail to Zambia. Only on special occasions is grain for Zambia carried in bulk in rail cars, although the receiving facilities in Zambia can accomodate bulk delivery. Losses of grain are high in this system, and ship unloading rates are low - varying from 500 to 1,000 tons per day depending on weather, and availability of trucks and vacuators. When both Zambian and Tanzanian imports must be handled concurrently, the cargoes must share an insufficient quantity of available equipment.

4.17 The port operates throughout the year, seven days a week, with three shifts per day except on Saturdays when only two shifts are worked. Sunday through Friday shift hours are: first, from 0700 to 1500 hours; second, from 1500 to 2200 hours; third, from 2200 to 0700 hours. Saturday shift hours are: first, from 0700 to 1230 hours and second, from 1230 to 1500 hours. During January - July 1978 the average number of gangs employ- ed per shift were: first, 47.3; second, 46.8; and third, 36.5.

4.18 Zaire, Burundi, and Rwanda traffic is handled through a conces- sion area at berth 1 by the Agence Maritime International (AMI). Original- ly this berth was financed and owned by the Belgian Government. Ownership of the facilities has reverted to Tanzania, however the concession modus operandi continues with AMI acting as agents of the Tanzanian Government for this traffic.

D. Traffic

4.19 The traffic in the port has been declining, from 4.48 million tons in 1977 to 3.49 million tons in 1981 (see tables attached). General cargo exports are dominated by copper from Zambia and agricultural products from Tanzania. General cargo imports for Zambia have constituted about half of all such imports through Dar es Salaam 1975: 52%; 1977: 48%; 1980: 90

48%). The overall decline in the traffic came due to the decreased capabi- lity of the Tazara railway and decreased economic activity in Tanzania. Transport problems on the Tanzania Railways (TRC) serving Zaire, Rwanda and Burundi (through the lake ports) have had a lesser impact on this traffic. Petroleum traffic consists principally of two parts; imports of crude to Tanzania for refining for local consumption with some reexport, principally within Tanzania; and imports for transmission by pipeline to Zambia for re- fining at Ndola.

4.20 In parallel with the decline in traffic the number of dry cargo ships has declined from 816 in 1977 to 627 in 1980. This decline has been accompanied by increased throughput per ship to a very limited degree (average tons per ship up 5% in 1980 compared with 1977), and between 1976 and 1979 tons per gang shift continued to decline (see Table attached). A recovery in productivity occurred in 1980 and appears to have continued in 1981. This is almost certainly due to the combination of increased con- tainerization and reduced congestion (the latter partly a function of the former). Assuming appropriate and timely investment is undertaken to handle increased container traffic, which could easily reach 500,000 tons by 1985, this productivity increase can be expected to continue.

4.21 The pattern of ship waiting time has varied considerably over the past five years:

1977 1978 1979 1980 1981l- (Est.) Average days/ships 2.0 5.7 1.7 2.3 0.4 Ship service times have varied also over these same five years: 1977 1978 1979 1980 1981. (Est.) Average days/ships 6.7 8.0 6.66 6.v9 6.2

E. Port Planning

4.22 THA has limited capacity to undertake medium or long term port planning. Its engineering department has few qualified personnel, and no one in the organization has a close and continuing knowledge of the dynamics of port development. This is particularly indicated by the continuing pre-occupation with retaining and even expanding capacity to store break-bulk general cargo. This is despite the low utilization of existing transit sheds, brought about by the combination of decreased traffic and increased containerization (which avoids the need for transit sheds). Any revival in total traffic volume is likely to be fully offset by the effect of containerization and thus there is a prima facie case for the view that in the long term several of the transit sheds could be removed, and the space released employed more productivity. Nevertheless in the medium term, the phasing out of general cargo operations, and the phasing in of container, will require careful handling, with close monitoring of the parameters involved (such as container size, tonnage per container, distribution between those consigned directly to the receiver and those unpacked in the port, etc). 91

4.23 THA presently rely heavily on consultants to undertake their port planning. This has worked quite well in the past, as the consultants have the expertise to plan and follow up on the execution of projects. However, the lack of in-house expertise does lead to confusion from time to time, especially when complicated assessments such as the trade-off between construction of new facilities and the rehabilitation of existing ones, have to be undertaken.

4.24 At the heart of the matter is a need to improve training within THA at all levels and in the various disciplines. This issue will be addressed under the proposed port project.

Shipping

4.25 The Tanzania Coastal Shipping Line Ltd. (TCSL), established in 1971, is a parastatal corporation with a monopoly of carrying freight and passengers between various coastal and island ports south of Dar es Salaam. Traffic between Dar es Salaam, Mtwara and Lindi is highly seasonal with heavy traffic in the rainy season when alternative road transport is unreliable, circuitous and costly. Until an improved coastal road the TCSL will play an important role in transport to and from southeastern Tanzania. TCSL Fleet and Freight transported (140,000 tons in 1980) are presented in attached Table 4.5.

4.26 Some transport services are also provided on Lake Victoria and Lake Tanganyika. The principal ports on Lake Victoria are Mwanza, Bukoba and Musoma. On Lake Tanganyika, Burundi-owned ships transport cargo between Bujumbura and Kigoma, the western terminus of TRC. That is explained in the Chapter dealing with TRC [3(a)].

4.27 Tanzanian overseas and international shipping were handled by the Eastern Africa National Shipping Line, until the line's demise in 1977. Since then there have been moves to establish a Tanzanian National Line, but the general economic situation in Tanzania has not enabled this to materialize. Although there is generally a competition between shipping lines and "tramp" operators for East African trade, there are indications that Tanzania is overcharged for shipping services.

Pipeline

4.28 A pipeline financed by the Italian bilateral aid and operated by the Tan-Zam Oil Pipeline Company was completed in 1968 from Dar es Salaam to Ndola in Zambia. Initially, the 1,705 km line of 20.3 cm pipe princi- pally carried gasoline to Zambia, but following construction of a refinery at Ndola, the line transports crude oil. Design capacity exceeds 700,000 tons p.a., and traffic flow has generally been at about that level. TANZANIA - Transport Sector Memorandum TOTAL TRAFFIC Tal 4 .1 DEALT WITH AT DAR ES SALAAMI PoRT It,i nIA MRY TaDiM11mr 4

Y E A R 1975 1976 1977 1978 1979 1980 19c1* T'I1 CF C0G0.

DF.Y G.:zR;-L rAtGo f IIjF CBTS 736,544 439,016 559,788 .697,632 392,758 655,081 669,000 ExrTc?s 251,134 306,920 252,141 221,025 25S,727 222,473 23C,oeo TRAh'3IT (TO ZA;BIA & ZBRs' 929,779 1,438,5°6 1,535,582 1,201,901 1,C230307 981,760 823,000 1,917,457 2,184,522 2,347,511 2,120,553 1,674,792 1,J59,314 1,742,CG00

BULK CILS

iCo T5 g ,o19,047922,632 1,077,925 1,069,929 825,323 935,190 9C0,000 E:UXCRTS 196,o40 249,284 216,695 134,953 124,402 169,617 8;,ooo T.rU::SIT (TO ZAIM.A) 852,500 895,199 813,832 788,181 711,479 762,848 750,000 TCTAL 1,967,667 2,067,115 2,108,452 1,993,063 1,661,204 1,837,655 1,739,CCo

G ,',, 3t1,?,C ,2,,0

I;:PcB .s (cD ;-;iT/T.oLC") 3,000 - - 702 1,537 E;-CRTS (HOLASSS) - 10,344 19,608 28,173 27,261 26,861 8,CCo TRL'SIT (EB/IBLZ CILS TO Z- BL) _ 3,222 2,496 3,976 5,611 4,ceo 4,coc TCTAL 3,000 13,566 22,104 32,149 33,574 32,448 12,000

TCT.;L A:L CA:.SC

Il.CRTS 1,658,591 1,361,643 1,637,713 1,767,561 1,218,7°3 1,591,058 1,569,oeo El CRTS 447,174 566,548 488,4h4 334,151 410,390 418,951 347,Coo TRU.;SIT (TO ZA:31A & ZBR) 1,702,359 2,337,007 2,351,910 1,994,050 1,7110,397 1,74',6Cc8 1,577,00o TC,/,L 1 3,888,124 4,265,203 11,473,067 4,145.770 3.,G9.570 3.759.417 .43.nxlo

* ES7TIM;A T UP TO Dr.EF;BER, 1931 Sources T'anzania Harboura £.hority + II:CLUSIVE OF TRAEPS::;4: EIITF PL/3/1/C8 DATEs 16T' IICV"4BMER, 1931 TANZANIA - Transport Sector Memorandum Table 4.1 TOTAL TRAFFIC D;LT till'H AT TAI:GA PORT (It DA, V TRIC TO?IESI

T I A R 1975 1976 1977 1978 1979 1980 ig51.

T7Pi 0 CA....O

DRY G::,-AM C:ftC+ II'rc2Ts 141,124 88,704 ilo,6ta IC4,5Si 112,654 146,651 12 6 .CcO EZtCrTS 161,729 175,090 138,679 166,410 191,731 144,239 152,CCO TRAI:SI7 ------TC T;L 302,853. 263,794 249,361 33059 °91 304,385 290,890 .278,CCD

3tUlt C;LS:

I::i;.TS 25,869 22,919 24,018 25,603 22,304 22,655 19,OCO EX;t TS _ _

TRANZ'-IT _ TOTL 25,869 22,919. 24,018 25,608 22,3C4 22,655 19,0CO

Cr!-~ ?rir CA250 IB:rC:TS (F2M LI.:- IR-PyTS) 51,317 6405i3 50,770 33,556 27,108 71,795 66,oco M1a CRTS - ______

''.. C^ _- _ _ _ _- T(.TAL 51,317 64,5i3 50,770 38,556 27,103 71,795 66CCO

XTC~A ALL Cl%n3

II PCPsS 218,310 176,136 185,470 223,745 162,o66 241,101 211,ceo EiXFCRTS 161,729 175,090 138,679 166,410 191,731 144,239 152,00e T:!AXSIT - - _ _ _ _ _ TOTAL 380,039 351,226 324,149 395,155 353,797 385,340 363,COO

* 5TII.LTED UP TO DEC1.;BERN 1981 Source Tanzania Uarboura Authority

* I2CLUSIVF OF TRANS11IFl5EN5S. REP: WL/3/1/C9 Datos 16tjL Uovemcber, 191S Table 4..L TANZAIIA - Transport Sector Memorandum TCTAL TRAFFIC W1.7.CUGII t:r7ArA PrRA (it! VIY.Fnic cten'us)

S _: A R * A 1975 1976 1977 1978 1979 1980 1981 T":rZ CF CA.::GC

i48,749 61,642 58,385 42,4Go 35,830 59,133 55,C.0 CcO z~;:,c ao s 101,599 80,355 85,243 106,o044 65,776 37,722 2e

83,Cco X-l:a 10io348 141 ,997 143,628 i48,5c4 101,6C6 96,855

"riit OILS. 9,523 20,587 25,Coo 1::; C .3*8,235 24,388 21,429 17,335 EXC'T5 _- - _ _ _ _

25,OC0 _ TCTAL 18,235 24,388 21,Z-29 17,385 9,523 20,587

_ _ :L.C.:;' (CZ.:ZT) 5,310 _ _ _ _ z:;rL23 ______-?M,:.'EIT _ _ _ _ _ TC.L 5,310 _

TCAtL"L CARGO 79,720 8c,ozC !.F( ZTS 72,294 86,030 79,814 59,845 45,353 37,722 23,CCo Z:'l ORTS 101,599 80,355 85,243 106,044 65,776 - - - -_ T2.,IT - - 111,129 117,442 108,O00 TC rkL 173,893 166,385 1659057 165,885

* ZST.:I:A rrt TO D'.C;:LZR, 1981

SC I?CE: TA:.:.::I 'A R_CtRS ATH ORITY REFs PL/3/i/ E4 DATEs 1Gtil tlOtt3ER, 1981 TANZANIA - Transport Sector Memorandum Table 4.2

Dar es Salaam Port

1. Overall Port Performance 1976-1981

Total Dry Cargo Dry Cargo Handled ('000 tons): Waiting Time (Days) CGngs Tons Cang 2 ('000 tons) In Stream Main Quays At Convenience oft Employed Shift Berth Port Oun Occupancy

4976 2,181 ...... 31,542 69 1977 2,347 497 1,849 1,613 506 43,526 54 1978 2,120 395 1,724 3,903 1,206 43,942 48 .100 1979 1,674 154 1,520 1,054 305 34,502 49 100 1980 1,861 126 1,735 1,426 260 33,994 55 99.8 1981 (1) 1,747 84 1,664 215 125 28,203 62 90

Source: TIA

2. Ship Waiting Days and Working Days

Deep Sea Waiting Time(Days) Working Days per Ship Ratio Port Reasons Dry Cargo Ships Days Waitlng Working Working Days

1977 816 1,613 5,494 2.0 6.7 0 : 29 1978 686 3,903 5,466 5.7 8.0 0 : 71 1979 631 1,054 4,175 '1.7 6.6 0 : 25 1980 627 1,426 4,295 2.3 6.9 0 : 33 1981 (1) 579 215 3,610 0.4 6.2 0 : 06

Source: ThA

(1) Projected on basis of first 7 months

qn TANZANIA - Transport Sector Memorandur Table 4.3 96

Dar es Salaam Port

3. Tons per Ship Day Alongside

Year Tons handled Z at Main Quay berthocur tons (000) occupancy alongside

1977 1849 100 460

1978 1724 100 430

1979. 1520 100 378

1980 1735 99.8 433

1981 1664 90 460

Source: THA, Dar es Salaam, December 1981. Table 4.4

TANZANIA - Transport Sector Memorandum 97 Dar es Salaam Port

1. Container Movemcnts 1979-1981 (2)

inwards outwards total

1979 3,394 1,849 5,243 1980 4,738 3,406 8,144 1981 (1) 9,132 7,608 16,740

Notes: (1) project on first 10 months Source: 1979/80 MP (1981) (2) total movements, full & empties 1981 : THA

2. Container Weights Tmports Exports Tanzania Zamb6ia ZBR port to port empty full empty

weight incl. 10.9 12.1 10.9 10.3 2.1 10.4 2.2 container

Source: Monthly Summary of Containers May - Oct. 1981 Table 4.5 98

TANZANIA

TRANSPORT SECTOR MEMORANDUM

The Fleet of Tanzania Coastal Shipping Line Ltd

NAME GROSS NET DEAD OF YEAR BUILT REGISTERED REGISTERED WEIGHT SiEED VESSEL TONS TONS TONS

M/S"MTWARA" 1972 639 392 689 12

M/V"LINDI" 1974 855 461 574 8.5

M/VMWENGE" 1970 1037 558 2240 12.5

Freight transported (in tons per year) by the Company

1975 118,609 1978 125,948 1976 137,400 1979 171,988 1977 133,408 1980 141,072

Source: THA, Dar es Salaam, December 1981. 99

5. CIVIL AVIATION

5.1 Tanzania has two international airports (Dar es Salaam and Kili- manjaro) and about 50 airfields of which six are paved. The international airports are served by nineteen foreign air carriers17/ and by Tanzania's own airline, Air Tanzania Corporation.

5.2 Air Tanzania Corporation (ATC), established in February 1977 after the dissolution of the East Africa Community, is the only Tanzanian airline offering domestic and international airline service. The Ministry of Communications and Transport (MCT) is responsible for planning, managing and operating the airline. The Department of Civil Aviation, part of MCT, is repsonsible for air traffic safety regulations, communications services, and navigation assistance and serves as the regulatory agency for civil aviation activities in Tanzania. A peculiar twist to the management of ci- vil aviation is the delegation of responsibility for airport maintenance to the Ministry of Works. It is difficult to assess the impact of the Aero- dromes Division of MOW on ATC operations and major airports. However, it has been recognized by the management of ATC and Directorate of Civil Avia- tion that the current spread of responsibilities among various major agen- cies is not an efficient system. Paradoxically, the Civil Aviation Depart- ment and Tanzania Airways have a close relationship that should not exist. The Civil Aviation Department as a regulatory body for all civil aviation matters should maintain an arm's length relationship while its operating divisions, air traffic control, communications and navigation aids should be closely integrated with overall domestic air service requirements as distinct from its international obligations.

5.3 The components of the civil air transport system in Tanzania are:

(a) Air Tanzania - a Government-owned airline with responsibili- ty for providing passenger and freight service on domestic, regional and international routes;

(b) Directorate of Civil Aviation with responsibility for mana- ging the air traffic control system and regulatory functions related to air transport;

(c) the Aerodromes Division in the Department of Public Works; and

(d) the meteorological department which serves air transport as one of its functions.

17/ Aeroflot, Air France, Madagascar, Air Zaire, Alitalia, British Airways, Deta (of Mozambique), Egyptair, Ethiopian Airlines, KLM, Lufthansa, PIA, Sabena, SAS, Somali Airways, Swissair, Zambia Airways, Uganda Airline, Air India. Status as of December 1981. 100

a) Department of Civil Aviation

5.4 The Department of Civil Aviation was created at the time of the dissolution of the East Africa Community and was composed of former Commu- nity technical staff. The Civil Aviation Act of 1977 which created the DCA and the Civil Aviation Board, refused specifically to "control regulation and orderly development of civil aviation" and more generally "to enable effect to be given" to the Chicago Convention". The text of the act, how- ever, dwells mainly on its regulatory function (bilateral agreement, licen- sing airmen/airdraft, flying operations etc.) but is vague on control of aerodromes and other operational matters.

5.5 The DCA is largely involved in regulatory work and even more so in air safety operations including air traffic control, communications and air navigation aids. The operation and maintenance of the airways system makes the largest budgetory demand on financial resources. Equipment and spare parts purchases for air traffic control and navigation aids require a subtantial amount of foreign excahnge and to a large degree depend on bila- teral aid. The training of personnel and the upgrading of the system will continue to require substantial foreign exchange.

5.6 The basic problems faced by the DCA are (i) its inability to earn sufficient foreign exchange for its operational needs and training; and (ii) its lack of effective control over aerodromes in the country. The planning, construction, operation, and maintenance of aerodromes has not followed a plan based on careful evaluation of requirements and priori- ties. The existing international airport at Kilimanjaro is under- utilized and the new Dar es Salaam airport will exceed immediate needs. Planning for other airports in the country as not been adequately evaluated. Lack of adequate maintenance at domestic aerodromes has in some cases led to curtailment of services.

b)Air Tanzania Corporation

ATC Assets

5.7 ATC operates 11 aircraft (two Boeing 737s, 5 Fokker Friendships (F27) and 4 twin motor propeller planes [DH6]). ATC has scheduled flights to 18 domestic and 12 international destinations.1 8 / In reality, however, fuel shortages, lack of operational aircraft, etc. frequently disrupt the schedule. Interncontinental service was terminated in December 1980 due to huge financial losses.

18/ Domestic Flights: Dar es Salaam, Bukoba, Dodoma, Iringa, Musoma, Mtwara, Machigwea, Pemba, Lindi, Masasi, Songea, Kilwa, Kilimanjaro, Mafia, Tabora, Kigoma, Tanga, Zanzibar. International Flights: Seychelles, Moroni, Madagascar, Mauritius, Maputo, Salisbury, Lusaka, Blantyre, Addis Ababa, Entebbe, Kigali, Bujumbura.

Status at the end of 1981; there are also two Boeing 707s which are grounded due to cancellation of international services. 101

5.8 ATC employs about 1,620 workers (including 60 expatriates); this is more than adequate for the size of its operations; however, like other institutions, it needs more qualified, skilled and experienced personnel. Substantial amounts have been spent to train engineers and operations mana- gers at the expense of other facets of the corporation. Currently, about 90 engineers are taking basic training courses in the Netherlands, Finland England, Ethiopia and India and 24 pilots are taking basic training in the Netherlands and Finland.

5.9 Soon ATC will operate two major line maintenance hangars, one at Dar es Salaam and the other at Kilimanjaro airport. Operations in the first have been plagued by inadequate equipment and maintenance tools for- cing ATC to rely on outside help such as Air Madagascar, KLM, Rolls Royce, Fokker and Air Zimbabwe for major fleet maintenance and engineering sup- port. These services cost ATC about T Sh 1.0 million per month (US$122,000). The Kilimanjaro maintenance hangar which is currently under construction should help to reduce ATC's maintenance expenditures; however, it is now 13 months behind schedule and has a cost overrun of T Shs 36.8 million (original estimate for the project, T Sh 102.8 million).

5.10 ATC's operations have been expanding rapidly since its inception in 1977.

Air Tanzania Operating Statistics a/

June-Dec. 1977 1978 1979 1980

Number of Passengers (000) 86 193 292 388 Freight (tonnes) 581 1,218 1,712 2,034 Mail (tonnes) 122 255 305 368 Gross Revenue (T Sh million) 42.0 95.8 175.2 275.2 a/ Includes flights to all airfields(domestic and international).

Source: Economic survey 1980.

5.11 The number of passengers carried increased an average of 65% per year, freight by 52% per year, and gross revenue by 87% per year. However, given the low starting base of ATC, these figures do not present an accurate picture of its real conditions and poor operations. 102

Total Civil Aviation Traffic a/ (without transit traffic)

Other Domestic Dar es Salaam Kilimanjaro Airports Passenger Freight Passenger Freight Passenger - ('000) (tons) ('000) (tons) ('000)

1976 316.0 4,373 52.5 437 412.2 1977 209.9 2,751 23.4 271 227.4 1978 267.6 2,988 54.9 529 165.9 1979 242.9 3,311 83.4 725 390.4 1980 351.7 1,826 100.7 495 392.6

a/ Includes foreign companies as well.

Source: Department of Civil Aviation.

Civil aviation traffic in Tanzania slumped heavily in 1977 after the disin- tegration of EAC. But by 1980, the traffic had recovered except for frei- ght at Dar es Salaam airport which has remained way below 1976 levels. In total passenger traffic, ATC's share in 1980 was about 46%, and the remain- der was carried by foreign airlines and domestically registered charter companies (TAL and TAS) which own about 10 small aircraft combined.

5.12 -. The loading averages for passenger and freight services has been declining on ATC flights.

Passenger and Freight Loading Average

1977 1978 1979 1980

Passenger Loading Average (%) 44.7 52.2 53.6 49.6 Freight Loading Average (%) 45.9 55.9 45.1 42.1

Source: Ministry of Planning and Economic Affairs, December 1981.

Lack of maintenance and spares cause frequent flight cancellations, causing the averages to fall even lower. The next table presents the aircraft utilization rate for 1980 and shows the low aircraft availability rate. 103

Aircraft Utilization Rate, 1980

B737 F-27 DHC-6

Actual Hours/day 6.1 3.2 3.7 Budgeted Utilization Rate a/ 6.5 6.2 6.2 Optimal Utilization Hours/day 9 8 7 Shortfall (%) Actual/Optimal 32 - .60 47

a/ Utilization of aircraft budgeted by the management.

Source: ATC: Viability Study, 1981.

5.13 The utilization rates are well below optimums, and for the F27s and DHC-6s, they are well below even the budgeted rates. Again, this is a direct result of the lack of spare parts and maintenance facilities. If aircraft utilization continues to be as low as it has been, then ATC must reduce its present fixed expenses to conform to the real level of acti- vity.

5.14 A comparison of ATC's crew flight time and aircraft utilization rates shows costly scheduling inefficiencies particularly in light of crew costs (numbers, salary, allowance and hotel expenses) which have more than doubled in the past two years.

ATC Crew Utilization Rate, 1980

B-737 F-27 DHC-6 All Fleet

1980 Actual a/ 48.3 31.6 55.5 45.1 1980 Budget a/ 64.9 35.2 65.9 55.3 Difference in Hours (16.6) (3.5) (10.4) (10.2) Percent of difference 25.6 10.1 15.8 18.4

a/ Hours flown per crew per month.

Source: ATC: Viability Study, 1981.

Optimal crew flight time per aircraft type should a at least 80 hours per crew per month19/. Fleet-wide, the present rate is 44% below this figure.

19/ Viability Study: ATC 1981. 104

5.15 ATC has not utilized its fleet efficiently for domestic opera- tions. Besides operational and maintenance constraints, its scheduling has - not been been based on sound economic planning. This is particularly true of some route stage lengths and is a direct result of ATC's inability to conduct detailed route profitability studies and market research to coordi- nate its total network. Cargo load factors, particularly of the larger aircraft have been below 30% and should be a major part of the profitabili- ty studies.

Financial Performance

5.16 ATC has not made a profit since 1977. By the end of 1981, its accumulated losses were over T Sh 200 million and the financial crisis al- most closed it. The Government chose to extend increased overdraft facili- ties (T Sh 13.0 million in 1979 to T Sh 75.4 million in 1981) to keep it going.

5.17 Although revenue has increased 87% per year since 1977, operating costs have increased at 80% per year. Salaries and social expenses (17% of operation costs) rose 120% per year; aircraft fuel and oil (47% of opera- tion costs) rose 158% per year (see financial statement below). Conse- quently, cash generation from the present level of operations has not been adequate to meet aircraft loan repayments plus interest charges.

5.18 ATC's expenses will escalate yearly in proportion to fuel and oil price increases. It already pays more for fuel and oil than US or European operators, and increases in these items form a major block to ATC's financial growth.

Aviation Fuel Prices

United States T Sh 1.17/litre (August 1980) Europe T Sh 2.70/litre (1981) ATC:DSM T Sh 3.36/litre (1981) Kilimanjaro T Sh 4.31/litre (1981)

Source: ATC: Viability Study, 1981.

Financial Performance -- 1977-1980

5.19 The Corporation's financial performance for 1977-1980 is shown in the following summary results for each year; no financial report has been audited yet, and figures below cannot be considered final. 105

Revenue Expenses Performance (T Sh '000)

Total 1977 1978 1979 1980 77/80 Operating Revenue 1. Traffic Revenue 36,653 77,046 124,012 234,383 472,094 2. Other Revenue 5,.431 25,892 55,622 40,800 127,745 42,084 102,938 179,634 275,183 599,839

Operating Expenses 3. Salaries & Social Expenses 12,385 26,339 41,334 49,925 129,983 4. Other costs of organization 9,648 22,064 24,111 34,486 90,309 5. Aircraft fuel & oil 9,990 18,232 45,869 134,649 208,740 6. Maintenance Supplies & Work by Third Parties 3,114 8,405 6,175 15,420 33,114 7. Other Direct Costs of 13,796 30,271 22,002 51,384 117,453 Operating 48,933 105,311 139,491 285,864 579,599

Operating Result, excl.depr. & Interest - Profit (Loss) (6,849) (2,373) 40,143 (10,681) 20,240 8. Depreciation: Aircraft (193) (6,189) (25,419) (29,965) (;61,766) Others (104) (500) (3,549) (7,700 (11,898) (297) (6,689) (29,013) (37,665) (73,664)

Balance of Operating Revenue and Expenses: (7,146) (9,062) (1,130) (48,346) 53,242) 9. Interest: Income - - - - Expenses (89) (1,752 (24,541) (26,824 (53,206) 10 Profit (loss) on assets sold - - - - 11. Balance on other Income - - - -

Total Profit (Loss) (7,235) (10,814) (13,411) (75,170) (106,630)

5.20 ATC's cash flow shows the absence of internally generated funds which might be used for capital investments or even to meet aircraft and other loan repayments. The liquidity situation of ATC is presented on the following page. 106

Liquidity

1977 1978 1979 1980 Total Profit (loss) (7,235) (10,814) (13,411) (95,170) (106,630) Less depreciation 297 6,689 29,013 37,665 73,664

Cash Flow (negative) (6,938) (4,125) (5,602) (37,505) (32,966)

Source: ATC: Viability Study, 1981.

In addition to the escalating operations costs and resulting heavy cash outlays, other factors have adversely affected ATC's liquidity. Its major fuel suppliers (e.g. Shell and BP Tanzania) have curtailed or totally cut off credit; working capital has been tied down in technical materials and supplies due to inadequate management; and there are delays in completing capital projects which are non-productive in nature. Poor credit control prior to late 1979, resulted in a debt of T Shs 10.5 million. This is still outstanding and indicates serious financial mismanagement; it should be rectified as soon as possible.

5.21 Actual revenue has been lower than estimated in the past. Although there are many complicated factors involved, the major bottle- necks are:

(i) poor load factors on international routes (annual average of 54%);

(ii) low revenue yields on domestic routes from domestic fare pricing which does not rise to meet increasing fuel prices and cost of operations;

(iii) inadequate development of cargo business which could be lucrative; and

(iv) frequent flight cancellations.

5.22 The Ministry of Communication and Transport had denied applica- tions for domestic fare increases until March 16, 1981 but the reasons for this were unclear. The recent increases were:

(i) an increase in all domestic fares and cargo rates except for specific commodities by 27%;

(ii) first class fares adjusted to 150% of normal one way fare; 107

(iii) excursion roundtrip fare adjusted to 160% of normal one way fare.

(iv) cargo handling, storage, and clearance charges increased by 27%. 5.23 At the moment, it is almost impossible to price each route accu- rately due to the lack of reliable financial and operational data. It seems obvious, though, that the current fare structure is too low and does not reflect real cost. A preliminary comparison shows that domestic air fares charged by other carriers average 17% to 18% higher.

Comparison of Air Fares (T Sh)

ATC Others Difference Dar es Salaam to Kilimanjaro 625 738 18.1% Dar es Salaam to Mwanza 940 1,107 17.8% Dar es Salaam to Kigoma 1,090 1,271 16.6%

Source: ATC, Dar es Salaam, December 1981.

These are the fares after the 27% air fare increase in 1981. Assuming that ATC's operations are less efficient and more costly (higher oil/fuel and maintenance costs) than foreign carriers, then the current tariffs for ATC are substantially lower than the average ones (variance of more than 18%). Even if ATC was able to improve its loading average for freight and passen- gers to 80%, (currently 50% for passengers and 45% for freight), it would still be below the breakeven point in financial performance (after depre- ciation-and interest expenses). Consequently, substantially higher fares should be charged for domestic flights, and the cost of operations should be cut by curtailing uneconomic routes.

5.24 The lack of an effective cost/accounting system and route profi- tability study are major contributors to ATC's financial disarray. First, the absence of profitablity studies and marketing research means that un- economic routes cannot be cancelled and aircraft more efficiently utilized, thus reducing the cost of operations. Secondly, without sufficient infor- mation about its own liquidity and asset position, ATC has over-extended itself financially (such as the heavy investments into non-productive hous- ing projects and over-stocking of spare parts). Thirdly, appropriate fares for each route cannot be determined without the necessary operational cost /revenue information. 108

External Assistance

5.25 The recently completed viability study was the first comprehen- sive assessment since the inception of ATC of existing conditions and pro- blems. It showed the lack of any form of coherent policy and systematic attempts to improve operations. UNDP is providing four expatriates (commu- nication specialist, air transport economist, navigation expert, and elec- trical engineer) at the Department of Civil Aviation as well-as one commer- cial analyst at ATC and one expatriate at the Aerodromes Division of MOW., UK and Danish Aid (DANIDA) have provided fellowships to train engineers and pilots. At the moment, Dutch aid appears to be the most significant; it has committed funds for building the Kilimanjaro hangar and for providing spare parts and maintenance supplies needed by ATC. It has also included assistance from KLM (Royal Dutch Airlines) from early 1981 in the form of five Dutch expatriates who are currently in executive positions involving day-to-day management of ATC. The new General Manager of ATC who came in early 1981 appears to be an able manager.

c) Investment Program in Civil Aviation

5.26 All main projects which were included in the last Five Year Investment program 1976/77-1980/81 were carried out, and some were completed.

Capital Investments in Air Transport - 1977 to 1981 (T Sh '000)

1976/77 1977/78 1978/79 1979/80 1980/81

Aircraft--and Equipment 64,599 171,630 227,093 - 45,370 Dar Line Maintenance - - 7,027 - - Hangar Kilimanjaro Wide Body Maintenance Hangar - - 29,001 36,063 37,398

Total 64,599 171,630 263,121 36,063 83,168

Source: Department of Civil Aviation, Dar es Salaam, December 1981.

However, the delay in hangar construction, the shortage of industrial in- puts and other factors have caused substantial cost overruns on certain projects. For example, the Kilimanjaro maintenance hangar estimated to cost T Sh 102.8 million is 13 months behind schedule and has a cost overrun of T Sh 30 million (US$4.5 million); construction of the Dar es Salaam, City Terminal and staff housing at Msosani and Oysterbay have all been de- layed and have, as a result substantial cost overruns. 109

5.27 Although most investments made in the 1976/77-1980/81 program appear generally necessary, they have gone beyond Government's and ATC's financial capacities. The cost overruns themselves will mean that ATC must spend half of the next two-year capital investments salvaging these pro- jects.

5.28 ATC's management has prudently limited itself to a short two-year investment program for its next phase as recommended in the viability study (1981). This program is expected to have a capital shortfall of about T Sh 346 million (US$42.2 million) in FY 1982 and T Sh 224 million (US$27.22 million) in FY 1983. In both years, about 47% of this shortfall comes from the additional investments required to complete already started projects, most of which are non-productive investments (see Annex A). The 1981-82 investment program has only two confirmed sources of funding, an Amex Bank loan for hotel and flight kitchen totaling T Sh 188 million. But that leaves it still short of T Sh 382 million (US$46.63 million) for the two year program, and no other source has been confirmed as yet.

5.29 The total estimated loss on operations is T Sh 92.9 million (US$11.33 million) for 1981 and T Sh 45.6 million (US$5.56 million) is pro- jected for 1982. ATC has estimated a modest 3% increase in operational re- venue in 1981 and 18% for 1982; however, given the previous year's 53% increase, the 3% may be underestimated. On the cost side, salaries are es- timated to increase .7%, maintenance and supplies by 33%, but fuel and oil are estimated to decrease 15%. These estimates by ATC would indicate that ATC will trim its operations on flights and improve aircraft availability through increased allocation for maintenance and spare parts (see Table 5.1 .for the "Projected Statement of Revenue and Expenses"). TANZANIA Table 5.1

TRANSPORT SECTOR MEMORANDUM 110

PROJECTED STATEErNiT OF REVENUE Ahiu txi't,4$tS FOR THE YEARS 1981 AND 1982

(Shs. '000's)

Operating Revenue 1981 1982

1. Traffic Revenue 243,500 292,000 2. Other revenue 40,500 42,000

Total Revenue 284,000 334,000

Operating Expenses

3. Salaries & Social expenses 60,500 64,000 4. Other cost of organisation 46,000 48,300

106,500 112,300 5. Aircraft fuel and oil 114,300 114,000 6. Maintenance Supplies and Work by third parties 31,200 40,300 .. Other direct cost of operation 42,200 44,000

Total operations expenses (294,200) (310,600)

Operating results excl. depreciaticn and interest Profit (Loss) (10,200) 23,400

8. Depreciation: Aircraft 30,500 30,500 Other 9,500 10,500

(40,000) (41,000)

Balance of operatinq revenue and expenses (50,200) (17,600)

9. Interest: Income _ _ Expenses 42,700 28,000

(42,700) (28,000)

(92,900) (45,600) 10. Profit (Loss) on sale of fixed assets _ 11. Balance of other income- and (deductions)

P.rofit (L.oss (92,900) (45,600)

Rate___of __xch__ng ____I __US _ _Shs. I-=3-

Rate of exch~inge: 1 US$ Shs. 5S.3O Table 5. 2

TANZANIA-11

TRANSPORT SECTOR MEMORANDUM

STATEM4ENT OF REQUIRED FUNDS FOR CAPITAL-INVESTMENTS IN 1981 AND 1982 (Shs. '000's) 1981 1982 LOCAL FOREIGN LOCAL FOREIGN CURR. CURR. TOTAL CURR. CURR. TOTAL Already started:

1. City Terminal Building 10,459 4,300 14,759 - - -

2. Msasani Housing 6,030 - 6,030 - - -

3. Line Maintenance Hangar 406 5,000 5,406 - - - 4. Oysterbay flats, incl.

furnishing 4,260 - 4,260 - - - 5. Hotel and flight kitchens 13,280 64,325 77,605 20,750 84,328 105,078

6. Kilimanjaro Maintenance 19,750 34,600 54,350 - - _ Hangar

54,185 108,225 162,410 20,750 84,328 105,078 Other

7. General-Manager's office 482 - 482 400 - 400 8. Finance and Planning 750 750 1,500 500 500 1,00O 9. Manpower, Development & Admin:istration 5,680 174 5,854 5.700 300 6,000 10. Cormercial 400 5,100 5,500 400 3,600 4,000 11. Maint. and Engineering - 20,978 20,978 - 10,000 10,000 12. Operations 1,200 3,280 4,480 1,000 3,000 4,COO 13. Housing - Project Kilimanjaro 24,000 - 24,000 25,000 - 25,000 14. Kilimanjaro Maintenance facilities (workshops etc.) _ _ _ - 18,000 18,000 15. Miscellaneous _ _ _ 23,000 - 23,C0O

86,697 138,507 225,204 56,050 119,728 175,778

I ===2==______======______======______====___ __ ======______======______Table 5.3 112

TANZANIA

TRANSPORT SECTOR MEMIORANDUM

PRO.lECTED REQUI£RE?lETS FOR FU;NJS OtJPtNG 1981 AND 1982

.(Shs. o000's)

1981 1982 Funds obtained from:

1. Projected results (92,900) (45,600) 2. Depreciation: Aircraft 30,500 30,500 Other assets 9,500 10,500

40,000 41,000 3. Book profits on sale assets -

(52,900) (4,600) Funds required for:

4. Capital investments (excl. aircraft); projects already started 162,410 105,078 other projects 62,794 70,700

(225,204) (175,778) S. Payments for aircraft:

advance payment aircraft on order - 9,000 repayment long term loans for aircraft during 19S1/1982 33,847 33,847

(33,847) (42,847)

6. Payment arrears (34,400) _

7. Additicnal funds required during 19S1/1982 (346,351) (223,225)

Less Available from confirmed sources: - Amex Bank Loan for Hotel & Flight Kitchen 57,270 84,328 - Dutch aid for Kilimanjaro Hangar, Maintenance supplies & salary topping up 41,600 4,000

98,870 88,328

Net additional, funds requirements 247,481 134,897 t=5=UX =a=.= 113

6. MANPOWER NEEDS IN THE TRANSPORT SECTOR

Introduction

6.1 One of the main problems in all sectors and in the transport sec- tor in particular is the shortage of competent middle and high level mana- gers for planning, administering, coordinating and implementing projects and programs. The shortage extends to qualified engineers, accountants, statisticians, and financial analysts and is aggravated by a high turnover rate which is due to wages that are not competitive with those in the pri- vate sector or the parastatal organizations. Until there is adequate skilled manpower in the civil service and parastatals, the Tanzanian Government will continue to suffer from poor planning, coordination and ma- nagement.

6.2 Government expenditure for Education and Training in 1978/1979 (estimate) was 15.8% of its total expenditure and 6.8% of GDP. But accord- ing to the World Bank Seventh Education Project, between 1975 and 1980 the deficits for manpower requirements remained high, 56% for the top adminis- trative officials (skill A), 58% for the second level administrators (skill B) and 63% for the skilled/technical workers (skill C). The forecasts for 1981-1985 indicate a small improvement, 39.2%, 16.5%, and 59% deficiency rates respectively. The Government policy on education is the major cause of this shortage. Since Independence, Tanzania has linked education and human resource development to national progress. However, following Presi- dent Nyerere's guidelines in the Arusha Declaration of 1967 and the posi- tion of the Government paper "Education and Self- Reliance", priorities were shifted to basic education of the entire population, and the content of education was refocussed on the rural environment. This emphasis on universal literacy with its heavy commitment of scarce resources to elementary education was successful, but it put a severe strain on post- elementary education and development of higher and middle level personnel. The Government has recently shifted its emphasis to secondary technical and post-secondary education to increase the numbers of technicians and middle level managers, but there are too few science teachers. Therefore, the shortage of skilled manpower will continue to plague the country in the foreseeable future.

Manpower Needs in the Transport Sector

6.3 Three ministries are directly involved in the transport sector: (i) the highway subsector is under the authority of MOW, (ii) the Ministry of Communications and Transport (MCT) is responsible in principle for the development of other transport modes, and (iii)the Ministry of Planning and Economic Affairs (MPEA), -- its Division for Infrastructure reviews trans- port investments for five-year plans. In addition, there are numerous Government agencies/parastatals involved in the sector (Tanzania Harbors Authority, Tanzania Railways Corporation, National Transport Corporation, Air Tanzania, etc.) with their own development programs; all of them are nominally under MCT's authority. Because they lack both the requisite staff and an organized set up, they have not been fully functional. 114

6.4 The shortage of trained and experienced staff is a serious one in the transport sector. Many expatriates left the country in the 1960's, and thereafter, despite numerous technical assistance grants from bilateral and multilateral sources, less than one half of the engineering and technical positions have been filled because Tanzania lacks a large enough qualified workforce from which to draw employees.

6.5 Currently, MOW's vacancy rate is over 30%; in reality, it is much higher in critical posts. For example:

Job Description Vacancy %

Engineers 54 Other Professionals 51 (Economists, Financial Analysts, etc.) Technicians 45 Administration 35

Comparable breakdowns for other ministries and parastatals are not avail- able; however, it is safe to assume that similar situations there. The high turnover rate compounds the problem of staffing shortages. It aver- ages 50% for middle and high level management across the board and is cau- sed primarily by wage and fringe benefit scales which cannot compete with those of the private sector.

Employment Situation in Transport -- 1979

Ministry or Total Total Attending Parastatal Employed Vacancies Established Courses a/

MOW 5,943 2,796 8,719 160 MCT 1,357 707 2,063 83 ATC 1,593 - 1,593 440 TRC 15,104 1,189 16,293 222 TAZARA 3,946 409 4,355 62 NTC 56 6 62 1

a/ Abroad or in the country.

Source: Ministry of Manpower Development and Planning Tanzania Manpower Survey: 1981 (Draft)

6.6 The salary difference between a civil servant and a private sec- tor worker is extremely high -- 160% to 300%. The difference between para- statals and the private sector is anywhere from 75% to 150%. The differ- ences were even greater from 1975 to May 1980 during the civil service wage 115

freeze. In 1980/81 the Government salaries were raised an average of 35% to 42%. Salaries in the private sector are generally thought to be much higher than shown below because often, middle and higher level managers and technicians receive not only the declared salary but also a tax compen- sation which, given the extremely progressive tax system in Tanzania, means that they earn considerably more than is reported.

A Sample of Salary Differences a/ (T Shs per month - gross income)

Private Job Description MOW Parastatal Sector

Civil Engineer (5 Years Experience) 3,500 4,500 9,000 Foreman (Road Maintenance 1,200 2,000 5,000 Mechanic 900 2,000 3,500 Operator 900 2,000 3,500 a/ Minimum wage set-in July 1981 increased to T Sh 600/month.

Source: Estimates made in MOW, 1981.

6.7 Housing and transportation are major fringe benefits. Ministries and parastatals pay an average of 30% of the housing costs; private compa- nies, on the other hand, provide not only free housing and private medical care (preferred over Government-funded public health care) but also private transportation for their middle and higher level workers. Although trans- portation is usually provided to all Government workers, only the top mana- gers in parastatals and top Government officials (Ministers and Principal Secretaries) receive private transportation.

6.8 There have been various trial incentive plans for Government em- ployees such as interest-free loans and bonus systems. The loan scheme was abandoned in 1974 due to high costs, and the bonus system, which was rarely applied, was ineffective because the bonuses were given only when opera- tional targets had been reached and then were distributed equally to all employees which defeated the program's purpose.

Manpower Allocation and Placement System

6.9 The Ministry of Manpower Development and Planning (MMDP) esta- blished in 1975 is responsible for manpower allocation, placement and plan- ning for future demand. This includes responsibility for allocating and placing all graduages from the University of Dar es Salaam, the five tech- nical colleges and all secondary schools. 116

6.10 A manpower survey was begun in 1979 to assess the existing man- power situation in Tanzania and was expected to be completed in 1981. How- ever, the report is still in preparation. MMDP plans to use the informa- tion from this report to deploy available manpower more efficiently, but at the moment, there is a complete lack of reliable data for manpower needs analysis in the various ministries and parastatals.

6.11 There are five technical secondary schools (TSS) which specialize in training civil, mechanical and electrical technicians. TSS graduates an average of 3,600 students per year, and it is projected that by 1985/86, there sill be 19 TSS which could produce 11,400 technicians per year. The two technical colleges (TC) currently produce about 300 civil, mechanical, and electrical engineers per year. The top students graduating from TSSs are admitted to a TC for advanced engineering education. The University of Dar es Salaam currently graduates an average of 130 engineers per year. The number of economists, statisticians and financal analysts being gradua- ted each year is not available.

6.12 These graduates and the trainees returning from abroad are bonded to Government service or related parastatals for a minimum of five years. The bonding system seems to have produced positive results since it guaran- tees that the Government will have a set amount of manpower which it can allocate every year. Ministries and parastatals forward their staffing re- quests to MMDP annually; it evaluates the requests every March and makes a decision on the number and type of staff to be allocated. The priority scale is: Government civil service, parastatals and the private sector; staff are rarely allocated to the last.

6.13 Tanzania will continue to experience a shortage of competent en- gineers, technicians, economists, financial analysts and general adminitra- tors for-the next five years. The National Five-Year Manpower Projections (1981-86) prepared by MMDP have estimated that the required engineers (civil, mechanical, electrical) in that period will exceed 2,500 and the expected output will be about 30% short of that requirement. The shortage could be alleviated by promoting workers with solid experience but without academic qualifications. Tanzania's current promotion system hinders such promotions because it is based solely on academic qualifications. On the other hand, it should be mentioned that most parastatals and ministries are overstaffed, and the staff is underemployed. The critical shortage is in the specific skills, namely technicians and managers.

Past Bank Projects and Difficulties with Shortages of Qualified Manpower

6.14 Following are some of the difficulties experienced by the past Bank projects:

(a) difficulty in finding suitable local candidates for middle/ high level administrative personnel for managing five pro- ject companies (Trucking Industry Rehabilitation and Im- provement Project); 117

(b) technical assistance personnel in the field ineffective because they were required to advise local MOW counterparts at headquarters. Because of road maintenance organization at the time, those counterparts had little or no control over field operations (Fourth Highway Project);

(c) misuse of equipment by untrained operators (Fourth Highway Project);

(d) MOW unable to exercise full authority over the trunk road maintenance program due to lack of qualified and experienced staff (Fourth Highway Project);

(e) severe manpower shortages in MOW and the principle agricul- tural parastatals (up to 35% vacancies) hinder efficient im- plementation and overall coordination of projects and pro- grams (Export Rehabilitation Program).

6.15 Ongoing Bank projects recommend the following to alleviate the manpower shortages in the transport sector:

(a) Trucking Industry and Rehabilitation Project: courses for trucking managers, accountants and for supplies managers were established at NIT campus;

(b) Fourth Highway Project: it was recommended that in any future technical assistance program in Tanzania, the experts be given executive and managerial authority until a suffi- cient number of nationals is trained. Improvement of the Morogoro Training Center's effectiveness was recommended;

(c) Fifth Highway Project: appointment of local staff counter- parts was made a condition of credit effectiveness, and technical assstance staff was to be given some executive responsibility for project works.

6.16 Technical assistance staff have been able to fill important posts temporarily when qualified local staff have been lacking. They have also been able to train Tanzanian staff on-the-job (if local counterparts are assigned) or in training centers. However, in some cases the Government has been lax about assigning the local counterparts to the technical assis- tant and this situation should be improved. The Government and the Bank will have to monitor both the consultants and their staff training assignments more closely in the future. 118

7. Energy and the Transport Sector

7.01 Tanzania's energy resources are assessed to be sizable (coal, hydro carbon, forests, etc.) in comparison to its demand, but essentially undeveloped. The Government has not yet established a long-term strategy in the energy sector. However, faced with the rising cost of oil imports and its serious impact on the country's balance of payments, the Government has initiated several activities to assess and exploit the domestic energy potential. Petroleum exploration is now being undertaken with the assist- ance of IDA, bilateral and multilateral donors and foreign oil companies.

7.02 Development of domestic energy resources will require large financial commitments at a time when the resource availability is likely to remain constrained and a careful evaluation of energy projects and ranking of their priorities is necessary. These consideration led IDA to include financing for 36 man-months of consultancy services (an economic advisor and an energy specialist) under the First Songo Songo Petroleum Exploration Project (Cr. S-27-TA) (the First Songo Songo Project) to initiate work on an energy plan, including the review of energy pricing.

7.03 Total annual energy consumption in Tanzania during 1979 and 1980 was about 5.0 million tons of oil equivalent (TOE). Total petroleum consumption is estimated to be about 710,000-730,000 tons per year, of which about 400,000 tons annually (Table 7.1) is consumed by the transport sector, or about 56% ot total country's consumption. Out of 400,000 tons, the road transport is attributed about 64%, railways 17%, air transport 14%, and water transport 5%. The impact of crude oil and product imports on the country's balance of payments is already significant. In 1980, the petroleum bill was US $260 million or about 20% of Tanzania's merchandise imports or 52% of all country's export.

7.04 The retail petroleum product prices in Tanzania are generally higher than the international pricey0 ond reflect costs of imported crude oil and products, domestic refining- and distribution costs as well as economic and social considerations and recognition of the need for conser- vation. A comparison of Tanzanian retail prices for oil products in late 1981. (converted at the official exchange rate) with the average retail price based on a sample of 56 countries (including developed countries) is set out below: Retail Prices of Major Petroleum Products

Product Tanzania ($/gal.) Average Retail (For a group of Countries) Premium Gasoline $4.35 $2.29 Regular Gasoline $3.37 n.a. Diesel Fuel $2.00 $1.45 Fuel Oil $0.99 $1.06

20/ The annual'capaci_y ofTIPER Refinery is estimated at 750,000 tons -- sufficient to present country's requirements. 119

Taxes in gasoline are 21% and on diesel fuel 16% of the respective retail prices; the taxes appearto be on the low side (Table 7.2). The Government has rapidly increased the prices of petroleum products following the international oil price increases in 1979 (when oil product prices were revised upwards by more than 50%).

7.05 The increased petroleum prices, reduced imports and some restrictions on sale of petroleum products have caused a decline in gasoline consumption in the sector in 1980 and 1981. In a six-year period (1975-1981) consumption of regular gasoline declined by 2.2% p.a., while consumption of super and diesel fuel had a very modest growth of 4% and 2.2% p.a. respectively; the only significant growth was marked in jet-aviation fuel 17.2% p.a. (Table 7.1). It would have been better, however, if the decline in consumption was achieved through systematic, planned and coordinated action to save the energy (shifting road transport when possible to rail- ways, closing down uneconomic internal flights, choosing more fuel effi- cient trucks, etc.).

7.06 The Report on Energy Policy in Tanzania, completed by consultants in 1980 and financed by ODA, makes the following recommendations which should concern the transport sector:

- the Government should take necessary steps to obtain favorable long-term contracts with oil suppliers;

- a system of priorities in use of limited petroleum resources should be established by the Government in the event of shortages (which already happened);

- coastal shipping should be used whenever possible as alternative to road transport (that will not save much fuel);

- present fleet of diesel locomotives should be replaced by new coal fired units, especially on the Tazara line (in connec- tion with Songwe-Kiwira coal deposits);

- long haulage of freight should shift to railways whenever possible (the consultants claim that railway transport could be up to ten times more fuel efficient); and

- for haulage of freight over small distances in rural areas, use of animal carts should be encouraged.

7.07 The Bank Group is expected to continue to support the Government' policy to attract foreign capital for petroleum exploration. Thus, the Bank has been closely involved over the last two year in the discussions between Government and Shell Petroleum NV. These discussion have recently culminated in agreement for Shell to undertake an extensive onshore explor- ation program southwest of Dar es Salaam. On Bank Group initiative, the Government has agreed that an energy plan would be prepared by 1983 and, promptly thereafter, submitted to IDA for its review and comment. In that context, future Government energy strategy vis-a-vis transport sector should be carefilly examined. Table 7.1

TANZANIA TRANSPORT SECTOR MEMORANDUM

TABLE 12.1: CONSUMPTION OF PETROLEUM PRODUCTS IN TRANSPORT SECTOR (IN METRIC TONNES) ,. Estimates Petroleum Product 1975 1976 1977 1978 1979 1980 1981

Aviatfon Gasoline 5,224 3,209 2,611 3,284 2,352 2,078

Premium Gasoline 52,446 58,623 56,410 61,317 71,737 70,921 66,726

Regular Gasoline 52,500 52,838 46,438 44,440 45,146 42,748 45,878

Diesel Fuel 205,059 236,579 215,612 217,968 229,555 259,322 233,858

Jet - Aviation Fuel 23,996 29,574 22,714 28,045 44,457 55,300 62,460

Source: Tanzania Petroleum Dev. Corporation (TPDC), Dar es Salaam, December 1981. Table 7.2

TANZANIA TRANSPORT SECTOR MEMORANDUM

PRICES AND TAX RATES OF REFINED1/ PETROLEUM PRODUCTS (in TSHs/litre)

CIF 2/ Petroleum Product Dar es Sa.-CIM Wholesale price Retail Price- Sales Tax

Premium Gasoline 3.234 9.19 9.40 1.95

Regular Gasoline 3.0996 7.11 7.30 1.55

Jet - Aviation Fuel 3.0492 3.905 - 0.25

Diesel Fuel 2.9148 4.11 4.30 0.70

1/ As of end November 1982

2/ Handling charges, transport costs,etc. included

Source: TPDC (Tanzanian Petroleum Development Corporation) TIPER - Refinery Petrol Stations (TOTAL, AGIP, Shell) 122

8. Past Bank Group Assistance to the Sector

8.01 The Bank's strategy in the sector was initially directed towards new capital investment both in roads, the EAC railways and ports. In mid-1970 the strategy changed to more intensive institution-building, enhanced road maintenance and assistance to road transport industry. Achievementsin institution building, although modest so far, appear to be improving. The most significant effect of IDA involvement has been the reorganization and strengthening of the Ministry of Works' (MOW) Roads Division in its -maintenance of the primary road network. In the trucking industry, IDA assisted in organizing five regional parastatal trucking companies and provided technical assistance to the National Institute of Transport, which has been attended by a large cross-section of personnel from the Government agencies and parastatal companies.

8.02 The Bank Group has financed five projects in the Highways subsector (totalling US $91.7 million). In the late 60s and early 70s, it assisted new road construction under the first three highway projects, when over 1,000 km of new roads were built. A Government-formulated national trunk road maintenance program in 1974 was supported by two IDA-financedroad maintenance projects -- the Fourth and Fifth Highway Projects. Other Bank Group projects have included a Truck Industry Rehabilitation and Improve- ment Project and six loansfor EAC (totalling US $166 million), three for ports improvement and three for modernization for East Africa Community railways. The Bank Group has also supported a number of feeder roads construction programs mostly under rural development and agricultural projects.

8.03 The Bank Group has been extensively involved in the development of the transport sector in Tanzania. Following are the projects financed by the Bank Group: (a) US $14 million, IDA Credit 48-TA in 1964 for con- struction of various road sections totalling 860 km; supplemented by a US $3 million credit in 1968 (115-TA); (b) US $15.5 million under IDA Credit 142-TA and US $7.0 million under Bank Loan 586-TA for reconstruction of part of the Tan-Zam Highway; (c) US $6.5 million, IDA Credit 265-TA in 1971 for construction of a section of a main road in the southeast (200 km) and betterment of selected feeder roads; (d) US $10.2 million, IDA Credit 507-TA in 1974 for improving the maintenance of part of primary roads and for carrying out a study of the road transport industry; (e) US $15.0 million, IDA Credit 743-TA in 1977 for a trucking industry rehabilitation and improvement project, based on the road transport industry study under the previous credit; and (f) US $20.5 million, IDA Credit 876-TA in 1979 for improvement of road maintenance of remaining primary road network not covered under Credit 507-TA. In addition, rail and port improvements in Tanzania were also financed by the Bank Group through six loans amounting to US $166 million to the EAC organizations concerned; the loans assisted with improvement, modernization and expansion of the EAC railway (3) and the ports of Dar es Salaam and Tanga (3).

8.04 The projects implementation has often been unsatisfactory in spite of (i) considerable amount of staff time deployed to assist the Government and (ii) substantial technical assistance included in the pro- jects. The Third Highway Project (Cr. 265-TA) was found to be economically 123 unviable with an overall ERR of less than 4% (PCR, June 30, 1980); similar conclusions could be expected to be drawn later in future PCR for the Fourth Highway Project (Cr. 507-TA). In the three projects underway, there are over 2,000 man-months of technical assistance included -- over 1,000 in the two road maintenance projects and 900 in the Trucking Project. All the projects encountered considerable delays in starting and consequently the physical targets have not been achieved on time, with some of them not being achieved at all.

8.05 While IDA should be accounted primarily responsible for the economically unviable Third Highway Project, failures and shortfalls in achieving project targets in the oigoing projects could be mainly attri- buted to the Government's insufficient support of the projects and unsuit- ability of selected consultants. That could be illustrated in the Trucking Project (Cr. 743-TA) with the Government's failure to provide in a timely manner the equity capital (TSh 77 million) to regional trucking companies, which caused a three-year delay of project implementa- tion; that issue is now being resolved. As for the road maintenance projects, both started with long delays; the Fourth Highway Project encountered major difficulties -- explained in para. 8.06 and had to be consequently recasted in order to make better use of remaining funds; the experience gained in implementation of technical assistance was drawn up and the ongoing projects were adjusted to make their use efficient.

8.06 The primary objective of the ongoing road maintenance projectswas to strengthen the institutional capacity of the MOW in carrying out the maintenance program. The Fourth Highway Project has not been very effec- tive in achieving its objective. MOW's initial reluctance to hire techni- cal assistance agreed under the project led to substantial start-up delays (up to two years). When the technical assistance personnel were recruited, several problems arose and persisted. MOW could not make the required number and quality of counterparts available to the project. MOW also felt that it was not able to direct the activities of the technical assistance personnel and the latter felt primary responsibility towards their head office abroad. The result was considerable delay in the flow of information and decision making, inadequate maintenance planning as well as inadequate training of the counterparts. Several problems arose on the physical side as well, some of which were beyond MOW's control. A number of equipment items were diverted (primarily) to war efforts. Operation of equipment by poorly trained personnel led to equipment breakdowns. Many of these problems, particulary the organizational problems, have been addressed in the Fifth Highway Project, which started with more than a two-year delay. With the establishment of a separate trunk road maintenance organization, MOW has now been made fully responsible and accountable for maintenance of the equipment and planning and execution of the work. Technical assistance has been made more focused and key counterparts have been recruited. Morogoro Training School for technical level personnel was also assisted by the projects. In addition, about 120 Tanzanians are being trained in various engineering disciplines in India under financing from the project. While the results so far have not been very encouraging, persistent efforts and necessary time will ultimately build up the institutional cipacity of the MOW to plan and carry out the maintenance tasks adequately. TANZANIA

Organizational Structure of Ministry of Communications and Transport

MINISTER

I PRINCIPAL SECRETARY

PLANNING UNIT

SURFACE TRANSPORT AIR TRANSPORT SHIPPING COMMUNICATIONS MANPOWER DEVELOP DIVISION FINANCE AND DIVISION DIVISION DIVISION DIVISION ADMIINISTRATION

Source: Ministry of Communications and Transport ORGANIZATIONAL STRUCTURE OF THE MINISTRY OF WORKS

MINISTER FOR WORKS

|PRINCIPAL SFC

|SUILOING | MECHANICL DS OIVISION| N OWE AEROOROMES PLANNING IOVT STORES DIVISION I|DOIVISION | L f(1981) IADMINISRATION DIVISION (19h1) | LIVISION | CHIEF SUP IFCER

-r I @ ] IADl.1lNI5,O- I I FFCIORiOfSIGN IAL DESIGN ] cLES L NNINGANN ING

I iJORATiON PLANTS A INCONST.OL-I_PERSONF 1NEIINAL I SOLE PRI ES .TNEAMJIN |AEROORONE IF INANCE

AINTENACEAAlIRIMAINTERAtiCE PONAL aLREGION PAINM1W-~--TIrNT-E~WRONATj PORTS lRP4oLIMENTATNPOJECTS

ICONT,'RAC . WGOVT. TRANSPORT IDMONIST-l 4JOINT ONS'4JTRUCTIONJ AGENCY VICES I ICOMMISSIONS

-I

Un CA ';trv OFFICE

|STrJCTURES

ROADS z-

0Z. CONTRACTS n DESfjN SPECS 0 m

CODE OF PRACTICE_ z O MtAKIAL ETC z

r-4 CAIN ROADS >

FEECER ROADS

ROGERRS FEC z _

Lfl

ReS*4EP---' NTRUNK ROAS 1L_J _ _ _ _ _ IOi0 -4

TrRAFFIC OPERATIONS _ r,U I

|EQOUI!PMENT - n m |FERRIS$ ETC z

ROADS I s

|ACCOUNTS

IREGISTR -l-7 ORGANIZATIONAL CHART OF TANZANIA RAILWAY CORPORATION

Board ot Directore

General l&na;er

Ass stanC Aes tant GeneralXarAaGnager eneral anager

0 0 SAI-~Glery4=g et I Chief I r Chief l l Chlef Chief Hotels and Clt II het IIChie lc ClvilTraI ffLc Marine Manpower Catering elannin ng r Engineer Manager Superintendnt Dtvelopaent Managor Has Officerng

r~~~~~~~~~~~~~~~~~~~~~~~~~~Hn -r . -i e

speciastrativl Publl ntnal IMnaeetmanagerSertrRlain Corporate F A i r Se M~~~~~~~~~~~~~~~~anaer

"c""~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I.

DuIL:- Oft enr ORGANIZATION CHART OF AIR TANZANIA CORPORATION

MINISTRY OF COMMUNICATION AND TRANSPORT

BOARD OF |DIRECTORS

t~ ~ GEEA MANAGER|

INTERNAL AUDITOR CORPORATION SECRETARC

CLAIMS AND INSURANCE ITY

. ~~ ~~ _ _ C- OF FINANCE DIRECTOR OF MANPOWER COMMERCIAL DIRECTOR OF MAINTENANCE DIRECTOR OF Al;itnG DEVELOPMENT AND DIRECTOR AND ENGINEERING OPERATIONS ADtIlNISTRATION

- MANPOWER DEVELOP- o PASSAGER o MAINTENANCE & OVERHAUL * OPERATIOIIS PLANNII

..'. D EXPEtIDITURE llENT o CARGO o QUALITY CONTROL & o FLIGHT TECHNICAL AE PLA;NI;G a ADMiINISTRATION o GROUND HANDLING INSPECTION o SYSTEMS CONTROL tII IFO? ATION o MOTOR TRANSPORT o CATERING o ENGINEERING DEVELOPMENT o COMmUI CATI3t; DAGTA FROCESSIiIG o MARKETING A.iD PLANNING * FLIGHT OPERATIONS ° MATERIALS, PURCHASING£ STORES Attachment

129

TANZANIA

Transport.Sector Memorandum

List of Persons Met

Ministry of Conmnunication & Transport

0. Ongara Principal Secretary L. Mollel Director General of Civil Aviation F. Minja Director of Planning Unit R. Hofmeier Tanzania Advisory Group J.R.B. Blari Economist in Planning Unit

Ministry of Works

P.J. Mkanga Director of Planning F. Barozi Director of Roads Division T.A. Walkerw Advisor to Senior Road Maintenance Engineer B.G. Urio Senior Engineer - Design of Roads A.M. Choto Road Maintenance Engineer W.A. Lyatuu Planning Engineer

Prime Minister's Office

S.J. Galinoma Deputy Principal Secretary "Regional Administration"

Ministry of Planning & Economic Affairs

E. Mbuya Commissioner for Sectoral Planning H. Kimolo Principal Economist in Charge of Infrastructure Ministry of Finance

A. MSakenya Commissioner for Revenues F. Byabato Senior Finance Officer

Ministry of Manpower Development

Mashamba Director of Manpower Planning & Placement Muinimusa Director of Manpower & Development Pl.inning Nyakirensani Director of Tranining of Recruitment 130

Ministry of Education

Mugogo Director of Sectoral Planning Marango Chief of Sectoral'Planning

Air Tanzania Corporation

H.B. Mwapachu General Manager T. Chacha Corporate Planning Manager C. Mrema Corporate Planning Officer

Tanzania Railways Corporation

E.N. McKoi Chief Mechanical Engineer K.S. Mtwangi Assistant Chief Traffic Manager P.J. Kjesi Chief Civil Engineer B. Mgumba Manpower Development Manager

Tanzania Harbour Authority

P.C. Bakilana General Manager D. Nuikumwawi Director of Planning

National Transport Corporation

M.E. Sanare Managing Director J.E. Moshi Director of Transport Coordination K. Natarajan Vehiele Imports Advisor K.M. Reddy Financial Controller

Bank of Tanzania

J. Bulemela Director Import Licensing J.H. Kilato Manager Import Date & Analysis D.T. Kinabo Foreign Exchange Manager M. Mbonela Assistant Foreign Exchange Manager

National Insurance Corp.

B.P. Mbuya Director General of Insurance

Transport Licensing Authority

A.R. Mbelwa Chairman P.S. Nhigula Deputy Chairman 131

National Milling Corp

R. Chowdhuri Director of Transport

Tanzania Cotton Authority

M.A.M. Maro Planning Manager

State Motor Corporation

H.H. Iddi General Manager

UNDP

Ph. Raynolds Deputy Resident Representative

British High Commission

G.A. Williams First Secretary (Development)

Canadian High Commission

R.B. Snyder First Secretary C.C. Swords Third Secretary

E.E.C.

B. Haffner Commission Delegate J.C. Heyrand Advisor to Delegation

JAICA

H. Dunnoura Technical Assistant

The Coast Region Transport Co-Operative (CORETCO)

J. Mhina General Manager

Mikoani Forwarders Limited Transport (Cargo & Passenger Transporters)

S. Mwaliwenli Chairman & Managing Director J. Mwampako General Manager Tanzania Industrial Studies & Consulting Organization (TISCO) 132

I.V. Laursen Senior Consultant Holmberg Consultant

US AID

J.B. Goodwin Chief Agricultural Division A.R. de Gamboa Economist

SIDA

G.B. Andersson Deputy Head of Swedish Development Corporation Office in Tanzania

Embassy of The Federal Republic of Germany

M.K. Ruhlmann First Secretary in Charge of Economic Corporation

SCANIA (SaaS-Scania Tanzania Branch)

R. Stein General Manager C. Ljungner Marketing Manager

TAMCO (Tanzania Automobiles Manufacturing Company Ltd.)

T. Johansson General Manager

Tanzania Road Haulage Co.

M. Anwar Director