Eindhoven University of Technology

MASTER

Road transport in : Leyland DAF Tanzania Ltd. assessment condition of trucks and buses private road haulage sector

Gnoth, M.J.

Award date: 1994

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Leyland DAF Tanzania Ltd. Assessment condition of trucks and bus es Private road haulage sector

Written by: M.J. Gnoth

Supervision: Dr. P.E.Lapperre Ir. H. Toersen Dr. Ir. A.M.C. Lemmens

M. Sc. thesis "International Technological Development Science" Eindhoven University of Technology, May 1994 Preface

This report comprises the results of a research I carried out at Leyland DAF Tanzania Ltd. in , Tanzania. The research was executed from May to November 1993 to obtain a M.Sc. degree in "International Technologkal Development Science" at the Eindhoven University of Technology. The results of this research can be of relevanee to Leyland DAF Tanzania Ltd. and can also be used in the framework "Industrialization of Tanzania" of the central research of my research group. Finally, the recommendations made w.r.t. the private road haulage sector, can be implemented by governmental institutions in Tanzania.

I like to thank the persons who helped me finishlog my research. I could oot have done it without their support. First of all, I would like to thank Mr. John Hale, Managing Director of Leyland DAF Tanzania Ltd. for bis hospitality by offering me a place within bis company to carry out my research. I would like to thank him for bis support and advice and for the open and warm conversations. I would also like to thank all the employees of Leyland DAF Tanzania Ltd. for their cooperativeness and their friendsbip durlog my stay in Tanzania. The road haulage operators have helped me tremendously, by giving their information in interviews. I would Iike to thank them for their help.

Last but not least I would Iike to thank Annet, who helped and supported me in Tanzania as well as in Holland. Contents

Page

1. Summary and brief review of conclusions • • • • • • • • • • • • • • • • • • • 1 1.1 Summary ...... 1 1.2 Brief review of conclusions ...... 2

2. Theoretica) framework ...... 3 2.1 Problem setting ...... 3 2.2 Research questions ...... 5 2.3 Aim of research ...... 7 2.4 Methodology ...... 7

3. General infonnation on Tanzania . • • • • • • • • • • • • . • • • • • . • • • • 9

4. Economie policy w.r.t. road transport in Tanzania • • • • • • • • • • • • 11 4.1 Period 1961-1966 (towards socialism) ...... 11 4.2 Period 1967-1981 (socialism)...... 12 4.3 Period 1982-1993 (from socialism' towards economie Iiberalization) ...... 15 4.4 Current state of economie liberalization w.r.t. road transport ...... 17 4.4.1 Active exchange rate management ...... 17 4.4.2 Trade liberalization ...... 18 4.4.3 Adjustment of interest rates ...... 19 4.4.4 Price deregulation ...... 19 4.4.5 Public expenditure restructuring ...... 20 4.4.6 Promulgation of an investment promotion policy ...... 20 4.4.7 Rolling Plan and Porwarding Budget for Tanzania (RPFB) 1993/94- 1995/96 ...... 21

5. Leyland DAF Tanzania Ltd. • • • • • • • • • • • • • • • • • • • • • • • • • • 23 5. I Introduetion ...... 23 5.2 History ...... 23 5. 3 Characteristics ...... 25 5.3.1 Organizational characteristics ...... 25 5.3.1.1 Departments ...... 25 5.3.1.2 Organisational structure ...... 28 5.3.1.3 Employees ...... 30 5.3.1.4 Forms ...... 31 5.3.2 Operational characteristics ...... 32 5.3.2.1 Vehicle specifications ...... 32 5.3.2.2 Vehicle sales ...... 33 5.3.2.3 Workshop ...... 34 5.3.2.4 Assembly ...... 35 5.3.2.5 Parts ...... 35 5.3.2.6 Lay-out and equipment ...... 36 5.3.3 Financial characteristics ...... 39 5.3.3.1 Profit analysis ...... 39 5.3.3.2 Nett value added ...... 41 5.3.4 Market-oriented characteristics ...... 42 5.4 Repair & maintenance at Leyland DAF Tanzania Ltd...... 46 5.4.1 Vehicle stock ...... 46 5.4.1.1 Specification of Leyland DAF vehicles ...... 47 5.4.1.2 Condition of vehicles ...... 49 5.4.2 Analysis of R & M activities ...... 50 5.4.2.1 Repair & Maintenance ...... 51 5.4.2.2 Services ...... 52 5.4.2.3 Labour time for services ...... 54 5.4.2.4 Standard operations and major repairs ...... 55 5.5 Leyland DAF Tanzania Ltd. and economie liberalization ...... 56 5.6 Conclusions ...... 59 6. Assessment condition of trucks and buses • • • • • • • • • • • • • • • • • • 61 6.1 Introduetion ...... 61 6.2 Maintenance theory w.r.t. trucks and buses ...... 61 6.3 Maintenance w.r.t. trucks and buses in Tanzania ...... 69 6.4 Aspects for condition assessment ...... 71 6.5 The desirabie condition in various settings in Tanzania ...... 72 6.5.1 Leyland DAF Tanzania Ltd...... 72 6.5.2 Public road haulage and passenger transport companies ...... 72 6.5.3 Large private road haulage operators ...... 72 6.5.4 Small private road haulage operators ...... 72 6. 6 Development of a system for assessing the condition of trucks and buses ...... 73 6. 7 Implementation of checklist Condition of Vehicles ...... 74 6. 7.1 Practical relevancy ...... 74 6.7.1.1 Leyland DAF Tanzania LTd ...... 74 6.7.1.2 Fleetowners ...... 75 6. 7.2 Implementation of the checklist Condition of Vehicles in a public passenger transport company ...... 7 5 6.8 Conclusions ...... 76

7. Private road banlage sector • • • • • • • • • • • • • • • • • • • • • • • • • • • 77 7.1 Introduetion ...... 77 7.2 General information ...... 77 7 .2.1 Transport sector ...... 77 7 .2.1.1 Road transport sector ...... 78 7 .2.1.2 Rail transport sector ...... 79 7 .2.1.3 Marine transport sector ...... 80 7 .2.1.4 Civil aviation transport sector ...... 80 7.2.2 Road haulage sector ...... 81 7 .2.2.1 Intra-regional road haulage ...... 81 7 .2.2.2 lnter-regional road haulage ...... 82 7 .2.2.3 International road haulage ...... 83 7 .2.2.4 Governmental regulations on trucks ...... 85 7.3 Problem definition ...... 87 7.4 Private road haulage information to be obtained ...... 88 7.5 Methodology for survey ...... 88 7.5.1 Sample ...... 88 7.5.2 Development of questionnaire ...... 89 7.5.3 Data collection ...... 89 7.6 Results of survey ...... 90 7 .6.1 General specifications of the companies ...... 90 7 .6.2 Truck fleet ...... 92 7.6.3 Cargo ...... 95 7.6.4 Customers ...... 96 7 .6.5 Opinions ...... 96 7. 7 Current bottle-necks in private road haulage ...... 99 7.8 Effects on the economy ...... 101 7.9 Conclusions and recommendations ...... 103

8. Literature • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 105

Appendix (separate document)

A Job descriptions B Internal forms C Checklist condition of vehicles D Checklist condition of vehicles adjusted for UDA E Questionnaire private road haulage sector F Checklist truck fleet G Print out survey private road haulage sector Chapter 1: Summary and brief review of conclusions 1

1. Summary and brief review of conclusions

1.1 Summary

This report consists of three parts. The first part deals with Leyland DAF Tanzania Ltd. and the effects of the economie liberalization in Tanzania on this enterprise. The second part deals with the assessment of the condition of trucks and buses in Tanzania and the design and implemeotation of an "assessment of condition of vehicle" tooi. An overview of the private road haulage sector with its bottie oecks and economie effects is completing this report.

Leyland DAF Tanzania Ltd. is au importer, assembler and repair & mainteoance enterprise of trucks and buses. lts major profits have shifted from the sales of vehicles to the sales of spare parts and repair & mainteoance. Repair & maintenaoce activities mostly consist of repair while maioteoance is of less importance.

Maioteoance in Tanzania is very much oriented towards failure based mainteoance. A policy of 'wait and see' is, in genera!, the current system of maioteoance. In the present situatioo, more preventive mainteoance is recommended. Assessing the condition of trucks and buses is usually a subjective exercise. Since vehicles are often in a poor state of mainteoance in Tanzania, a precise assessment of the condition is necessary. A checklist was developed to execute this assessment as "objectively" as possible. The objectively checklist was implemeoted at UDA, the public bus company of Dar es Salaam in Tanzania.

The private road haulage sector, as part of the transport sector, plays an important role in the Tanzanian economy. It is estimated that over 70 % of the 2.5 billion ton-km of freight movement in Tanzania is by road transport. To obtain information about the private road haulage sector, a survey was conducted among twenty private road haulage companies. Three types of traftic movement were distinguished: intra-regional, inter-regioDal and international. Most of the twenty road haulage operators interviewed were operating in the international sphere haulage. Their main problems were found to be over competition and high operational costs. Overloading of trucks was done to increase turnover, among others to compensate threatening losses. This overloading was an area of tension between the government and the road haulage operators. 2 Chapter 1: Summary and brief review of conclusions

1.2 Brief review of conclusions

. . . ·.· . "' Financial difficulties of transport operators. tbe main customers of Leyland DAF Tanzania Ltd .• caused a considerable drop in sales ofvehicles since 1992. These difficulties were mainly caused by over competition and the devaluation of the ~ The shift from a sodalistic orientedpolicy toa more liberal economie policy did not result in benefits for Leyland DAF Tanzania Ltd. On the contrary, it affected tbe enterprise in a negative way.

The designed checklist for the "assessment of the condition of vehicles" proved to be effective to identify problems of individual trucks and buses and to gain a reliable insight in the state of maintenance of vehicle fleets.

The following ~ajor bottie necks were identified in the private (international) road haulage sector: Too much competition within the private road haulage sector. Operational costs are too high. Trucksare overloaded and obscure governmentallimits are exceeded. Difficult to obtain (investment) credits. Infrastructure is inadequate. Collapse of official inter-regional road haulage of crops.

Suggestions for impravement of the bottie necks are, among others.: ·improve service and handling at Dar es Salaam port improve infrastructure decrease taxes on imported spares for the road transport· sector make transport regulations more clear and impierneut the regulations strictly and consequendy - · ease the purchase.of investments,credits .· .....·.. . . The economie importanceof tb~ private road haulage sector is retlected in its role ~:

1. forex earner 2. tax contributor · 3. employment creator 4. ·· foreign.ill.vestment attractor

Tbe sector also: ·· ·

5. .·. impraves the internal flow of goods and produce 6. enhances competition in imported goods 7. guarall.tees part of tbe. nation wide energy (fuel) distri bution 8. enhances diversification of economie activities 9. incorporates Tanzania.in international networles 10. stimulates high quality teehilical services . ll. improves efficient use of port and airfacilities 12. stimulates öther suppliers to manufacture quality goods Chapter 2: Theoretica! framework 3

2. Theoretica! framework

This chapter first gives an exploration of the road transport sector in the problem setting, which results in an aim of research. The research is executed with research questions to achleve the aim of research. The methodology used finally presented gives an explanation of the procedures used for the collection of the necessary data.

2.1 Problem setting

Importance road transport Table 2.1 illustrates that road transport is an important sector in Tanzania.

Table 2.1: Percentage of total dornestic transported goods transported by road 70 % Total freight movement by road 2600 mill. ton-km of domestically transported goods in 1991 International road transport in 1991 535 mill. ton-km GDP contribution of Transport & Communications in 1992 49350 mill. Tsh. Share of GDP of Transport & Communications in total GDP in 1992 7.1 %

Important products, like fertilizer, fuel and container goods, are mostly transported by road. Heavy road haulage, transporting these products, is the only transport mode to transport those and other goods to the various places all over Tanzania. Railways are limited to the TAnzania RAilway going Southwest to Zambia and the Tanzanian Railway Corporation going North - Northwest Waterways are limited to Lake and some transport by sea to Tanga harbour. Together, railways and waterways have the remaining 30 % share in total domestically transported goods, which shows that road transport is dominant. The flexibility of road transport with respect to routes and destinations is very important in this case. Direct effects of road trans­ port on the Tanzanian economy, like share in GDP, employment creation, etc. can be shown. Indirect effects, like energy distribution and stimulation of local suppliers, however, also exist but are more difficult to quantify.

Role of the government In 1967, six years after the independenee of Tanganyika, a policy of nationalization had been introduced (Tanganyika and were unified in 1964 to Tanzania). With respect to the transport sector, the import and export of crops were nationalized. Ten years later, the government introduced a new policy which affected the road haulage sector. The State Motor Corporation was founded. Buying and selling of trucks was controlled by the S.M.C. which meant that vehicle importation became state business. With the foundation of the National Transport Company, the transport of goods also became state business. Regional Transport Companies (RETCOs) under the N.T.C. had a monopoly in transporting goods in the regions. This situation ended in 1982-1983 when a new government introduced a more liberal economy. Public transport had no competition during the policy of nationalization, but the change towards free competition was dramatic.

Private versus public ownership Before the liberalization, there were hardly any private haulage operators. This situation changed completely through free competition. Wben expressed in ownership of trucks, 78 % of all trucks in Tanzania is now owned by private haulage operators, 4 % is owned by the NTC and it's RETCOs, and 18 % is owned by other public companies and parastatals. This shows the importance of the private sector in the road haulage sector at the moment. Very little information is available with respect to the character and functioning of the private haulage sector. 4 Chapter 2: Theoretica[ framework

lnfluence govemment on road transport Despite the liberalization of the economy and the reduced influence of the government, laws and regulations for the road haulage sector are formulated by the government. New regulations e.g. must ensure that road haulage operators are not overtoading their trucks. The low fines on overtoading and the corruption of the system of cantrolling the weigbts, are making it attractive in the short run to overload trucks.

Technology context: trucks Tbe road haulage sector is using various types of trucks. Normally a tbree axle pulter is used wbicb is attached to a semi-trailer to haul two 20 feet containers. This because most of the cargo is transported by containers. Another option is a truck carrying one 20 feet container with a drawbar-trailer carrying another 20 feet container. There are also combinations carrying three 20 feet containers. These combinations have an overall length of about 24 roetres with a total weigbt of sametimes more than 80 tonnes.

State of the trucks The state of the trucks varles from very good to very poor. Most of the trucks bowever are in a poor or very poor state. There are a lot of old trucks wbicb need a lot of maintenance to keep them in a working condition. However, there are no "assessment systems" w.r.t. condition to verify the working condition. Tbe trucks are also degenerating very fast by the poor condition of the roads. A lot of trucks are operated with wom out tires and impraper ligbting. More serious probieros affecting the running condition of trucks occur frequently. Break downs, therefore, happen more often than in a country with better trucks and roads. Safety items on trucks also are frequently in a poor state. Brakes, steering etc., are items whicb should function correctly to ensure vebicle safety. Limited functioning of these items can have serious consequences.

Repair & Maintenance To maintain the trucks in a necessary state for proper functioning, repair and maintenance have to be carried out. In Tanzania, these activities are done by qualified workshops with qualified roeebanies as well as by layman workshops with inferior mecbanics. Tbis will affect the quality of the repair and maintenance. Tbe qualified workshops are more expensive whicb can be an obstacle for road haulage operators. A lot of road haulage operators have their own workshop with mecbanics. The quality of these workshops is sametimes doubtful.

Roads One of the reasons of the poor state of the trucks in Tanzania, can be found in poor roads. The state of the infrastructure is a severe problem. Some transport corridors are in a reasonable state, others are hardly passable in the rainy season. Tyre bursts caused by stone punctures, and wom out suspension and steering, are common probieros when driving trucks in Tanzania. Chapter 2: Theoretical framework 5

2.2 Research questions

The problem definition shows that the road haulage sector, particularly in economie terms, is an important one and that the sector faces a variety of challenges. From the problem definition three main research questions are derived.

The first concerns Leyland-DAF Tanzania Ltd. since this private company hosted my research. The second focuses on the assessment of the condition of trucks and links with my background of automobile engineering. The third deals with the largest part of the road hauling sector, the private sector and is of particular interest in the light of the ongoing economie liberalization process.

Leyland-DAF Tanzania Ltd. bas been selling and maintaining trucks and buses in Tanzania since independenee and as British Leyland even before that. As a private owned company it passed through all the stages from a strong government control on all aspects in the past to the present more Iiberal situation. The research questions with respect to Leyland-DAF Tanzania Ltd. are:

1. How is Leyland DAF Tanzania Ltd., as an importer, assembler and repair & mainten­ ance enterprise, adapting to and functioning in a situation of economie liberalization?

la. How did the economie policy, particularly with respect to road transport, develop and what is the current state of economie liberalization in Tanzania ?

lb. What are the main organizational, operational, financial and customer-oriented characteristics of Leyland-DAF Tanzania Ltd. ?

lc. How do these characteristics relate to the current state of economie liberalization?

ld. What is, as part of the customer oriented characteristics, the repair and maintenance situation at Leyland-DAF Tanzania Ltd. ?

Repair and maintenance was earlier identified as an important problem in the road haulage sector in general and also features prominently with Leyland-DAF Tanzania Ltd. Assessment of condition is a pre-requisite for efficient and effective repair and maintenance. Starting from the situation of Leyland-DAF Tanzania Ltd., the research questions with respect to the assessment of the conditions of trucks and buses are: 6 Chapter 2: Theoretica/ framework

2. How can an "objective" system to assess the condition of trucks and buses be designed in order to maintain or achleve a satisfactory condition of trucks and buses in specific settings?

2a. What is "condition" of trucks and buses?

2b. Which aspects on trucks and buses have a significant influence on the condition?

2c. What is an "objective" system in the context of assessing condition of trucks and buses?

2d. What does maintaining and achieving a satisfactory condition of trucks and buses mean?

2e. What are the major aims of maintenance ?

2f. What is a satisfactory condition in the following settings: Leyland-DAF Tanzania Ltd. public road haulage and passenger transport companies big private road haulage operators small private road haulage operators

2g. How can the elements of satisfactory conditions for the specific settings be incorporated in a manageable system ?

2h. Can such a system be introduced into anyone of the specific settings ?

With the information collected at Leyland-DAF Tanzania Ltd., including the information on vehicle condition assessment, a link can be made between the enterprise level and the sector level. A fair amount of information is available with respect to the (traditional) public sector in road haulage. Very little is, however, known about the (more recent) private sector in road haulage. The research questions with respect to this private sector are:

3. What are the characteristics of the private road haulage sector and what is the importance of this sector in the ?

3a. What characteristics of the private road haulage sector are relevant to obtain ?

3b. How can the relevant characteristics of the private road haulage sector be obtained and assessed ?

3c. What is the direct economie importance of the private road haulage sector and how can this importance be assessed ?

3d. What is the indirect economie importance of the private road haulage sector and how can this importance be assessed ? Chapter 2: Theoretica/ framework 7

2.3 Aim of research

The aim of research can be divided into three goals, corresponding to the three subjects and main research questions, which are discussed in three separate chapters.

The first goal is to provide Leyland DAF Tanzania Ltd. with an overview of its organization and operadons and an analysis of the effects of the economie liberalization on its overall functioning.

The second goal is to provide Leyland DAF Tanzania in particu/ar and the road transpon sector in general with a structural means ofimproving the condition offleets ofvehicles. This is done by the compilation and introduetion of a "condition assessment method".

The third goal is to provide CICAIITO in particu/ar and interested parties in Tanzania in general with an overview of the private road haulage sector, an analysis of its major bottie necks and a first indication of the economie imponance of this sector.

2.4 Methodology

Each of the three research questions had their own methodological approach.

The methodology related to the first research question is discussed in chapter 5: Leyland DAF Tanzania Ltd. An overview of this enterprise is made by collection and analysis of data on organizational, operational, financial and market characteristics. Special emphasis will be given to repair and maintenance aspects in order to facilitate the compilation of an "assessment of condition of vehicles" tooi. Finally, Leyland DAF Tanzania as emerging from the overview of the enterprise, will be analyzed against a background of a slowly but steadily developing policy of economie liberalization in Tanzania.

The methodology related to the second research question is extensively discussed in chapter 6: Assessment of condition of trucks and buses. On basis of a review of general maintenance theories and preliminary field observations, a checklist is developed to assess the condition of vehicles in a way as objective as possible. The resulting checklist is put to trial at Leyland DAF Tanzania Ltd. on a limited scale, modified where necessary, and then used with a number of vehicles of one of the larger vehicle fleets in Dar es Salaam. The experience gained with using the checklist with one of the larger vehicle fleets is assessed and the checklist is again modified, resulting in a final version.

The methodology related to the third research question is extensively discussed in chapter 7: Private road haulage sector. On basis of consulting literature, field observations and preliminary discussions with experts in the particular field, elements important for the private road haulage sector are identified. These elements are incorporated in a questionnaire. The size of the population of private road haulage companies is determined and a sample size is set. lf formal statistical techniques are difficult to imptement (lack of sector data, Jack of collaboration of companies), other approaches will be decided upon in the field. All companies in the sample are approached with the questionnaire. Answers to the questions are used for description of the sector and an analysis of bottie necks. Chapter 3: General information on Tanzania 9

3. General information on Tanzania

Since this research is dealing with road transpon in Tanzania and was carried out in Tanzania, it is inevitable to know something about Tanzania in general. With this information, the research can be placed in the proper context.

The United Republic of Tanzania is a country with a wide variety of land forms, climates and peoples. The country includes the highest and lowest pans of Africa; the summit of (5,895 m above sea level) and the floor of (358 m below sea level). The country is hordered by in the nonh, , , and Zaïre in the west, Zambia and Malawi in the south-west, in the south and the in the east. lts size is 945,087 km2 of which 52,000 km2 consists of inland waters• (see tig 3.1: Map of Tanzania). This is a little smaller than France and Spain combined. The main upland areas occur in a nonhem belt, a central and southem belt and a nonh-south undulating belt. Much of the rest of inland Tanzania is made up of gently sloping plains and plateaux broken by low hili ranges and scattered isolated hills. The coast includes areas with sweeping sandy beaches and with coral reefs. Temperatures correspond with the altitude in Tanzania. The coastal areas have a tropical elimate while the highlands have a more moderate climate. For much of the country most rain falls in one rainy season, December-May, though two peaks of rainfall in October-November and April-May are found in some areas.

Tanzania had a total population of approximately 25.2 million in 1991. The annual growth rateis 2.8 % and the life expectancy at binh is 49 years. Most of the Tanzanian peoples are Africans, although people of Indian and Pakistani ancestry make up a significant pan of the urban population. In 1988, 18 % of the population was living in urban areas. The capital is Dar es Salaam with a population of 1.2 million. Other principal towns are , Tanga, , Moshi, and . Dar es Salaam is the main pon, the dominant industrial centre and the focus of govemment and commercial effon, although the administrative functions of the capital city are in the process of being transferred to Dodoma. There are more than 120 ethnic groups in Tanzania, of which the largest are the Sukuma and the Nyamwezi. None, however, exceeds 10 % of the total population.

For few African countries the pre-colonial period is of greater relevanee to recent history than for the United Republic of Tanzania, formed in 1964 by the union of the Republic of Tanganyika (mainland) with the revolutionary regime in the former island (consisting of Zanzibar island and ). Long before this unification, Tanganyika, as pan of German , was an important colony of Germany. In 1885, Germany declared a protectorate over limited areas of the mainland, in support of the Company. After several revolts, German rule was finally secured with the death of the chief and resistance leader of the Hehe people in 1898. This situation was retained until after Germany's defeat in the First World War. By 1916, the British and their allies already had gained control of most of German East Africa. The territories now comprising Rwanda and Burundi were occupied by Belgium and were then detached from the territory that became known as Tanganyika, over which the British were allocated a League of Nations mandate. Since Great Britain had far richer colonies, it neglected the country. After 1945, the mandate was superserled by a United Nations trusteeship. On 9 December 1961 Tanganyika became independent and the Tanganyika African National Union (TANU) of Dr. Julius Nyerere took over political rule. The unification with Zanzibar and the 1 foundation of Tanzania was accomplished on 22 April 1964 •

1 All st.1tistics by Bureau of Statistics, Dar es Salaam

2 More information on recent history and economie poliey of Tanzania since independenee can be found in Chapter 4: Economie poliey w.r.t. road transport in Tanzania. 10 Chapter 3: General information on Tanzania

In 1967, wben tbe Arusba declaration was stated by tbe T ANU, Tanzania entered an era of socialism. Tbe policy, whicb was tben introduced, was striving for self-reliance on a sodalistic basis. This meant tbat tbe production bad to come from farmers and labourers. Special Ujamaa villages were establisbed to realize this goal, but tbe policy bas never been as successful as Nyerere bad boped. He remained president until 1985 and was succeeded by tbe former president of Zanzibar, Ali Hassan Mwinyi, who was tben tbe cbairman of tbe Chama Cba Mapinduzi (CCM). This party resulted from tbe political unitication between tbe Afro-Shirazi party of Zanzibar and tbe T ANU party of tbe mainland.

Since 1982, tbe economie policy bas cbanged towards economie liberalization. Several economie crises forced tbe government to do so. lt shifted tbe empbasis from agriculture to otber sectors like transport. The new policy resulted, amongst otbers, in trade liberalization, free competition and privatization. Tbe effects on tbe economy and on tbe people are considerable. A lot of products are available now but at high prices since tbey are imported. Tbe latest move in liberalization is tbe agreement of tbe government witb a multi-party system to establisb a democratie government. It is planned to introduce tbe first general elections this year.

Figure 3.1: Map of Tanzania

J. (!!) CO(Jper G) T.n 'I' Mam flitDOrt + Airoc-r~s Q Lead 0 Otamnnds $1/ver () Tungsten 0 Mie., Chapter 4: Economie policy w. r.t. road transport in Tanzania 11

4. Economie policy w.r.t. road transport in Tanzania

Tanzania bas experienced different kinds of economie polides in its recent history. Looidog at the period from independenee of Tanganyika in 1961 and the foundation of Tanzania in 1964 until now, economie policies from strong socialism until economie liberalization have been iotroduced. The curreot state of economie liberalization in Tanzania caooot be seen without placing it in the context of preceding policies. Therefore, this chapter will first present a review of the economie policy sioce independeoce. Special attention will be given to the aspects which affect the road transport sector.

4.1 Period 1961-1966 (towards socialism)

Independenee The independenee of Tanganyika on 9 December 1961 was the start of a process of politicaland economical changes. When Tanganyika joined Zanzibar to become the Uoited Republic of Tanzania on 22 April 1964, the Tanganyika African National Uni on (T ANU) gaioed power to rule the country because TANU had won the multi-party elections on the mainland in 1958-1959. Zaozibar, however, remained politically almost independent after the uoification. It was politically ruled by the ASP (Afro-Shirazi Party) which merged with TANU in 1977. TANU's president, Dr. Julius Nyerere, established a one-party state in 1965. TANU became Tanzania's sole politic party with the ASP on Zanzibar and Nyerere became Tanzania's leader.

First Five Year Plan The first comprehensive presentation of the country's development policy after independenee was made in the First Five-Year Plan for Economie and Social Development (FFYP) in 1964. This plan was to be effective until 1969. The FFYP focused on industrial development, agricultural development and acceptance of a high dependenee on foreign ioitiatives. The industrial develop­ ment was to be achieved by private investment supported by Governmeot infrastructure. The agricultural development was to be stimulated within the context of the existing structure of rural economie organisation. Durlog the FFYP period, the acceleration in investment, which was also accompanied by considerable expansion of public services, was achieved without running down foreign currency resources ór accepting ao excessive burden of external debt. Still, this FFYP had to be abandoned in 1966, partly because the foreign ioitiatives and aid required did oot emerge. There were also differences of opioion within the governmeot on the direction of the economie and social policies.

GDP growth rates The FFYP aimed to achleve a growth rate of 6. 7 % per aonum for the whole ecooomy. A growth rate of 4.3 %, however, was realized. The plan also wanted to reduce the dominanee of agriculture and mioing in the GDP to 50 % and raise the contribution of industry to 7.5 % by the end of the plan period. There was an over-reaction to this goal. The share of agriculture in GDP decreased from 52.3 % in 1964 to 43.2 % in 1969 and the share of iodustry rose from 6.6 % to 10 % over the same period. With respect to the transport sector, efforts were made to improve trunk roads and feeder roads. 12 Chapter 4: Economie policy w.r.t. road transport in Tanzania

4.2 Period 1967-1981 (socialism)

The In 1967, Tanzania's definite direction on economie and social policies was stated. The Arusha Declaration publisbed in that year by the TANU, showed that Tanzania was entering a social­ istically oriented period. The two main themes of the Arusha Declaration were socialism and self­ reliance. The policy of Ujamaa (family spirit) was the key factor. The implementation of this new socialistic policy foliowed immediately; all banks were nationalized, as well as most major dornestic companies. The government also wanted a major share-holding in foreign owned companies in Tanzania. Insurance policies had to be taken out by a government-enterprise. The development of Tanzania had to come from its own people and means, not from foreign aid. The key for success was to be found in the rural areas. Agriculture was to be stimulated and rural development must not come through large farms but through community villages (ujamaa villages). Egalitarianism was very important, meaning that the educational system was to serve the mass of the population and that the major means of production, agriculture, industry or others, were to be under control of farmers and labourers.

Second Five Year Plan The Second Five Year Plan (SFYP), effective from 1969 until 1974, was a detailed programme which aimed to imptement the principles set out in the Arusha Declaration. The main principles were: 1. Social equality spreading the benefits of development widely through out society to avoid large disparities in income and wealth. 2. Ujamaa encouraging development of economie activ­ ities undertaken through collective and co-ope­ rative efforts. 3. Self-reliance development through maximum mobilization of dornestic resources, particularly through the mobilization of the people. 4. Economie and Social Transformation - rapid expansion of productive capacity to cre­ ate the basis for future economical and social transformation. 5. African economie integration extension of economie co-operation with other African states.

The SFYP envisaged an average annual GDP growth rate of 6. 7 % but this was not achieved. The actual annual GDP growth rate tumed out to be a mere 4.8 %. With respect to the transport sector, the major task of the SFYP was to establish the Tanzania-Zambia road and railway (T AZARA) for which heavy investments were made. For this purpose Tanzania received aid from the Peoples Republic of China.

Govemment control Imports were reduced because of the policy of self-reliance. Control on imports was carried out by import licensing and exchange controL Besides, import licensing became an activity of the . Import licensing on vehicles was assigned to the newly founded State Motor Corporation (SMC). The state Motor Corporation became the sole organization for import of vehicles and the distribution to vehicle dealers. The corporation also decided on the number of imported vehicles for every make and dealer. The SMC, as controller of the truck and bus market, divided the market into three sector. Licenses were issued for specific dealers and makes for: the light-range up to 7 tons carrying capacity (CC), the middle-range with 7 up to 15 tons CC and the heavy-range of 15 ton and above. By this measure, competition was eliminated. Cus­ tomers, however, had to apply foranimport license with the SMC to buy a truckor bus. With a monopoly on issuing import licenses, the SMC could favour specitic customers. In line with the national policy, co-operatives and (ujamaa) villages were favoured with import licences. Chapter 4: Economie policy w.r.t. road transport in Tanzania 13

Declining import of vehicles Durlog the SFYP period, the number of trucks, passenger buses and cars operating was declining year after year. Partly because most transport operators were finding it difficult to manage the transportation business, due to the following reasons: rise in prices of trucks and spare parts; shortage of foreign exchange for importation of new trucks and spare parts; rise in oil prices; fares and freight rates did oot cover operational costs; inadequate operational skill and Jack of discipline; bad condition of roads. These problems, logether with the tightened and controlled import of trucks, buses and spare parts, had a significant effect on the number of imported trucks and buses. Statistics on trucks are available from 1973 onwards. We can, however, get an indication on the decline of imported trucks and buses by looking at the imported cars in the period 1969-1974. Table 4.1 shows that the overall decline of imported cars durlog the SFYP period was more than 50 %.

Table 4.1: Imported cars 1969-1974 year 1969 1970 1971 1972 1973 1974

number of imported cars 3038 2593 1716 343 1401 1414

Source: Bureau of Statistics, Selected statistica! series

Pubtic sector domination Until 1973, road transport was the domaio of the private sector. The period thereafter witnessed an increasing participation of the public sector in transport business. This change of policy in favour of pubtic sector participation, was in unisou with the Ujamaa policy. Shortages of supply of road transport services, due to the problems mentioned above, and implementation of the Ujamaa policy, led to the establishment of a National Transport Company (NTC). This parastatal organization, functioning under the Ministry of Transport and Communications, was to coordinate the Regional Transport Companies (RETCOs). These RETCOs competed with private transport operators but were favoured by the government. Since the Five Year Plan policies put emphasis on agricultural development, the RETCOs were frequently brought into action for erop transportation. For passengers transport, the National Bus Company in Dar es Salaam (UDA) and the National Bus Service (KAMATA) fortherest of the Tanzania, had a monopoly in transporting passengers. Co-operative Union's, established by the government and buying crops from farmers and villages, often had there own transport wings. These co-operatives were a major channel in the purebase and sale of both food and cash crops and in the distribution of inputs and farm equipment.

Balance-of-payment crisis 1974-1975 At the end of the SFYP in 1974, Tanzania slid into its first major crisis. lt entered the most difficult economie situation it had to face since independence. In 1974, there was a fourfold unprecedented increase in the price of oil in the world markets. Other imports also increased in price. The severe food-grain crisis, which foliowed the 1974-1975 crisis, only worsened the balance of payment crisis. The result was that Tanzania faced a heavy increase in expenditures and a decrease in revenues. Due to the unfavourable economie conditions at that time, the Third Five Year Plan was postponed for two years until 1976. Despite the balance of payment difficulties in those two years, the growth of the GDP was comparable with earlier years: 4.6 % and 5.2 %.

The direct measures with respect to road transport, followiog the balance of payment crisis, were higher taxes on gasoline and the tightening of existing limitations on access to private cars. This crisis and the following measures significantly influenced the import of trucks and buses. Table 4.2 shows the truck and bus import statistics. Between 1974 and 1976, import of buses declined with 75 % and the import of trucks with 40 %. After 1976 the decline of imports was over , but the public transport sector as well as the private transport sector were still having difficulties to operate. 14 Chapter 4: Economie policy w.r.t. road transport in Tanzania

Table 4.2: Import statistics of trucks and buses

Year imported trucks imported imported including buses trucks "four wheel drives"

1973 145 1461 1974 328 1953 1975 188 1233 1976 83 1149 1977 219 2741 1978 594 5425 1979 615 6289 1980 424 3657 1981 252 3775 1982 320 2235 1983 302 994 1753 1984 370 2467 3536 1985 707 3782 5493 1986 588 4751 7111 1987 630 4513 6931 1988 893 6752 11832 1989 601 4086 6862 1990 991 6445 8830

Source: Bureau of Statistics, Selected statistica! series & Statistica! abstract 1991

Third Five Year Plan period With the introduetion of the Tbird Five Year Plan (TFYP) 1976-1981, the economie decline of the balance-of-payment crisis, could oot be stopped. The main objectives of the first two five year plans were continued in the TFYP with some practical adaptations. The GDP growth to be achieved was set at 6 % per annum. Under the Treaty for the East African Co-operation, signed in 1967, the railways, harbours, airways and postal and telecommunication services were jointly owned by Kenya, Uganda and Tanzania. Co-operation in providing these jointly owned public services deteriorated over the years. In 1977, the East African Co-operation collapsed and Tanzania founded its own corporations servicing transportation and communication. The main objective for transport and communication in the TFYP was the impravement of institutions which should be responsible for providing transportation and communication services.

Balance of payment crisis early 1980s The stagnation of agricultural production, the failure of the public marketing and distribution system, the exorbitant political influence on the economie decisions and the lack of foreign currency, blocking every progress in industry and transport, were causes of severe economie difficulties. Tanzania, was also very dependent on foreign aid. In 1981, more than half of Tanzania's development budget originated from foreign sources, despite the policy of self­ reliance. These reasons, tagether with increasing prices of imports like oil and capital goods and decreasing agricultural export prices, caused another more severe balance-of-payment crisis in 1981 and 1982. The Fourth Five Year Plan (1981-1986) aimed to promote the industry, since most expenditures were allocated to this sector. Nevertheless, this plan had to be stopped due to the crisis and was replaced by the National Economie Survival programme (NESP), announced in March 1981. This programme proved to be insuftkient to solve the problems. In the mean time, the annual GDP growth rates feil to negative GDP growth rate of- 0.5 % in 1981, a positive GDP growth rate of 0.6 % in 1982 and a negative GDP growth rate of- 2.4 % in 1983. Chapter 4: Economie policy w.r.t. road transpon in Tanzania 15

4.3 Period 1982-1993 (from socialism towards economie liberalization)

In june 1982, a different strategy was initiated to cope with the crisis. In co-operation with the World Bank, the sodalistic economy was abandoned and replaced by a more liberal economy announced in the Structural Adjustment Programme (SAP). This three year program aimed to stimulate the productive sectors (particularly the private sectors and the main export crops), to curtail government spending and to relax price controls. The SAP was a start to further liberalization. Despite the slight growth of the GDP in 1984 with 3.4 %, the SAP was not capable of reversing the economie decline.

Since 1982, the International Monetair Fund (IMF) negotiated with the Tanzanian government for the necessary assistance to support the economy. The IMF in return wanted structural changes according the IMF policy in Tanzania. In 1986, an agreement was reached and Tanzania received financial support from the IMF which also meant an acceptance of the IMF policy. This IMF policy entailed: reduced influence of the government; more opportunities for private initiative; use of economie criteria instead of politica! criteria; realistic rate of exchange which meant significant devaluation of the T. shilling; stabie and more favourable balance-of-payment.

Economie Recovery Programme In June 1986, a new three year Economie Recovery Programme (ERP) was launched which was closely linked to the IMF agreement and to the associated new aid arrangements agreed with the World Bank. The main objective of the ERP was to reverse the economie decline. Key elements of the program were: increase agricultural output through appropriate price incentives, increase foreign exchange and budgetary resources to the sector and restmeture marketing channels for agricultural produce; increase capacity utilization in industry through the allocation of scarce foreign exchange to priority sectors and firms; rehabilitate the country's physical infrastructure; restore internal and external balances, through prudent fiscal, monetary and exchange rate management. The aim to achleve an average annual growth of GDP of 4.5 % over the three years was a little ambitious, but the actual GDP growth rates of 3.3 % in 1986, 5.1 % in 1987, 4.2 % in 1988 and 4.0 % in 1989 were improving with an average GDP growth rate of 4.1 % during the ERP period.

The ERP, however, had to cope with serious structural constraints in the Tanzanian economy. banking system with most of its assets tied up in non-performing loans to loss-making parastatals and incapable of mobilizing dornestic resources for productive investments; inadequate processing facilities and rigid and inefficient parastatal marketing channels for agricultural produce; significant erosion in the capacity of social sector institutions to provide an acceptable level and quality of service in education and health; severely deteriorated transport infrastructure and inefficient transport agencies.

The significant degree of public sector participation in transport is one of the reasons of the last constraint. Most parastatals were making losses or were generating low return on their assets as a result of inefficient utilization of capacity, high-fixed costs and sub-economie prices. Since the introduction, a process of privatization of parastatals bas started which is still not terminated. Privatization could be the solution to the problems in the parastatal organizations. 16 Chapter 4: Economie policy w.r.t. road transpon in Tanzania

A second problem was the lack of maintenance, conservation and development of the road infrastructure. Tbe condition of most roads was poor in the beginning of the 1980s. Tanzania was spending only 3-6 % of its total public expenditure on roads, where as 10-20 % is normal for countries with far better maintained road networks. Tbe non-availability of foreign exchange was also affecting the transport sector. Therefore, importation of new equipment, spare parts and items like fuel was hardly possible.

A well functioning transport system, however, is crucial to the sustained economie recovery of Tanzania. An optimal functioning of the agricultural sector cannot be achieved without the important support of the (road) transport sector to transport crops, inputs and materials. Tanzania realized that the agricultural sector should be promoted not only by supporting and financing that sector, but also by stimulating other sectors, like the (road) transport sector which are supporting the agricultural sector.

National Transport Policy The critical state of the transport sector made the Government decide to call a Transport Sector Donors' Conference in December 1987 in Arusha. At the Conference, a draft National Transport Policy (NTP) document was presented along with a Conference document "Transport Sector Recovery Programme" (TRP) which outlined the basic policy: institutional changes and rehabilitation requirements of the sector in order to re-establish the transport infrastructure and services to cater for the requirements of the economy. This policy and programme were in line with the recently effective ERP. Officially, the draft NTP was never transformed to a final report, but the Ministry of Transport and Communications is still working according this policy. Tbe NTP and the TRP are dominating the economie policy of the transport sector from that time until now and the programme of transport sector recovery is still not finished yet.

The objectives of the National Transport Policy are: concentration of future efforts on rehabilitation and maintenance of the basic road network; increase resource allocation to the transport sector, particularly for roads; improve the utilization of existing assets through improving the management and operations; adjust the institutional structure consistent with effectively carrying out the required rehabilitation, maintenance and operations.

Transport Sector Recovery Programme The practical priority areas of the TRP are identified as: increasing the economie life and availability of the existing public sector fleet tbrough prioritization and rationalization; support local production I reconditioning of bodies and components for the trucking sector; support impravement of the capacity of servicing facilities; support replacement of uneconomic transport units without an increase in the fleet per se.

The "own-funds imports program" and donor assistance for the import support program have helped the road transport sector significantly in revitalizing. Limitations on imports were loosened and the availability of foreign exchange for importation increased.

Under the Transport Sector Recovery Programme, several projects have been initialized. Tbe three major programs are dealing with road rehabilitation (lntegrated Roads Project), the modernisation of the (Port Modernisation Project 11) and the restructuring of the railways (Railway Restructuring Project). Chapter 4: Economie policy w.r.t. road transport in Tanzania 17

Recent plans and programmes The Fifth Five Year Development Plan, launched in 1989, favoured the transportand communi­ cations sector since it should receive 24 % of the total investments, compared to 19 % for agriculture and 10 % for industry. The Economie Recovery Programme, ending in 1989, was foliowed by the next recovery programme, the ERP 11. The economie policy of the first ERP was continued withits global aims of GDP growth of 5 % on average, intlation reduction to below 10 %, restoring internal and external balances in the economy and improving social service delivery. The actual GDP growth rates were somewhat bebind the targets, since the growth rates were 4.8 %, 3.9 %, 3.6 % and 3.9 % in 1990, 1991, 1992 and 1993 respectively but the economie decline of the early 1980s was reversed on a sustainable basis.

4.4 Current state of economie liberalization w .r.t. road transport

The current state of economie liberalization is a result of the numerous policy reform measures introduced since the start of the Economie Recovery Programme in 1986 and the economie changes following these measures. Liberalization was not implemented immediately. The liberalization programme started in quite a small way, for immediate complete liberalization would have involved the abandonment of all major, government controlled, institutions created since independence. 1t would also have entailed a high cost in social and political terms which the government was not prepared to risk. A beginning was made with partial liberalization of trade. Others measures followed. The major policy reform measures which are currently active and have contributed significantly to the economie recovery of Tanzania are: 1. active exchange rate management; 2. trade liberalization; 3. adjustment of interest rates; 4. price deregulation; 5. public expenditure restructuring; 6. promulgation of an investment promotion policy. These reform measures, .as aspects of the current state of economie liberalization, will be discussed in view of their contribution to the economie liberalization and to the intluence on the road transport sector. This will give an overview of the economie liberalization at the moment. Finally, an overview of the Rolling Plan and Porwarding Budget for Tanzania (RPFB) 1993/94 - 1995/1996 will be given.

4.4.1 Active exchange rate management

The exchange rate of the Tanzanian shilling with respect to foreign currencies, like the US Dollar, was unreal before the reform measures. Tanzanian intlation was four times higher than for Tanzania's major trading partners. Moreover, the shilling was traded on the black market at a rate between two and four times the official rate and export incentives had declined. For decades, the exchange rate was more or less fixed without adjustment to the market, but exchange rate adjustment was inevitable. Figure 4.1 shows the exchange rate development since 1976.

At the end of 1993, the exchange rate was about 460 Tsh. to the USD; a devaluation of more than 1000 % since the introduetion of the ERP in 1986. The devaluation bas led, among other things, to better competitiveness in export, interest of foreign investors, reduction of black market exchange and impravement of balance of payment. At the moment, a difference between official and black market rate hardly exists. A disadvantage for the road transport sector, is the increase in price of imported products (new vehicles, spare parts and fuel) but at present, the devaluation is not so dramatic as it was several years ago. Foreign investors are realizing an impravement of the road transport infrastructure, by projects in road rehabilitation and the foundation of new transport companies. 18 Chapter 4: Economie policy w.r.t. road transport in Tanzania

Tsh. to US Dollar 500

450

400

350

300

250

200

150

100 / / 50 --·-···"·

Year

Figure 4.1: Average exchange rates of Tanzanian shillings to 1 US Dollar, between 1976 and 1993.

4.4.2 Trade liberalization

The liberalization of the export trade and the import trade bas significant effects on the economy. With the trade liberalization, the availability of imported products increased, but the prices for those products increased significantly as well. For trading companies, in fact for all companies, new opportunities arose. The loosening of import licenses and the introduetion of own-funded imports, import support programmes and the export-to-import scbeme, opened new markets for companies to obtain their necessary imports. The support programmes eased the burden of high import prices and scarcity of foreign exchange.

Internal trade in Tanzania is also given new opportunities. There is more free competition and private initiative is expanding. The state owned corporations have to compete with private enterprises wbicb were founded or expanded during the policy of trade liberalization. For the road transport sector, limitations were partly abandoned. The restrictions on inter-regioDal trade were removed and now private road transport operators have mucb more opportunities to operate. But there still is, for example, a road and route license to be obtained. The road license is required for all commercial vebicles above 1 tonne and the route license is required for eacb single truck to operate in road baulage on a specific route in Tanzania. Chapter 4: Economie policy w.r.t. road transport in Tanzania 19

4.4.3 Adjustment of interest rates

At present, Tanzania bas much higher interest rates than before the economie liberalization. Table 4.3 shows the development of interest rates.

Table 4.3: Commercial banks principal interest rates 1983 1984 1985 1986 1987 1988 1989 1990 deposit 7.5% 7.5% 10% 10% 21.5% 21.5% 26% 26%

Source: Bureau of Slatistics, Slatistical abstract 1991

The interest rates have been increased to stimulate financial savings, to facilitate more effective utilization and allocation of resources and to reduce the inflation rate. Higher interest rates are more attractive for Tanzanian and foreign investors to deposit their money in Tanzania and will reduce the capital flight out of the country. For the road transport sector, realistic interest rates can attract new (foreign) investors. Reduction of inflation, by adjustment of interest rates, can be a means to a more stabie economy which could contribute to the success of the road transport sector. On the contrary, it becomes more expensive to borrow money locally and therefore investing becomes more difficult.

4.4.4 Price deregulation

Before the economie liberalization, a government policy of price control assured the Tanzanians to pay the official price, independent of shortages of the product. The end of the price control also meant the end of official prices for most customer goods. By deregulating the prices, the free market principle automatically replaced the price control, since the policy of trade liberalization and reduction of import Heences opened new markets in Tanzania and tilled the vacuum of deregulated prices.

The current prices are much higher than before the price deregulation. This enables enterprises to make profit on their sales but also increases the consumer prices heavily. Everything is available, but the prices are extremely high, especially for imported products. Some products are sold 4 to 7 times the CIF (Cost, Insurance, Freight) price. So high profits can be made by importers. These high profits can also stimulate local entrepreneurs to produce local substitutes for these imports in order to get a share of the high profits.

For the road transport sector, price increase can be a disadvantage. Prices for inputs, especially imported inputs, like fuel, tires and spare parts, have been increased tremendously. Overall, the road transport sector is better off with price deregulation, despite the high prices for imported products. Before the increase of prices, inputs for the transport sector were frequently not available. At least these products are available now and if they are needed badly eoough, the customer can purebase these products. In that case, a high price is of minor interest. Locai substitutes are rare, so normally import prices are paid. When local substitutes are available, tires for example, the quality of these products is not sufficient to serve the transport sector properly. 20 Chapter 4: Economie policy w.r.t. road transport in Tanzania

4.4.5 Public expenditure restructuring

Restructuring the public expenditure, actually, means cutting down on the public budget for most institutions. Balance of payments difficulties are one of the underlying reasons for these measures. Parastatals have to cut down on their expenditures and have to become competitive. Privatizing of parastatals is part of these restructuring measures to reach the objectives of cost reduction and competitiveness. Reasons for inefficient and loss-making operation of parastatals are, among others, the exorbitant bureaucracy and the lack of interest in competing. Besides the measures of public expenditure restructuring, the new free market principle with more and new competition forces the parastatals to improve efficiency. By saving money on public institutions, the priority on public expenses is shifted towards infrastructure and (road) rehabilitation projects.

For the road transport sector, the effect of these measures are two fold. The public transport operators have to become more economically minded and partially privatized. Their strong monopoly position is undermined. The private sector, on the contrary, faces a weakened public sector since the financial government support to the public sector is reduced and suppliers to this sector are facing a reduced demand from this sector because of the limited budget. Therefore, the private sector can consolidate and even better its position.

4.4.6 Promulgation of an investment promotion policy

Scarce resources are used not only to produce services like road haulage, but also to maintain, improve and extend these services. This phenomenon of converting present into future services (and of course, in general economie terms, other goods) is known as investment. Investments - certainly in the road haulage sector - are important for the acceleration of economie growth (see also chapter 7.8 and 7. 9 Direct and indirect economie effects).

In the past, the road haulage sector was almost entirely public. lnvestments in the sector were (or were not) made by the government. Since the liberalization policy was introduced, more and more road haulage enterprises started to operate as private firms and at present an estimated 75 % of the road haulage is in private hands. For private entrepreneurs to majntain and extend their business, investments are necessary and therefore, an investment friendly elimate is recommend­ able. The government can assist in creating such a elimate by, amongst others, the following 1 measures : cheap land to build premises; reduce (profit) taxes for eertaio period of time or continually; set imports of inputs free of customs duty. partial profit transfer abroad in foreign currency; increase interest rates; simplify administrative procedures; simplify custom procedures; decrease restrictions for foreign holdings; decrease restriedons for investments in sectors which used to be government controlled; remove restriedons to possess only a limited share in companies set time limits for acceptance of foreign investment; increase likelibood of acceptance;

Before liberalization, Tanzania was not welcoming private foreign investment. But the change of policy also showed a change of interest. New investments are warmly welcomed and the harrier to invest is decreased by the investment policy. Of the measures mentioned, reduction of taxes, simplifying custom procedures and increasing interest rates are part of this policy. Increase of interest rates is also part of an investment promotion policy.

See also Rebalancing the public and private sectors by ). Bouin and Ch.-A. Michalet, Development centre studies, Pa ris 1991, p.1 04. Chapter 4: Economie policy w.r.t. road transport in Tanzania 21

4.4. 7 Rolling Plan and Forwarding Budget for Tanzania (RPFB) 1993/94 - 1995/96

The Five Year Plans are to be replaced by Rolling Plans and Forwarding Budgets (RPFB). The RPFB will be tbe major annual statement of tbe Government's development strategy, economie targets and budgetary projections. The document covers a three year period and will be rolled over and updated each year. The first RPFB is coverlog tbe period 1993/94 - 1995/96, while tbe second will cover 1994/95 - 1997/97, and so on.

The RPFB major policy objectives are: attaining an average economie growth rate of around 4.5 %; reducing tbe rate of inflation to below 10 %; reducing tbe dependenee on exceptional balance of payments financing; ensuring an adequate foreign reserve level equivalent to at least three montbs of imports; intensifying restrictive fiscal and monetary polides consistent witb inflation and balance of payment objectives as well as currency stabilization purposes; enhancing efficiency in tbe mobilization and utilization of dornestic resources; reducing tbe public sector role in directly productive sectors (agriculture, industry, trade, mining) and facilitate substantial private sector involvement in tbose sectors.

The following policies have been identified in tbe RPFB for tbe transport sector: limiting tbe government' role to policy formulation, monitoring and evaluation; streamlining and strengtbeDing tbe sectoral institutional framework; rehabilitating and improving tbe condition of infrastructure and strengtbeDing maintenance culture and funding; improving rural and urban travel and transport; reducing sectoral dependency on government funding and promoting tbe development and involvement of tbe private sector; enhancing sectoral foreign exchange earnings; enhancing transport safety and sound environment.

So tbe liberalization policy is continued intbis RPFB. Compared witb tbe ERP I and 11, tbe goals of an average economie growth rate of around 4.5 % and reduction tbe rate of intlation to below 10 %, have been maintained. The process of revitalizing tbe transport sector and its services bas not ended yet. Private initiative is still emphasized. Summarizing it can be stated that tbe process of economie liberalization is in progress and will be continued in tbe most recent plan (RPFB). Chapter 5: Leyland DAF Tanzania Ltd. 23

5. Leyland DAF Tanzania Ltd.

5.1 Introduetion

Leyland DAF Tanzania Ltd. is a medium-sized enterprise in selling and after-sales setvicing of Leyland and DAF trucks and buses in Tanzania. It is situated in Dar es Salaam, the capital of Tanzania. Tbe company is the official subsidiary of Leyland DAF in Tanzania and is performing various activities like import, assembly, sales, parts supply and all after-sales setvice from war­ ranty to modification. With 46 sold trucks and 30 sold buses in 1992, Leyland DAF Tanzania Ltd. is having a 11 % share in the total truck and bus sales. A turnover of 1900 million Tanzanian shillings in 1992 and 175 employees rank the company as medium sized. At the moment, its major activity is repairlog and maintaining trucks and buses since the sales of trucks and buses in Tanzania have decreased significantly after 1992.

In this chapter, an ovetview of the characteristics of Leyland DAF Tanzania Ltd., will be given. A summary of the history of Leyland DAF Tanzania Ltd. places the company in the context of the previous chapter, especially the development of the economie policy. It is also background information for the current state of the company. According to the research questions, the charac­ teristics are divided into organizational, operational, financial and customer-oriented characteristics and are presented in the specific paragraphs. Repair & Maintenance, as a separate activity, is presented individually, because of the importance of this activity and the size of repair & maintenance at Leyland DAF Tanzania Ltd. All this information, together with the information on the economie policy in Tanzania, is evaluated in the following chapter. The functioning of Leyland DAF Tanzania Ltd. in a situation of economie liberalization and the influence of this liberalization on the company is discussed. The conclusions of this discussion can be found in the final chapter.

5.2 Bistory of Leyland DAF Tanzania Ltd.

The Leyland DAF Tanzania Ltd. company was established in 1964 as Leyland Albion (Tanzania) Ltd. In 1987, the name was changed into Leyland DAF Tanzania Ltd. because DAF joined with Leyland. DAF products, besides the existing Leyland products, became part of the assortment in Tanzania in 1989.

Even before the establishment of Leyland Albion (Tanzania) Ltd. in 1964, Leyland trucks and buses were available in Tanzania. A selling point in Dar es Salaam sold new trucks and buses which were imported from Kenya and driven by road to Dar es Salaam. Parts supply and repair & maintenance were offered as after-sales setvices. In 1966, two years after the establishment of Leyland Albion (Tanzania) Ltd., the company started the assembly of buses and trucks in Dar es Salaam itself and became independent of Leyland Albion in Kenya.

The socialist policy introduced in 1967, affected the position of Leyland Albion significantly. The company did oot become state owned but got firm restrictions like all other importers. Until then Leyland had been monopolist in buses in Tanzania. The foundation of the State Motor Corporation (S.M.C.) by the government meant even more government intetvention. The S.M.C. became the sole institution for import of vehicles and the distribution to dealers. Leyland Albion (Tanzania) Ltd. became contractor to the S.M.C. because the S.M.C. organized and financed the imports, Leyland Albion (Tanzania) Ltd. only gained commission for assembling and selling.

The truck and bus selling market was divided into three sectors by the S.M.C. by issuing specific permits. Leyland Albion (Tanzania) Ltd. was allotted the selling of trucks from 7 up to 15 tonnes Carrying Capacity (C.C.) and 10 tonnes buses. Within that sector, the company was monopolist, but could oot sell according to the demand, because of the import restrictions. 24 Chapter 5: Leyland DAF Tanzania Ltd.

Under the changed economie policy of liberalization since 1982, where restrictions were reduced or abandoned and import was encouraged, Leyland Albion (Tanzania) Ltd. began to import trucks and knock down (K.D.) buses itself. Buses were still assembied in Tanzania because of economie aspects; shipping costs of knock down buses were considerably lower. Trucks, which have a shorter chassis than buses, were oot economically interesting for assembly. Free competition, as one of the aspects of liberalization, opened a new era of product diversification. Since 1986, Leyland Albion (Tanzania) Ltd. got new competitors in their original sector of the market. Scania was and is the main one. The company itself also entered a new sector: the heavy truck sector with Carrying Capacity of over 15 tonnes. This bas only been successful after the influence of DAF in Leyland in 1987 and the importation of heavy DAF trucks since 1989. The structure and influence of Leyland DAF and the position of Leyland DAF Tanzania Ltd. is explained in the following lay-out.

Figure 5.1: Lay-out DAF structure.

From 1987 until 1993, this structure was valid. Leyland DAF Tanzania Ltd. was one of the African subsidiaries under Leyland DAF International Ltd .. This division was the official owner of all African subsidiaries but the management came from DAF International. DAF B.V. was the overall responsible for all divisions, including Leyland DAF in the United Kingdom and Leyland DAF International Ltd. The collapse of DAF B.V. in March 1993, and the foundation of a new company called DAF Trucks, out of the old one, affected the position of the African subsidiaries. The European market was given priority and the African market had to be disposed of. As a result, the company was sold out in July 1993 by a Tanzanian business family, owning other vehicle companies. New developments in this area are the introduetion of Volvo trucks and spares to Leyland DAF Tanzania Ltd. Leyland DAF Tanzania Ltd. is no longer part of the DAF organization, which means it is only franchising the Leyland DAF name and its products.

At the moment Leyland DAF Tanzania Ltd. is operatingin the bus sector of over forty seats with two models: a Leyland and a DAF bus. In the middle range truck sector, the company is operating with one model: a Leyland truck with different specifications. In the heavy range truck sector its also operates with one model: a DAF truck with different specifications. Future develop­ ments cao be the sale of heavy Volvo trucks because of the change in ownersbip and, therefore, the change in interest. Chapter 5: Leyland DAF Tanzania Ltd. 25

5.3 Characteristics of Leyland DAF Tanzania Ltd.

The functioning of the Leyland DAF company in Tanzania is described by means of a number of relevant characteristics. These characteristics are divided into four groups: organizational, operational, financial and market oriented.

5.3.1 Organizational characteristics

To explain the organisation of Leyland DAF Tanzania Ltd., a description of the departments, the organisational structure, the employees and the forms used within the company is given. The position of Leyland DAF Tanzania Ltd. in the DAF organization, until the company was sold out, was already presented in Chapter 5.2 History of Leyland DAF Tanzania Ltd.

5.3.1.1 Departments

The Leyland DAF company in Tanzania is operaring with several departments. Departments can be identified on basis of the function they are fulfilling. The company bas four departments and one department, the service department, can be separated into several sections. The different departments are briefly described below.

Sales department The sales department is responsible for the sales of trucks and buses. Without this department and the promotion and sales of the Leyland DAF products, all other departments would be useless in the long run. The sales department is oot only selling tbe trucks and buses, but is also involved in the process of assembly and body-building. Assembling is an internal activity of the company but body-building is contracted to qualified body-builders. The activities of the sales department concerning the process of delivering a new vehicle to a customer have two main functions: checking and cantrolling the process of assembling and body-build up and the registration of the new vehicles. When a vehicle is delivered to the customer, the responsibility for the vehicle is handed over to the service department

Service or After-sales department This department deals with all the activities that will be carried out after the sale of a new truck or bus, so durlog the Iifetime of the vehicle. Even Leyland DAF vehicles that are oot sold by the company will be serviced. The service department bas several sections and in fact incorporates all activities of the company that can oot be included in the other departments. The sections are workshop, import, parts, assembly and maintenance.

Workshop In the workshop, the Leyland DAF trucks and buses from the customers are serviced (see photo 5.1). There is a workshop for external jobs and a workshop for internal jobs. The company bas about 20 vehicles which are used for company transport. They are serviced by the workshop for company cars. The main workshop is for service of the vehicles of tbe customers, which is generating income. A more extensive discussion is presented in chapter 5.4 Repair & maintenance of Leyland DAF Tanzania Ltd. Reception is also part of workshop since all customers for repair & maintenance are serviced by reception. It is checking the customers complaint and initiating the repair & maintenance procedure. A final test-drive and checking out of the vehicle is also the reception's duty. Reception is keeping records of all repair & maintenance job cards and all regular customers. 26 Chapter 5: Leyland DAF Tanzania Ltd.

Photo 5.1: Worleshop

Import The import section is responsible for the import and clearance of new trucks, bus chassis and parts. There is an extensive cooperation with the sales department and the parts section because the import section is working for those other two deparnnents. This section is controlling the traject of ordering and importing vehicles and parts at Leyland DAF international and the administrative follow-up. Shipment and clearance are also the responsibility of the import section. The import section is giving service to both the sales department and the service department, but is still under the responsibility of the service department

Parts Storage of parts, internal delivery of parts to the workshop and extemal sale of parts to customers are responsibilities of dte parts section. This is an important department because availability of parts is frequently a bottle-neck. Most pans. however, are in stock. The storage and banding out of parts is organized by a computer system. This system is also comtected with the finance depart­ ment for the accountancy of the parts. When the workshop is needing parts for the jobs to be carried out, it bas to request these pans from the parts section. Customers can request for parts at a special parts counter.

Assembly Assembly and maintenance are the remaining sections. At the assembly section, the new trucks are getting a pre-delivery inspection. Also bus chassis are being assembied bere. Despite this section is servicing the sales department and not the service department, it is organized under the service department. This because of the technica! aspects which are closely related to the workshop and because of the technica! supervision from the service department. Chapter 5: Leyland DAF Tanzania Ltd. 27

Maintenance The maintenance section is responsible for all maintenance activities concerning buildings and equipment. A second task is major repair and overhaul of engines. The engine room is also the responsibility of this section. Minor repair and services on engines are carried out by the work­ shop, but when major repair or overhaul on engines have to be carried out, the engines normally have to be lifted out of the vehicles. In that case. the engines are transferred to the engine room and the maintenance department is taking over.

Finance department All costing calculation and accountancy is done by the finance department Vehicle and part sales and repair & maintenance of customer vehicles are the major incames of the company. The major costs to be calculated are wages and salaries, purebase of new trucks and buses, parts and local materials. The calculation of the costs of external workshop jobs is also done in this department In Tanzania, the contact with the bank is very important. All other banking activities, like letter of credit procurement, are done by the finance department.

Personnet department Personnet and security affairs are handled by the personnet department. This is a wide range of activities. Reeruitment of personnet is a logica! activity, but contact with government departments. trade union and ruling party are also personnet departments jobs. At Leyland DAF Tanzania Ltd. security is very important. The parking area at workshop normally contains at lot of customer vehicles and spare parts in stores have a high value. All this material bas to be protected, especially because there is a lot of theft, not only from outside but also from personnel inside. So the security force at the company is extensive.

Photo 5.2: Buses to be repaired at workshop 28 Chapter 5: Leyland DAF Tanzania Ltd.

5.3.1.2 Organizational structure

An organization chart can give a clear view of the organizational structure the company. Unfortunately, no up to date organization chart was available at the company. Making a new organization chart was the only solution. The management of the company was very much intere­ sted in job descriptions supporting the organization chart. Together, the organisation chart and job descriptions can be an instrument for the management in discussions about information and responsibility problerns. The organization chart is given in tigure 5.2. The corresponding job descriptions are given in Appendix A.

Not all jobs are included in the organization chart. At the time of surveying, Leyland DAF Tanzania Ltd. had a total of 176 employees. All senior personnet and supporting junior persounel is included in the chart, but production personnel, security guards and messengers etc. are not included. When, on the bottorn of the chart, vertical lines are drawn, other personnet could be added there, but are presently excluded from the chart.

The most common organizational structure is the pyramid shape, under which the organizational structure of Leyland DAF Tanzania Ltd. can also be classified.1 A pyramid shaped organisational structure bas the following three organizationallevels:

a. Top management, normally entrusted with long-term strategie planning, budgeting, coordination and controL In the organizational structure of Leyland DAF Tanzania Ltd., the rnanaging director is the sole top manager. He is responsible for the long-term strate­ gie planning but had to follow guide-lines and orders from Leyland DAF International Ltd. until recently. At the moment, the new owner is issuing guidelines and orders.

b. Middle management, normally entrusted with the planning and control of the organiza­ tional functions. In the organizational structure of Leyland DAF Tanzania Ltd., the company secretary and the sales, finance and service directars are fulfilling these functions. The organisation shows that each manager is teading one or more departments to plan and control the organizational functions. c. Supervisory management, that plans and controts the day-to-day operations and activities within the organizational units under its supervision. Involved in this supervisory management are the officers, managers and foremen in the third level of the organization chart. On some occasions an extra level is present when the supervisory manager bas a multiple task (e.g. teehoical manager) and/or when the span of control (the number of employees reporting to a supervisor) is too large (e.g. assembly manager).

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5.3.1.3 Employees

A study on the kind of employees at Leyland DAF Tanzania Ltd. bas been carried out. Employees working at Leyland DAF Tanzania Ltd. can be divided into junior and senior employees as well as into direct and indirect employees. The senior staff are the directors, managers, officers and foremen. They are all presented in the organization chart. The junior employees are all other Iabour. All (sub )departments are indirectly related to productivity, except workshop and assembly which have a direct link to productivity as well as an indirect link. So within those two depart­ ments, both indirect and direct employees are present.

Table 5.1: Employees Leyland DAF (Tanzania) Ltd.

Department or section Junior employ- Senior staff Total per ees department Workshop direct 34 34 indirect 10 4 14 Assembly direct 20 20 indirect 5 3 8 Maintenance 9 1 10 Parts 7 2 9 Import 2 2 4 Finance 7 4 11 Sales 7 2 9 Managing Director's office 7 1 8 Personnel/ Administration 6 2 8 Security 40 1 41 TOT AL 154 22 176

The meehallies are the direct labourers at the workshop and indirect labourers are messengers, clerks and reception employees. At assembly, the direct labourers are also mechanics, assembling the buses. Indirect labourers are clerks and storesmen.

With respect to maintenance, junior personnet are partty meehallies working in the unit shop (repairing engines) and partty painters, ptumbers and carpenters for maintenance of buildings. The parts section is working with several baymen, picking specific parts from bays in stores. The other departments and sections are baving clerks, administrators and messengers as their junior personnel. The security section is baving forty guards to proteet the company from theft.

Tabte 5.1 can also be presented differentty by giving ratios on direct to indirect and junior to senior personnel. The ratio direct personnet I indirect personnet gives an indication of the overhead in the company.

Direct personnel 54 4 = = Indirect personnel 122 9 Chapter 5: Leyland DAF Tanzania Ltd. 31

Senior personnel (13 %)

Indirect personnel Junior (70 %) personnel (87 %)

Figure 5.3: Distribution of direct and Figure 5.4: Distribution of senior and indirect personnet junior personnet

The overhead of 70 % of the total personnet seems a large percentage. A large contributor to this factor however, is the large number of security personnel.

The ratio senior I junior personnet is 1 : 7.

5.3.1.4 Fonns

The information transfer within and between departments and sections is structured by using standard forms. Nearly every activity bas to be authorized and accounted. This originated in the sodalistic with its bureaucracy and the theft and corruption within the com­ pany. By administrating all activities, better checking can be achieved. The parts section for example, had difficulties with excessive loss of parts. The introduetion of an extensive procedure to be carried out before releasing the parts at security, reduced the loss of parts significantly. The internat forms of the company are enumerated in Appendix B. A short description explains the use and aim of these forms. 32 Chapter 5: Leyland DAF Tanzania Ltd.

5.3.2 Operational characteristics

The operational characteristics are related to the practical operations of the company. All operations and activities within the company can be categorized under the operational characteristics, but only the relevant operations will be dealt with. These operations are identified as: selling trucks and buses, selling spare parts and repair & maintenance on truck and buses. Selling buses implicates assembly of those buses in most cases, so assembly is also included in the operational characteristics. The relevant items w.r.t. these operations are: vehicle specifications; vehicle sales; operational activities of workshop, assembly and parts; available equipment for the workshop and assembly operations; lay-out of the company.

5.3.2.1 Vehicle specifications

Leyland DAF Tanzania Ltd. is currently supplying the market in Tanzania with the following models.

Table 5.2: Current Leyland DAF models. Leyland DAF Truck Cornet 12.12 Truck FA 2100 Cornet 12.13 FA 2500 Cornet 13.13 FA 2800 Cornet 14.14 FAT 3300 Cornet 14.16 FTT 3300 Cornet 16.14 Cornet 16.16 Super Cornet 22.14 Super Cornet 24.14 Super Cornet 24.16 Bus Cornet 12.12 Bus TB 2100 Cornet 14.16 Cornet 16.16

The first two digits from the Cornet specification are the total gross vehicle weight in tonnes. The last two digits are the horsepower of the Cornet divided by 10. For example, Cornet 14.16 means 14 tonnes gross vehicle weight and 160 horsepower. The DAF trucks have a different code. FA(T) means a rigid trucks and FTT means a tractor to pull semi-trailers. The four digits number is the horsepower times 10. So for example FAT 3300 means a rigid truck with 330 horsepower.1

2 For more infonnation on vehicle types, see also Chapter 5.4: Repair & Maintenance. Chapter 5: Leyland DAF Tanzania Ltd. 33

The Cornet bus is in fact a converted Cornet truck. The chassis is extended and a bus body is built on the chassis. The engine is in front like the truck. The DAF TB 2100 is oot adjusted from a truck, but also bas the engine in front. The construction of a front engine is used because of the rough conditions in Tanzania. Rear engine buses will oot stand up to the poor roads and overloa­ ding. Their clearance is less and their construction is oot as strong as tbat of the front engine buses. In Europe, all buses over 40 seats, like the Cornet and TB are rear engine buses because it gives more comfort. In Africa those buses are oot appropriate.

The DAF trucks for the Tanzanian market are oot supplied in Europe any more. The FA(T) and FTT trucks are replaced by the 95 series truck. The FA(T) and FTT trucks are still produced and exported to Africa because tbe 95 series truck is too sophisticated and cornplicated. It is oot serviceable under Africao conditions and it cao oot stand up to the rough Africao conditions like the previous model.

5.3.2.2 Vehicle sales

Selling bas been an important activity of Leyland DAF Tanzania Ltd., but the selling market of trucks and buses bas contracted since 1992. Table 5.3 shows the vehicle sales of Leyland DAF Tanzania Ltd. in 1992. Official statistics frorn 1993 were oot available, but in 1993 even less trucks and buses were sold than in 1992.3

Table 5.3: Vehicle sales 1992 by Leyland DAF in Tanzania

TRUCKS BUSES Model Number Model Number Leyland Cornet 12.12 6 Leyland Cornet 12.12 3 Leyland Cornet 14.16 20 Leyland Cornet 16.14 3 Leyland Cornet 16.16 2 Leyland Cornet 16.16 Leyland Super Cornet 24.16 4 Total Leyland 15 Total Leyland 23 DAF FTT 3300 15 DAF TB 2100 7 DAF FAT 3300 4 Total DAF ., 19 Total DAF 7 Total trucks 34 Total buses 30 Total vehicles sold by Leyland DAF in Tanzania in 1992 64

The number of Leyland DAF vehicles entering Tanzania in 1992 is, however, rnuch Iarger than those 64 vehicles. A lot of vehicles are directly irnported. These vehicles are directly bought in the UK or Holland by the custorners. The forex is frequently corning frorn aid donors and the direct import of vehicles is part of the aid. Tanzanian shillings cao be converted through aid funds. Sornetimes, these vehicles are a gift frorn aid donors (for more information see cbapter 5.3.4). Table 5.4 shows the directly imported vehicles. The total number of new Leyland DAF vehicles in 1992 is tberefore 190.

3 An extensive discussion of the truck and bus market can be found in Chapter 5.3.4: Market oriented characteristics. 34 Chapter 5: Leyland DAF Tanzania Ltd.

Table 5.3 shows that the Cornet 14.16 was sold best in 1992 of the Leyland models and that the FTT 3300 (tractor) was sold best of the DAF models. However, since most Cornet 16.16 trucks are direct imported, the Cornet 16.16 model is the most sold Cornet model in the past five years.

Table 5.4: Leyland DAF vehicles directly imported in 1992 by customers using their own funds or donor funds.

Customer Number Model Blueline Enterprises 34 DAF FTT 3300 UDA 55 Leyland Cornet 16.16 bus Ministry of Finance Zanzibar 30 Leyland Cornet 12.12 truck Tanesco 5 Leyland Cornet 12.13 truck 2 DAF FA 2800 truck Total direct imported vehicles in 1992 126

5.3.2.3 Workshop

The workshop is divided in two sections which cao also be seen in the organization chart. There is a workshop for company cars with its foreman and a workshop for external customers, which is called (general) workshop, with its foreman. The workshop for company cars bas its own mechanics and is servicing and repairlog the 25 company vehicles, including two trucks and a fork-lift truck. All vehicles are serviced every month according a schedule. The general workshop is repairlog and maintaining the customers vehicles. The workshop for company cars is a supporting activity, while the general workshop is generating iocome for the company.

When looking at (the genera!) workshop, activities cao be divided into several classes. The main classes are presented in the following table, together with the frequency durlog 15 months.

Table 5.5: Workshop activities for external activities for external customers between 3/92 and 5/93

Classes of activities Number

Repair only 411 Maintenance only 131 Repair & Maintenance 366 Inspeetion only 9 Inspeetion & Repair 16 PDI 26 (Pre Delivery Inspection) Figure 5.5: Percentages workshop activi­ Total 959 ties for external customers between 3/92 and 5/93. Chapter 5: Leyland DAF Tanzania Ltd. 35

In those fifteen months, the average bas been approximately 64 effective extemal jobs per month. It is obvious from tigure 5.5 that repair is occurring more frequent than maintenance. An extended outline and analysis of workshop activities and repair & maintenance is added in a sep­ arate chapter: Chapter 5.4 Repair & maintenance at Leyland DAF Tanzania Ltd.

5.3.2.4 Assembly

The assembly of buses is done at a different location in Dar es Salaam. Until recently, since the sales have decreased, the assembly department had been occupied with work orders for assembly. Enough buses had to be assembied to function at full capacity. With the decrease of truck and bus sales for Leyland DAF Tanzania Ltd., the number of trucks to assembie also decreased. Normally, a batch of buses is assembied and built up simultaneously, which cao take several months. Only the chassis and teehoical components are built up. Body building is done by qualified body builders. After finishing a batch of assembied buses, the assembly department is idle. Because of the reduced sales, a fimshed batch of assembied buses is oot automatically foliowed by a new batch. Therefore, periods when Iabour is out of work are occurriog now. Alternatives to fill the idle time have been introduced. Panel beating and repairs of bus and truck damages will be carried out to minimize the time losses.

5.3.2.5 Parts

The parts department is issuing parts to workshop and to customers. All these parts are filed in a computer. Frequently new parts are ordered according to the selling pattem of current parts. A stock ordering metbod is oot used, but practical constraints are dominatiog the ordering decisions. The limited forex is the major constraint. The parts have to be ordered within a small budget, the items and numbers to be ordered have therefore to be balanced within the budget. Because expensive items contribute heavily in the budget of parts to be ordered, the company is very reluctant ordering such items.

An analysis of the parts stock shows that more than 60 % of the net stock is oot usable. (see table 5.6) The net stock consists of all parts that are lying in stores. Items that are never issued, or last issuedinlor before 1991, are categorized as potentially obsolete. Only 40 % of the parts that are in stock are currently (in 1992 or 1993) issued. Some specific parts have to be stocked although they have oot been issued currently. These parts are issued rarely but are stocked for safety reasoos (difficulties in purchasing these parts, importance of availability, etc.).

From the currently issued stock only a part is usable, because the quantity of some Hoes in stock is unnecessary high. Some of these units of currently issued parts have never been moved or have last been moved more than two years ago, although these parts itself are fast movers. This means too many units of these parts are in stock; all over capacity is excess or obsolete.

Despite some over capacity in specific parts, other parts, ordered by workshop or customers, are oot available. Some of these parts are difficult to purchase. The time span between ordering and arrival of the parts is also very long, sometimes more than six months. The parts are ordered in UK or the Netherlands. Bureaucracy, foreign exchange and other financial problems are delaying this process. To cope with the scarcity of some of these parts, practical solutions are found. Substitutions on the local market are purchased and nearly similar parts are adjusted to replace the origioal parts. For incidental emergency parts, shipment from UK or The Netherlands is done by air freight. The transport costs are very high but the time span is reduced to approximately three weeks. 36 Chapter 5: Leyland DAF Tanzania Ltd.

Table 5.6: Analysis of the parts stock from Leyland DAF, june 1993.

Description Lines Quantity Value (x 1000 Tsh) Net stock 5,634 298,457 617,492 Potential obsolete stock 3,443 195,779 145,210 Currently issued stock 2,191 195,779 472,282 Usabie stock 1,849 56,576 205,812

The currently issued stock in table 5.6 is specified in table 5.7. Tbis table shows that most parts have a unitcostof less than Tsh. 50,000. These cheapest parts also have the largest units per part (on average 94 units per part). These parts with a unit cost of less than Tsh. 50,000, however, also have the longest stock bolding years. On average, they are twice as long in stock than the other, more expensive, parts. Reduction of the number of units for these parts is advisable to reduce the stock holding years. These parts, as a group, also represent the highest value in total parts. Reduction of units in this group would meao a significant reduction in capital stocking in stores. Substitution of these parts by scarce parts is recommended.

Table 5.7: Analysis of the stock issued in 1992/1993

Unit cost Lines Quantity Value Stock bolding years (Tsh) (x 1000 Tsh) > 150,000 20 163 34,436 3.6 < 150,000 27 139 15,896 4.1 > 100,000 < 100,000 80 1,017 66,363 3.9 > 50,000 < 50,000 2,064 194,460 355,585 8.1 TOT AL 2,191 195,779 472,280 8.0

5.3.2.6 Lay-out and equipment

Leyland DAF Tanzania Ltd. is established in two locations. Tbe Pugu road site is the major and eldest location. This bas been the company's location since its establishment. Ten years ago the company shifted assembly to another location at Kilwa road. At this site, assembly takes place. Storage of obsolete and excess stock is done at the containers at Kilwa road site. All other activities take place at Pugu road site.

The yard at Pugu road can be reached by a small side-road from Pugu road. On the yard, all vebicles to be repaired or maintained can be parked. Figure 5.6 shows the lay-out of the yard at Pugu road. In the unit shop, engine repair and overhaul is carried out. Engines can also be tested by running on a testbank. Testing and adjusting of injector pumps is done in the pump room, while all electrical jobs are carried out by the electrical shop. In total, 30 vehicles can be parked in the workbays for repair and maintenance. Tbe vehicle parking is normally used for completed vehicles and vehicles to be repaired and maintained. Before major repairs, the vehicles are wasbed at the special vehicle wash. Special tools are kept at tools stores and can be borrowed there, to minimize loss and theft of these expensive tools. At workshop stores, parts for company cars, especially Land Rover are stocked. Tbe major equipment used at this yard is added in table 5.8 (ordinary tools are not included). Chapter 5: Leyland DAF Tanzania Ltd. 37

Table 5.8: Equipment Leyland DAF Tanzania Ltd.

PUGUROAD KILWA ROAD Description Number Description Number

* Compressor 2 Compressor 2 * Generator set 5 Drill press heavy duty 1 * Elephant jack 1 Elephant jack 2 * Trolley jack 8 Trolley jack 3 * Pallet trolley 2 Steam cleaning machine 2 * Press 1 Smal! drill press 1 * Chemica! tank 2 Fork-lift truck 1 * Steam cleaning machine Autogeen welding unit 1 * Are welding 1 Electric welding unit 1 * Bench grinding machine 2 * Waterpump 1 * Engine test bench 1 * Nozzle tester 1 * Injector pump 1 * Injector pump machine 1 * Bridge (company cars) 1

At the Kilwa road site, assembly is carried out in 12 workbays (see tigure 5. 7). So twelve buses cao be assembied at the same time if necessary. Parts for assembly are stored in the parts section. All other parts, mostly obsolete and excess parts from the parts department at Pugu road are stored in containers. Tbe training school is to educate roeebanies from the workshop and assembly in repair and maintenance and assembly of new introduced trucks and buses. At the bonded site finally, the goods and vehicles from customs can be placed. Major equipment to assembie buses is shown in table 5.8 (ordinary tools not included). 38 Chapter 5: Leyland DAF Tanzania Ltd.

unit vehicle wlllih shop 1 bonded site foremen office & workshop stores contaimn 6 IMlrkbays

tools stores & IMlrkshop 'vehicle 16 >Wrkbays office :parking

8 IMlrkbays 12 workbays

offices 7 D offioepoin- ..... parts E3 ...... D tont stores

Figure 5.7: Lay-out Kilwa road site Figure 5.6: Lay-out Pugu road site Leyland Leyland DAF DAF Tanzania Ltd. Tanzania Ltd. Chapter 5: Leyland DAF Tanzania Ltd. 39

5.3.3 Financial characteristics

The financial characteristics consist of a profit analysis, input and output of the company, the nett value added.

5.3.3.1 Profit analysis

The profit analysis is presenting the revenues, margins and costs to compute the final profit after tax. The years 1989 to 1992 are calculated to analyze financial changes during those years. Originally, the information was available in Tanzanian shillings only, but between 1989 and 1992, the T. shilling devaluated seriously. To compare the specific years, the T. shillings in the financial data are converted to US Dollars to compensate for this devaluation in the analysis. See table 5.10: financial data in thousands of US Dollars.

The highest turnover for the presented four years, bas been the sales of vehicles. After a big increase of sales in 1990, the sales decreased. In 1992, the sales had gone down with nearly 50 % compared to 1991. As a matter of fact, all revenues decreased in 1992, compared to 1991. The profit on vehicles collapsed as well. The absolute margin as well as the margin percentage decreased since 1990. See also table 5.9. Only in 1990, a significant increase of the margin on vehicle sales was realised. On all other revenues, except workshop Iabour, the margins decreased as well. The total revenue and total margin in 1992 is lower than in the three previous years and so is the final profit after tax. So financially, 1992 bas been worse than previous years.

Table 5.9: Margin on input (cost price for company) in percentages.

1989 1990 1991 1992 vehicles 38 % 36% 32 % 13% parts 92 % 60 % 115% 116% contract assembly 0% 0% 61 % -33% workshop parts 157 % 95 % 78 % 123% workshop Iabour 91 % 75 % 53 % 95 % bodies 3% 2% 4% 5% TOT AL 61 % 39 % 42% 32 %

Table 5.9 shows that the margins have shifted from 1989 to 1992. In 1989, the margin onsales of vehicles was 38 %, but decreased to a 13 % in 1992. The sales of parts, on the contrary, is very profitable with a margin of over 100 %. The margins on workshop parts (parts that are used for vehicles for repair & maintenance) and workshop Iabour are also interesting, especially in 1992. Since the profits on sales have decreased, sales of parts, workshop parts and workshop Iabour are making the highest profits. The margins on these items have increased as well in 1992 compared to 1991. The activities and profit of Leyland DAF Tanzania Ltd. have shifted from selling vehicles in 1990 towards selling parts and performing repair & maintenance. lt can be stated that the sales in 1993 were even less than the 1992 sales, so also in 1993 the company was making most profit by selling parts and repair & maintenance activities. 40 Chapter 5: Leyland DAF Tanzania Ltd.

Table 5.10: Financial data in thousands of US Dollars. YEAR: 1989 1990 1991 1992

Tsh. to USO (meao rates for specific years) 1989 143.38 1990 195.06 1991 219.16 1992 297.17 Amounts (x 1000 US Dollars) SALES vehicles 3139 8966 7410 4011 parts 2260 1917 1647 929 contract assembly 7 0 37 34 workshop parts 663 831 1086 818 workshop Iabour 279 287 319 269 bodies 272 1118 625 390 TOTALSALES 6620 13119 11124 6451 MARGIN vehicles 872 2389 1807 468 parts 1081 723 881 498 contract assembly 7 0 14 -17 workshop parts 405 405 475 451 workshop Iabour 133 123 110 131 bodies 7 26 23 20 TOT AL MARGIN 2505 3666 3308 1551 OPERATIONAL COSTS salaries/wages 167 138 155 145 social/ charges 49 15 9 7 depreciation 49 92 155 138 warranty 21 133 132 24 other social 28 103 73 74 property 105 256 310 192 sales promotion 14 200 132 37 other sales 70 67 64 37 travel 56 82 128 131 car cost 139 138 114 81 workshop 21 62 114 74 general 119 159 169 225 obsolete stock 0 625 68 599 bad debtors 126 138 50 303 other -21 87 146 -814 TOTAL OPERAT. COSTS 943 2295 1819 1253 OPERATIONAL PROFIT 1562 1371 1489 298 interest -237 -149 -37 17 profit before tax 1325 1222 1452 315 tax -677 -707 -716 -118 PROFIT AFTER TAX 648 515 736 197 Source: Ftnance department Leyland DAF ((Tanzania) Ltd.) Chapter 5: Leyland DAF Tanzania Ltd. 41

5.3.3.2 Nett Value Added

The Nett Value Added is a tigure representing the contribution of the company to the Gross Nett Product of Tanzania.

NVA (Nett Value Added) 1992 = 0- (MI + D)

0 = Output in 1992 or totalsales: 1917 mill. Tsh MI = Material Input and services obtained outside the company in 1992 :

Material input = vebicles 1053 parts 128 workshop parts 109 car cost 24 workshop 22 general 67

Services = bodies 110

D Depreciation in 1992 : 43 +

1556

NVA 1992 = 361 mill. Tsh (1.2 miJL us Dollar)

NVA < => W +SS w Wages in 1992 : input workshop Iabour 41 salaries and wages 43 +

84 ss = Social surplus: The social surplus expresses the earning capacity of the company in 1992. It comprises indirect taxes, interest, dividends, insurance and re­ insurance charges, rent, royalties, and undistributed profit that is being used by the firm for expansion funds, reserve funds, social welfare funds etc.

So Social Sw;p1us = NVA- W = 277 mill. Tsb in 1992 (0.932 mill. US Dollar) 42 Chapter 5: Leyland DAF Tanzania Ltd.

5.3.4 Market oriented characteristics

The selling market of buses and trucks in Tanzania and Leyland DAF's share in this market are discussed in this chapter. The market position of Leyland DAF compared with its competitors is shown in the following table.

Table 5.11: Truck and Bus market in Tanzania in 1992 (Selling statistics January - December 1992 from merobers of the Tanzania 4 Motor Trading Association TMTA )

TRUCKS (GVW in Ton)

5-7.5 7.5-17 17-24 24-up % Number of vehicles Ton Ton Ton Ton Total Total sold Trucks Trucks Isuzu 9 93 102 21% lveco 3 12 36 51 10 % Leyland DAF 13 5 28 46 9% Mercedes Benz 1 11 1 4 17 3% Mitsubishi 36 69 3 10 118 24% Nissan diesel 37 35 72 15 % Scania 3 76 79 16 % Toyota 9 9 2% Number of Total 95 233 48 118 494 100% Trucks

BUSES (Number of seats) % Number of vehicles 15-25 25-40 40-up Total Total sold Seats Seats Seats Bus Bus Isuzu 1 5 6 3% Iveco 2 2 1 % Leyland DAF 4 26 30 17% Mitsubishi 1 1 1% Nissan 48 4 52 29% Scania 38 38 22% Toyota 30 18 48 27% Number of Total 80 33 64 177 100% Buses

Source: Tanzania Motor Trading Association

4 The 1MTA is a group of vehicle importers, united in a lobby. Together they are discussing new developments of economie, financial and teehoical backgrounds on the vehicle market in Tanzania. The 1MTA can act as a lobby towards the govemment to adjust policies etc. to improve the vehicle market. Chapter 5: Leyland DAF Tanzania Ltd. 43

This table can be somewhat distorted because the TMTA memhers were banding over their individual sales statistics voluntarily. Only statistics of TMTA merobers are summarized in this table, but most truck and bus importers are merober of the TMTA. Direct import, used import and other constructions are excluded from this summary. Sales statistics from the few not TMTA members, like some Chinese and Korean makes, are impossible to obtain and, therefore, excluded. Still, this table gives an indication of the market positions of Leyland DAF and its competitors.

In the truck market, Leyland DAF is selling in all segments except in the light range segment (5- 7.5 ton GVW). The Japanese manufacturers are dominating this market segment, especially Mitsubishi and Nissan Diesel. The middle-light and middle-heavy range are also dominated by the Japanese. Leyland DAF is selling the Cornet truck in these ranges, but Isuzu is dominating the middle-light and Iveco the middle heavy range. In the heavy range (24 tons GVW and more) Leyland DAF bas a significant share. Tbey are selling the DAF trucks in this segment. Leader, however, is Scania which is selling nearly three times more trucks in this segment.

In the bus market, the Japanese are again dominating the light (15-25 seats) and middle range 25- 40 seats) segments. Nissan and Toyota are leaders in selling light and medium buses and Toyota is also leader in selling middle range buses. In the heavy bus segment (40 seats and more) Leyland DAF and Scania are the only competitors within the TMTA. These buses are used as city and intercity service bus. Scania is also market leader in this segment. It is selling one and a half times more buses than Leyland DAF.

Actual proportions of the different makes cao be different from the statistics presented. Mercedes Benz, for example, bas officially sold 17 vehicles in Tanzania. But a lot of Mercedes Benz vehicles are imported from the Middle East and elder types of Mercedes Benz vehicles are still running in Tanzania. So the share of Mercedes Benz in the total existing truck fleet in Tanzania will be significantly larger than the 3 % of the 1992 selling statistics of table 5.11. Looking at the market segments in which Leyland DAF is selling trucks and buses, Scania proves to be its main competitor. Therefore, a comparison between these two makes is made in table 5.12.

Table 5.12: Comparison between Leyland DAF and Scania % share in Leyland DAF Scania total truck market 9% 16 % total bus market 17 % 22% total truck and bus market 11% 17 % segment truck market in which they sell trucks 12 % 48 % segment bus market in which they sell buses 31 % 59% segment truck and bus market in which they 15 % 51 % sell trucks and buses

In all comparisons, Scania out sells Leyland DAF. Actual figures, however, can be different. Chapter 5.3.2.2, vehicle sales, showed a huge number of directly imported Leyland DAF trucks and buses in 1992. These vehicle are oot included in the TMTA statistics. This hampers an objective comparison. 44 Chapter 5: Leyland DAF Tanzania Ltd.

Still, the table shows that Leyland DAF is operating bebind Scania. Scania bas a large share in the market segment in wbich they sell trucks or buses, but Scania is specialized in the heavy truck and bus market. Leyland DAF is servicing the middle and heavy truck and bus market, Leyland DAF, therefore, bas a wider range of customers.

Leyland DAF Tanzania Ltd. bas different kinds of customers. Tbey can be divided into several groups. Tbe major group is the group of private bus companies. At present, Leyland DAF bas approximately 50 customers from this group. This used to be more, but the number of customers bas decreased due to the recession. Each customer owns about 6 to 10 buses. These buses are used in long distance passenger transport as an intercity service bus. The next group is the group of ministries and parastatals. Sbirika la Usafiri Dar es Salaam (UDA), the national bus company for local passengers transport in Dar es Salaam, is the major customer from this group. UDA is a parastatal and owns more than 50 Leyland buses. The last group is the group of transport com­ panies. Leyland DAF bas about 8 to 10 customers wbich are big transport companies. These customers own an average of 20 trucks. The trucks are mostly used for internationallong distance transport. Leyland DAF also used to have small transport companies as customers. Tbey use trucks for local and national transport. Due to the recession these customers have problems financing their vebicles, so this group is hardly capable of buying new trucks. lnstead, they rnaintaio and repair old models, mostly by themselves or by cheap inferior workshops.

Looking at paragraph 5.3.3.1: Profit analysis, it is evident tbat the revenueon vebicle salesbas decreased since 1990. Especially 1992 bas been a feebie year. Selling statistics from 1993 were oot available at the time of research, but the sales have decreased even more in 1993. Tbis development bas oot only occurred at Leyland DAF. The selling market for trucks and buses in Tanzania bas decreased as a whole the past few years. With 1993 as the year with the lowest sales.

Several arguments can be found to explain this crisis. First, the economie crisis in the world is affecting the financial position of truck and bus customers in Tanzania. Secondly, the increased competition and costs in the transport sector reduce the protits. Tbirdly the increased number of importers of trucks and buses increases the competition on the truck and bus selling market. Finally, other constructions of purchasing vebicles, like direct importing (under donor aid) and importing used vebicles, are undermining the regular import and sales.

A grapbic presentation of the alternative constructionsof purcbasing vebicles is given in tigure 5.8

ILeyland-DAF Leyland-DAF I JusER International Ltd. Tanzania Ltd. L I I Jl 1t,, !i IDirect import I: : I I

'Importvehicles med r

__ Goods flow ___ Good flow Local currency ---Foreign currency

__ Money flow ___ Money flow Local CWTency --- Foreign c=ency

Figure 5.8: Import constructions of truck and buses. Chapter 5: Leyland DAF Tanzania Ltd. 45

Leyland DAF Tanzania Ltd. is functioning as a intermediate between the manufacturer of Leyland DAF vehicles and the customer (the ultimate user). The customer pays Leyland DAF Tanzania Ltd. who in turn pays the manufacturer Leyland DAF. Until now, it is still possible to finance the trucks and buses in local currency (Tsh.) with, normally, a deposit of 50 %. Leyland DAF Tanzania Ltd. is converting the local currency into foreign currency to pay the manufacturer. The trucks and buses are shipped to Leyland DAF Tanzania Ltd. which is arranging the final banding over to the customer.

When avoiding this regular traject of importing, the service of Leyland DAF Tanzania Ltd. is oot used. This will reduce some overhead costs on the acquisition of trucks and buses. The finance of the vehicles in foreign currency, however, is the responsibility of the customer in this case. To obtain the necessary forex, customers sametimes finance their trucks and buses via donor countries. Import support programmes of donor countries, provide the foreign currency to couvert the local currency. On other occasions, donor countries donate trucks and buses to Tanzania which will also be directly imported. When purcbasing a batch of vehicles, also special agreements on the selling price can be realized with the manufacturer. Another possibility is the presence of another organization in Europe or the Middle East from which the customer is directly importing. This organization purebases the vehicles from the manufacturer and exports them to Tanzania.

When the vehicles are purchased directly from the manufacturer and imported officially, they are nevertheless checked at Leyland DAF Tanzania Ltd. for Pre Delivery Inspection. Warranty on those vehicles will also be given when the customer keeps to the service schedule formulated by Leyland DAF Tanzania Ltd. This is only valid for Leyland DAF models also supplied by Leyland DAF Tanzania Ltd. Official service can only be carried out by Leyland DAF Tanzania Ltd. so the customer bas to depend on this company.

A different strategy is foliowed when importing used vehicles. Naturally these purebase prices are far below new prices for trucks and buses. W.r.t. Leyland DAF vehicles, a significant number of used DAF trucks have been imported from The Netherlands. Models that are sold in Tanzania as well, but also models that are oot meant for the Tanzanian market. These models are oot adjusted to the African conditions. Leyland DAF Tanzania Ltd. is oot keeping any partsof these models in stock, so these vehicles cao not be serviced properly. Still, this option is interesting for many transport operators, especially for small enterprises. 46 Chapter 5: Leyland DAF Tanzania Ltd.

5.4 Repair & Maintenance at Leyland DAF Tanzania Ltd

At the moment, Repair and Maintenance (R&M) is the major activity of Leyland DAF Tanzania Ltd. Because sales of vehicles have declined, not only at Leyland DAF Tanzania but also at its competitors, most income of the company is generated from R&M. R&M bas always been an important activity at Leyland DAF because trucks and buses in Tanzania are suffering badly from poor roads, rough handling and overloading. The R&M activities carried out by Leyland DAF Tanzania Ltd. are various and the range of different trucks and buses coming in to workshop for R&M is wide. This results in a complexity of jobs and activities. In the following description of Repair & Maintenance at Leyland DAF Tanzania Ltd., the information is structured into a number of elements and sub-elements. Although Repair and Maintenance is carried out by workshop, this department is not solely responsible for it. Other departments are as well indirectly involved in this activity. So the relevant information is not only found at the workshop but also at finance, reception (as part of workshop) and parts.

In this analysis, two main elements are distinguished: Vehicle stock R&M activities These items will be analyzed in the next paragraphs.

5.4.1 Vehicle stock

The vehicle stock is the group of vehicles, trucks and buses, tbat is sold by Leyland DAF Tanzania Ltd. and will come in the workshop for R&M regularly, incidental or never. Even Leyland DAF vehicles which are not sold by Leyland DAF Tanzania Ltd., but are directly imported and checked for Pre-delivery-inspection at the company, are part of the vehicle stock. So the vehicle stock contains an actual partand a potential part for R&M.

The information on the vehicle stock, presented in the following tables, is calculated from delivery certificates, service record cards and job cards. A delivery certificate is issued when a new vehicle is handed over to the owner. Every vehicle tbat is coming for a pre-delivery inspeetion will be noted on a delivery certificate. All vehicles, sold by Leyland DAF Tanzania Ltd. and directly imported, are pre-delivery inspected. So the delivery certificates are giving an indication of the vehicles to be serviced by workshop. The service record cards are used by reception to update information on vehicles from regular customers. The job card is a document for every workshop activity, to keep a record of the serviced vehicle.

The time span of information is 1989 to 1992. The relevant information from before 1989 was difficult to get and available information was rather incidental than structural. Vehicles coming in to the workshop are also of more recent years. Owners of elder vehicles frequently don't have a budget to rnaintaio their vehicles at Leyland DAF Tanzania Ltd. and will postpone it or go to a local workshop. Besides, in 1989 the delivery certificate system was introduced. 1993 is not taken into account because 1993 bad not ended during my research and a lot of information from tbat year still bad to be processed. ,------

Chapter 5: Leyland DAF Tanzania Ltd. 47

5.4.1.1 Specifications of Leyland DAF vehicles

Leyland DAF Tanzania Ltd. is repairing and maintaining various types of trucks and buses. Most common vehicles for repair and maintenance are the Cornet bus 14.16 and 16.16 and the DAF 3300 series. The range of current Leyland DAF models bas already been mentioned in chapter 5.3.2.1: Vehicle specifications. Elder trucks are the ECD 23 Y Clydesdale, E2CD 4016 and the Superreiver. Elder buses are the Embassy and Victory. In 1988, the Cornet was introduced in Tanzania as the successar of the Victory. Still the Victory was sold in 1989. In 1989, the DAF vehicles were added to the Leyland (Cornet) products to extend the vehicle range. In 1991, the DAF TB 2100 was added to the bus range to offer a heavier powered coach or intercity bus on top of the Cornet bus range.

Between 1989 and 1992, 491 delivery certificates were issued. In table 5, this total of 491 trucks and buses are specified according to general type. The Cornet type is also specified according to separate models.

Table 5.13: Leyland DAF vehicles 1989 - 1992

General Type Number of new Type Number of new vehicles delivered vehicles delivered Cornet 351 CO MET 12.12 59 Super Cornet 34 12.13 21 FTT 52 13.12 2 FAT 5 13.13 4 FA 16 14.16 110 Victory 10 16.14 28 16.16 120 Miscellaneous 23 Miscellaneous 7 TOT AL 491 TOTALCOMET 351

Since 1989, the Cornet bas been the most imported vehicle of the Leyland DAF products. Within the Cornet range, the 14.16 and 16.16 are the favourite types. Within the DAF range, the FTT (tractor for pulling semi-trailers) is sold most. The FAT is a rigid truck and is rarely used in Tanzania and if mostly for fuel transport.

On the delivery certificates the type of operation and the type of body of the delivered vehicle is distinguished. For all (491) vehicles a selection was made on operation type and body type and presented in table 5.14. Since the Cornet 14.16 and Cornet 16.16 are the most common Leyland DAF vehicles delivered to customers from 1989 up to 1992, a selection according to operation type and body type was also specially made for these two models and presented in table 5.15. 48 Chapter 5: Leyland DAF Tanzania Ltd.

Table 5.14: Operation type and body type for Leyland DAF vehicles.

Operation type Number Body type Number 1 Urban transport 1 1 Tractor 45 2 Intercity 18 2 Mixer 0 3 Long road haulage 177 3 Box body 75 4 City service bus 49 4 Tipper 111 5 Intercity service bus 99 5 Curtain sider 9 6 Coach 1 6 Demountbody 8 7 Open tippers and 78 7 Tanker 20 onloff highway 8 Flatbed/Dropside 6 9 Bus/Coach 161 TOTAL 423 TOTAL 435 Not Available 68 Not Available 56

Table 5.15: Operation type and body type for Cornet vehicles.

Operation type Number Number Body type Number Number Cornet Cornet Cornet Cornet 14.16 16.16 14.16 16.16 1 Urban 0 1 Tractor 0 0 transport 2 Intercity 0 0 2 Mixer 0 0

3 Long road 6 50 3 Box body 1 27 haulage 4 City service 16 26 4 Tipper 0 33 bus 5 Intercity 83 1 5 Curtain 0 7 service bus si der 6 Coach 1 0 6 Demount 0 1 body 7 Open tippers 1 27 7 Tanker 0 9 and onloff 8 Flatbed/ 0 8 highway Drop si de 9 Bus/Coach 100 28 TOT AL 107 105 TOT AL 113 113 Not Available 3 5 Not Available 7 7

The general selection on operation type and body type shows that a significant number of Leyland DAF vehicles are used as long road haulage vehicles, as tippers and as service buses. One third of all vehicles delivered are buses or coaches. Of the actual vehicles coming in workshop for Repair & Maintenance durlog the time of research, more than half were buses. Chapter 5: Leyland DAF Tanzania Ltd. 49

Tbe selection according to operation type and body type of the Cornet 14.16 and Cornet 16.16 shows that most Cornet 14.16 vehicles are used as intercity service buses. Tbe body type is, therefore, a bus body. Tbe Cornet 16.16, however is mostly used for long road haulage and as city service bus (UDA, public Dar es Salaam bus company) and as open tipper onloff highway. So the use of this model is more diverse. Tbe body type of tipper can be joined with the operation of open tipper onloff highway. Tbe bus body with city/intercity service bus and the box body and miscellaneous can be joined with long road haulage operation.

Tbe delivery certificates arealso broken down into age bands. Table 5.16 presents the result.

Table 5.16: Year of delivery Leyland DAF vehicles.

Year of delivery 1989 1990 1991 1992 1989-1992 Number of new vehi- 53 147 99 188 491 cles delivered

Despite the sales of only 64 trucks and buses in 1992, 188 delivery certificates have been issued. Tbe difference of these two figures can be explained by the direct import, which is explained in paragraph 5.3.2.2, Vehicles sales. Tbe profit analysis (paragraph 5.3.3.1) shows a higher sales on vehicles in 1991 compared to 1992, but the delivery certificates issued in 1991 are half the number issued in 1992. This is caused by the direct import, which was negligible before 1992. Another factor is the time gap between ordering and financing vehicles and actually issuing the delivery certificates. When vehicles are financed and ordered at the end of the year, the delivery certificates will be issued in the next year. So objective calculation is difficult. Tbe number of new vehicles delivered in 1989 is also significantly less than in the more recent years. Tbe reasou is that the delivery certificate is introduced in 1989, so the actual figures of that year would be much larger. Tbe numbers of 1990 - 1992 are more reliable.

5.4.1.2 Condition of vehicles

Tbe condition of the vehicles depends on the age of the vehicle, the use of the vehicle and the kind of owner. However, a description of the condition will always be a subjective exercise. It largely depends on the interpretation of the person executing this exercise. Another problem is value of statements like 'good', 'reasonable', 'sufficient' etc. All these statements are subjective. Tbe description of condition, furthermore, depends on the position the observer takes with respect to the standard of condition seen as sufficient. Tberefore, this paragraph will be a general description of the condition of trucks and buses. However, the development of a metbod to measure the condition of vehicles in a more objective and comparative way wiii be advised.

With good maintenance, the condition of an older vehicle can be as good as the condition of a newer vehicle. But in case of irregular rnaintenance, it is difficult to keep the condition of a vehicle. Comparatively new vehicles from Leyland DAF Tanzania Ltd. 's vehicle stock normally have a better condition than elder vehicles. The vehicle degenerates by the use on bad roads and bad conditions and normally maintenance is done when a vehicle breaks down, which in fact is repair. Tbe owners normally are only coming for major repairs and don't rnaintaio or only rnaintaio when there is a repair or they rnaintaio at local workshop with poor quality of work.

Some owners have vehicles that are in a relatively good condition. British Petroleum with their tankers and some big transport companies have relatively new and proper rnaintained trucks. Trucks and buses in poor condition are generally owned by parastatals and smaller private companies. With the parastatals, it happens that when the budget runs out at the end of the financial year, vehicle maintenance is postponed. Tbe costs can wait until the next financial year. Small private companies sometimes simply don't have the money to rnaintaio their vehicle properly at all. 50 Chapter 5: Leyland DAF Tanzania Ltd.

The use of the vehicles is also an important factor in the condition of the vehicle. Certain vehicles, especially buses, are used under very rough conditions: bad roads, too heavy loads, too much speed, too much engine speed and somelimes incapable drivers. This reduces the condition of a vehicle very fast. Trucks are also overloaded regularly and driven with too much engine speed.

5.4.2 Analysis of R&M activities

The activities of the workshop where repair and maintenance are done are diverse and complex. The only souree which describes the activities, carried out on vehicles, is the job card. One job card can contain several activities, like different repairs and/or services. It is opened when a vehicle enters the workshop. The job cards, used as souree for this analysis, are separated into two hooks. One from 3-92 to 10-92 with 750 job cards and one from 11-92 to 5-93 with 650 job cards. So 1400 jobs in 15 months is about 93 jobs a month. Every month all the company cars are going for service which means that 25 job cards are tilled in every month for these services. This analysis, however, will focus on the R&M activities for external customers. Therefore, the service of company cars will be leftout of this study. So the reduced number of jobs is 1400 - (15 x 25) = 1025. From those 1025 jobs, only the jobs which are related toa specific vehicle are included in the research. Excluded are general jobs like cleaning workshop or adjusting injector pump without mentioning a vehicle. The effective number of jobs with an indication of a specific vehicle is 959 in 15 months. This means an average of approximately 64 effective external jobs a month in those 15 months.

To group the effective external jobs, specific classes are identified. The classes are:

Classes Explanation Services * R Repair * MF Maintenance Free: First Free Service * MA Maintenance A: A-service * MB Maintenance B: B-service * MC Maintenance C: C-service * R&MF Repair & Maintenance Free: First free service + repair * R&MA Repair & Maintenance A: A-service + repair * R&MB Repair & Maintenance B: B-service + repair * R&MC Repair & Maintenance C: C-service + repair * I Inspeetion & Repair * I&R Inspeetion * PDI Pre Delivery Inspeetion

Inspeetion and P.D.I. are different. P.D.I. is mostly done at assembly and will, therefore, not be noted on a job card since these job cards are used by workshop. Inspeetion can be a inspeetion of a specific part of a vehicle, an inspeetion of an accident, or a general inspeetion of a used vehicle. Chapter 5: Leyland DAF Tanzania Ltd. 51

5.4.2.1 Repair & Maintenance

The classes, identified in the previous paragraph, are analyzed on their frequency. The result of this analyses is presented in table 5.17.

Table 5.17: Classes of activities and their frequency between 3/92 and 5/93.

Classes of activities Job cards Job cards Total Total per group 3/92 - 10/92 11/92- 5/93 R R 221 190 411 411 MF 15 50 65 MA 7 19 26 M MB 2 17 19 131 MC 5 16 21 R&MF 31 25 56 R&MA 18 14 32 R&M R&MB 13 21 34 366 R&MC 116 128 244 I&R 16 0 16 16 I 7 2 9 9 PDI 26 0 26 26 TOT AL 477 482 959 959

Repair is considered as corrective maintenance in order to bring a vehicle back in a satisfactory condition. Maintenance (service) is considered as preventative maintenance in order to keep the vehicle in the condition to function properly. The ratio between these items is given in the next formula.

Corrective maintenance R+R&M+I&R 1.6 * Preventative maintenance M +R&M

The ratio of 1.6 indicates that Leyland DAF Tanzania Ltd. is doing significantly more repair than maintenance activities, even when the combination of repair and maintenance on vehicles is added in this calculation. An explanation for this situation can be found in the lack of interest in maintenance by the customers. Paragraph 5.4.1.2, Condition of vehicles, also discusses this maintenance issue. Frequently, (preventative) maintenance is done when a vehicle is in the workshop for repair. This means that brioging a vehicle in the workshop for maintenance only does not occur frequently. The ratios below and figure 5.9 illustrate this statement, since the percentage of maintenance only is just 14 % of the total activities. This is very low compared to the other ratios. So more than 80 % of all activities have to do with repair (repair only or a combination of repair and maintenance).

%R = 43% %M 14% %R&M 38 % % (R + R&M) 81 % % (M + R&M) 52 % 52 Chapter 5: Leyland DAF Tanzania Ltd.

percentage 100

80

80

70

60

~ •o 30

20

10

R M R&M (R + R&M) (M + R&M)

Figure 5.9: Repair & maiotenance.

5.4.2.2 Services

The service activities are extracted from the job cards aod put intoaseparate table; table 5.18.

Table 5.18: Numbers of services between 3/92 aod 5/93 :

Number Percentage

First free services 121 24% A Services 58 12% B Services 53 11% CServices 265 53 % Total Services 497 100%

The maiotenance activities are structured aod grouped accordiog to the Leylaod DAF International Ltd. maiotenance scheme. Table 5.19 cootaios the advised mileage forservices aod table 5.20 the activities to be carried out durlog those services. The fi.rst free service is the first service after delivery of the new vehicle. This service is carried out free of charge for Iabour. The A aod B service contaio the same activities as the fi.rst free service, but follow this service. The C service is a major service to be carried out every 20000 km. Table 5.20 shows the extra activities carried out durlog this C service.

Table 5.19: Maiotenance scheme

Services at

First free service 3000 km A service 6000 km B service 10000 km C service 20000 km A service + 5000 km B service + 5000 km C service + 10000 km A service + 5000 km ...... etc...... etc. Chapter 5: Leyland DAF Tanzania Ltd. 53

From all services carried out between 3/92 and 5/93, more than half are C services. For most customers, the C service is the only maintenance activity they want the workshop to do. Frequently this C service is carried out durlog repair, so the mileage is oot the reason to bring the vehicle in for service, but the occurrence of a breakdown. The A and B services are normally skipped. An exception is made for new vehicles, because warranty will only be considered if the vehicle bas retumed for First free service and first A service. Warranty cao also only be given within 30000 km or 6 months.

So to satisfy the conditions to be officially eligible for warranty, the customers have to return the new vebicles for First free service and first A service. But table 5.18 shows that only half or less than half of the vebicles coming in workshop for first free service is also coming back for (first) A service. A and B services are carried out more incidentally than structurally. According the maintenance schedule, these services should also be carried out frequently.

It cao be stated that customers of Leyland DAF Tanzania Ltd. are oot following the maintenance schedule. Tbey are brioging their vehicles in workshop for service when tbey think it is necessary or when an opportunity arises. This service mostly is a C service. To stimulate customers to bring their vehicle to workshop for service, fixed prices for A service and B service should be con­ sidered. The cost price of C services varles to much to calculate a fixed price. Normally the C service is calculated in the repair when repair and maintenance is carried out simultaneously. It cao also be considered to give special offers or discounts on C services to customers who are following the maintenance schedule and who are brioging their vehicles in on time for the various services. The share of maintenance in the total activities of the workshop could be increased by these measures.

Table 5.20: Activities for services:

Activities to be carried out for First free A service B service C service services service Change engine oil x x x x Change oil filter x x x x Change diesel filter x x x x Clean air filter x x x x Check and tighten all bolts and x x x x outs Check differential oil level and x x x fill up if necessary Check gearbox oillevel and fill x x x up if necessary Change differential oil x Change gearbox oil x Check all liquids and fill up if x necessary Check brake lining and adjust if x necessary Check and tighten all wheel outs x 54 Chapter 5: Leyland DAF Tanzania Ltd.

5.4.2.3 Labour time for services

In order to get an overview of the Iabour time for services, tbe jobs which consist of service were extracted only from the effective external jobs. Only 100 jobs between 3/92 and 6/93 exist of service only. The remainder is a combination of service and repair and is excluded, since this Iabour time is a combination of Iabour time for service and Iabour time for repair and is not specified on the job cards. The jobs with service only have been grouped according the different vehicle models. Table 5.21 is showing the results.

Table 5.21: Labour time for services for jobs with service only.

Model Service Number Labour hours Average Iabour of jobs hours CO MET F 25 3, 3.5, 3.5, 4, 4, 4, 4, 4, 4, 4.5, 4.5, 5, 5, 5, 5, 6, 5.8 6.5, 6.5, 7' 8, 8, 8, 9, 11' 12.5 A 17 3, 3.5, 4, 4, 4, 4, 4.5, 5, 5, 5, 6, 7.5, 7.5, 8, 9, 9, 5.9 12 B 13 2.5, 3, 3.5, 4, 4, 4, 4, 4.5 4.5, 5, 5, 5, 6, 8 c 14 3, 4, 4, 4.5, 4.5, 4.5, 4.5, 5, 5, 5.5, 6, 6.5, 7, 8 4.9 SUPERCOMET F 4 13, 13, 13, 13 13.0 + change valve cover gasket PTT 3300 F 16 4, 4, 4, 4, 6, 6, 7, 7, 7, 7, 7, 7.5, 8.5, 8.5, 9, 10 6.7 A 2 5, 11 8.0 c 2 4, 7 5.5 TB 2100 F 1 6 6.0 A 1 6 6.0

Normally no guarantee is given to the customer w.r.t. tbe time a job will take, because it is unpredictable to teil before the service or the repair how long the activity will to take. During tbe service or the repair, other defects can be detected that have to be repaired and that slow down the process. Practical probieros can also delay the service or repair. When parts are not in stores, for example, a delay will occur. The parts have to be purchased locally or ordered in the UK or Holland by airfreight. Another possibility is ordering spare parts for uncommon vehicles in neighbouring countries. Leyland DAF companies in Kenya or Malawi are sometimes contacted for uncommon parts. Normally, the customer is given a date to check if the vehicle is ready. Exceptions are made for small jobs when spare parts are available. These jobs are mostly carried out in time. In that case a date to collect the vehicle is given. However, it can take several hours to one or two days to calculate and account the total price and to make an official invoice. In the mean time, the vehicle is not allowed to leave workshop because it can be difficult to collect the money when the vehicle bas already left. Chapter 5: Leyland DAF Tanzania Ltd. ss

5.4.2.4 Standard operations and major repairs

At Leyland DAF, there are no standard operations except for services (See paragraph 5.4.2.2). There are fixed activities to be carried out at the various services but there are no fixed Iabour times for those services. The Iabour time for service depends on the vehicle and its condition. Extra repair to be doneon the vehicle for service, will also extend the Iabour time.

The operations for repair are so diverse that standard operations cannot be distinguished. Besides, practical problems during the repair frequently force the mechanics to improvise. However, there are certain defects that occur more often than others. Those major defects are selected from the job cards. A calculation of the frequency of those defects between 3/92 and 5/93 is made.

Table 5.22: Major repairs.

Major repair Job cards 3/92 - Job cards TOT AL % of Total 10/92 11/92- 5/93 repairs

Waterpump 8 23 31 3,9% Brake lining and/or 29 29 58 7,3% brake system (overhaul) Springs ( + hangers, 6 8 14 1,8% bolts etc.) Shock absorbers 17 17 34 4,3% Propellershaft 41 29 70 8,8%

Total major repairs 101 106 207 26,1 % TOT AL REP AIRS = .R + R&M + I&R = 793 job cards

The work that is contracted to others firms is done because of several reasons. First, the equipment to perform the activity is too specific and is not profitable to possess. Second, work to be contracted toother firms does not occur very often, about once or twice a month. Jobs that are contracted to other firms are: a. calibrating injector pump for a special engine. The recurrent injector pumps are calibrated at Leyland DAF; b. checking planeness of cylinderhead and plane if necessary; c. check and align propellershaft; d. body building; e. body repair; f. painting vehicles; g. straightening chassis.

Ad. e, f and g: The assembly department at Kilwa road is in the process of taking over these activities. 56 Chapter 5: Leyland DAF Tanzania Ltd.

5.5 Leyland DAF Tanzania Ltd. and economie liberalization

Two aspects of the economie liberalization were of particular importance for Leyland DAF Tanzania Ltd.: greater competition in the transport sector and the continuous devaluation of the Tanzanian shilling. These aspects caused a drop in profit, resulting in a drop in purebase of new trucks and buses, whicb resulted in a decrease of sales for Leyland DAF Tanzania Ltd. Figure 5.10 is explaining the impacts of economie liberalization on Leyland DAF Tanzania Ltd. and on transport operators.

The position of monopoly within the granted sector of the selling market of trucks and buses (see paragraph 5.2: History) ended with the introduetion of economie liberalization. The economie liberalization made it possible to establish free competition. The transport operators and vebicle importers, therefore, got new competitors. Until 1991, new establishments of road transport companies resulted in more sales of trucks and buses and new investments. Leyland DAF Tanzania Ltd. increased its vehicle sales by the end of the eighties. New opportunities in the transport sector, partial cancelling of restrictions, were the reason for purcbasing new trucks and buses by transport operators. Less restrictions meant more opportunities for import, transport routes, free competition. The years 1990 and 1991 have also been profitable for Leyland DAF Tanzania Ltd. with reasonable sales.

On the contrary, new importers, mostly importing Asian vehicles, have been established after the start of the economie liberalization. They are operating in the light and medium range truck and bus market segment. Recently, Asian makes are penetrating the heavy range truck market segment as well. Leyland DAF Tanzania Ltd., like every importer of truck and buses, is suffering from this competition in its sector. lts share in the total truck and bus selling market decreases inherently.

The establishment of free competition also increased the possibilities to import vebicles and parts. The restrictions on import Heences were loosened and a start with support of import was made. Difficulties in obtaining import Heences vanished, so vehicles and parts can be imported without considerable limitations. The bottle-neck on importing vehicles and parts bas now shifted towards financial constraints and custom restrictions. All shipments with a value of over $ 2000, = have to be inspected and an import licence bas to be granted. The inspeetion is to assure customs that the realistic value of the imported parts is calculated for import duties. A lot of imports were packed in packages with a value of less than $ 2000, = to avoid the import duties. Recently this level of $ 2000, = is lowered by the government to $ 500, =. For Leyland DAF Tanzania Ltd., this means increased import costs because of the costs of inspeetion and a delay in arrival of parts because of inspeetion time and more complicated administrative procedures.

Besides the continuous devaluation of the Tanzanian shilling, Leyland DAF Tanzania is afflicted by other financial constraints. Until recently, the main financial problem, not only at Leyland DAF Tanzania but also in the Tanzanian economy, was to conven the Tanzanian shilling to foreign currency in order to finance the imports. Three systems are available for this procedure: 1. Bureau de Change 2. O.G.L. (not woricing any more at the moment) 3. Development aid funds ad.1 These bureaus the change are licensed since one year and forex is directly available in these bureaus. But is it very expensive to conven forex this way. Leyland DAF rarely uses this method, except in cases of emergency of importing spare parts. The exchange rateis approximately 20 % bigher than the banicing rate at the Bank of Tanzania. ' I Chapter 5: Leyland DAF Tanzania Ltd. 57

11 economie liberalization I I ~ l; more free devaluation of competition local currency f----- I (T sh.) ,!; J more transport increase of price increase of operators fuel price imported spare J parts and tires more transport I same transport I I capacity demand I I w lower capacity same revenue I utilization transported volume I T \I! 'I, decrease of I increase of opera- revenue tional costs I km. r

~ \ more vehicle increase of trud importers decrease of profit and bus selling prices I I ,,, new investments by transport operators postponed or stopped ~ Impacts on transport operators and Leyland DAF Tanzania Ltd. I I I I I reduction of decrease of look for shift to shift to maintain old repair & purchase of more credit purchase of purchase of trucks whid maintenance new trucks facilities to directly imported should be budget finance imported used trucks replaced new trucks new trucks I I I I I Jl lf decrease of :

Figure 5.10: Influence of economie liberalization on sales of Leyland DAF Tanzania Ltd. and on the condition of trucks from transport operators. 58 Chapter 5: Leyland DAF Tanzania Ltd.

ad.2 The O.G.L. (Open General License) was functioning until recently. The NBC (National Bank of Commerce) and the Cooperative Rural & Development Bank were the two local banks which controlled this system. The following procedure to conven local currency to foreign currency was followed. Rundred per cent of the money to be convened bad to be paid in advance. In the beginning of this system, sametimes a 20 % deposit was enough to get the total amount of forex and the remaining 80 % was convened into a loan. Since the O.G.L. could oot collect large amounts of these loans, the 100 % deposit was introduced as a precondition. The necessary forex was provided by several European countries which were supponing this system. They donated forex via their own Central Bank to the Bank of Tanzania which administrated the O.G.L. The UK was the major provider of forex. Obtaining forex through the O.G.L. system proved to be very difficult, so Leyland bas used this system only once. The allocation of forex by the O.G.L., after depositing 100 % of local currency in advance, could take 6 months or longer. Sometimes, the money was never allocated. The exchange rate in this system, bowever, was better than at the bureau de change, because the O.G.L. was calculating the lower bank rate. Now the exchange rates of the O.G.L. and the bureaus de change are equal, so the O.G.L. is oot attractive any more. ad.3 The last system concerns development aid. In this group, the major providers of forex are:

* E.U. aidfunds * Dutch aid funds * German aid funds * U.S. aidfunds * British aid funds * Scandinavian aid funds * Japanese aid funds For E.U. aid funds, 105 % of the money to be convened, bas to be given in deposit. This extra 5 % is a margin for devaluation durlog the conversion time. When the money bas been assigned it takes about one month to get the forex. The E. U. aid funds are restricted to companies or products from E.U. countries. Wben possible and when assig­ ned, Leyland DAF uses these development aid funds. Dutch aid for example, bas been used frequently in 1992 and 1993. To be eligible for these aid funds, tenders with specification of vehicles and parts to be imponed have to be approved by these aid funds. The conversion rate is better than at the bureaus tbe change. Before the UK joined the O.G.L. system, they granted forex under these development aid funds. Leyland DAF Tanzania Ltd. took advantage of this position, since a eertaio form of tied aid was possi­ ble. Since the O.G.L. is oot active any more, Britisb aid bas returned to these development aid funds.

With the levelling of official exchange rates and commercial exchange rates, the financial constraints have shifted to the availability of Tanzanian shillings. The probieros of converting Tanzanian shillings to foreign currency are diminished but limited credit facilities are the current bottle-neck. The gaveroment bas implemented new measures to tighten the amount of Tanzanian shillings in circulation. By increasing the minimum reserve requirement for banks and financial institutions from the 4 to 10 per cent, among other measures, Tanzanian shillings will be more bard to obtain. By this measure the gaveroment is aiming at an increase of interest rates and a reduction of inflation. Credits at banks will, therefore, be more difficult to acquire. Leyland DAF is afflicted by this policy because it needs credits at the bank to purebase forex for import of parts and vehicles.

All the aspects mentioned, tagether with a crisis in the world economy, caused a significant decrease of sales and profit of Leyland DAF Tanzania Ltd. since 1991. This crisis in the world economy affects the Tanzanian economy, whicb in return affects the purebase pattem of road transpon operators and the sales and repair and maintenance revenue of Leyland DAF Tanzania Ltd. Chapter 5: Leyland DAF Tanzania Ltd. 59

Besides the decrease of sales of Leyland DAF Tanzania Ltd., partly as a result of the impacts of economie liberalization on transport operators, the aspects also have an impact on the condition of vehicles from transport operators. The condition of their vehicles deteriorates because of financial difficulties. The importance of specified repair & maintenance activities and sufficient budgets to carry out the necessary activities is known insufficiently. Chapter 6: Assessment of the condition of trucks and buses, will more specificately deal with the condition of trucks and buses in Tanzania.

Economie liberalization is not only resulting in negative effects. For the transport sector in genera!, some positive effects can also be mentioned. The benefits, however, are more contributing to the Tanzanian economy than to the transport sector or Leyland DAF Tanzania Ltd. These effects are not part of my research and, therefore, only a global indication can be given. The main positive effect of economie liberalization is the increase of transport capacity. Side effects of this increase could be a better distribution of goods and passengers at lower tariffs of transportation. Since the competition and transport capacity have increased, more trucks and buses are available to transport goods and passengers at more competitive prices. Crop haulage from rural to urban centres, however, is not subscribing this better distribution, since Cooperative Unions were involved in erop haulage and they have collapsed. This problem is extensively discussed in paragraph 7.7: Current bottle-necks in private road haulage.

5.6 Conclusions

Leyland DAF Tanzania Ltd. bas profited from the economie liberalization just after its introduction, but this proved to be temporarily. Leyland DAF Tanzania Ltd., like other importers, is afflicted by decreased sales and a reduced financial position. Competition is stiff in its sector, which also reduced the share of Leyland DAF Tanzania Ltd. in the truck and bus sales market.

A general positive effect of liberalization at this time is the elimination of the lack of transport capacity in the road transport sector. Free competition bas cleared this gap, and even overcapacity is arising now. The transported volume bas not changed significantly the past few years so this overcapacity is causing capacity under utilization. Negative effects are the decrease of the financial position of transport companies, road transport operators as well as truck and bus importers and the decrease of the condition of the trucks and buses in Tanzania.

The determination of effects of liberalization on the economy in Tanzania, is not specificately mentioned as part of my research. General observations on prices and availability of products, show an increased availability of products since liberalization. The increase of prices of consumer goods and services since liberalization is approximately equal to the previous period. 5 The price development of specific imported products and luxury goods etc., however, is unknown. Consequences of liberalization on the mobility of people and bousing opportunities are not mentioned in this research. Further research on these items is recommended.

The overall condusion bas to be negative. Resuming the period from the start of the economie Iiberalization until now, Leyland DAF Tanzania Ltd. bas not gained from this new situation, but on the contrary is afflicted by it. The entire road transport sector bas not been served by the liberalization policy until now, apart from the positive effect of increase of transport capacity.

5 General index of the National Consumer Price Index: Percentage Changes 1977 - 1991, Bank of Tanzania Economie bulletin for the quarter ended 31st march 1992. Chapter 6: Assessment condition of trucks and bus es 61

6. Assessment condition of trucks and buses

6.1 Introduetion

From general observations one gains the impression that individual commercial vehicles and entire fleets in Tanzania are in a poor state of maintenance. Shortcomings that occur regularly are: no lights, wom tires, poor brakes, leaking exhaust pipe, heavily smoking engine, poor suspension and missing items like mirrors, indicators and side windows. The very bad roads, overloading and poor maintenance are largely to be blamed for this situation.

Minor repairs are often done in local workshops, using ioferior parts and questiooable craftsman­ ship. Major repairs are usually done at the truck and bus suppliers workshops, because only these have the skilis and knowledge to do these repairs. Preventive maintenance is done occasionally, with exception of large road haulage companies and some parastatals. Most of these have their own maintenance workshop, some make use of the suppliers facilities.

When descrihing the condition of commercial vehicles difficulties occur. A general description of the condition is a subjective exercise and descriptions are therefore difficult to compare and are even more difticult to rank. A checklist to assess the condition of vehicles in a more objective and structural way would be a start to overcome these difficulties.

In this chapter, to have a theoretical framework for the development of the checklist, theoretica! aspects of maintenance are discussed. This is foliowed by a description of the actual maintenance situation in Tanzania related to maintenance theory. Before the development of the checklist, aspects of condition assessment and requirements of trucks and buses are discussed. The preconditions of the checklist are foliowed by the eventual development and implementation of the checklist.

6.2 Maintenance theory w .r .t. trucks and buses

In this chapter, all definitions, categories, etc. from general maintenance theories are interpreted and linked to vehicles as objects of maintenance.

Definitions In literature, various definitions of maintenance are given. Our definition is based on the aims and processes of mainteoance and is focused on trucks and buses. This results in the following definition of maintenance:

Maintenance is the total of activities serving the purpose of retaining trucks and buses in, or restoring them, to the state that is considered necessary for fulfilment of their transport function. 1

'Restoring to the state' corresponds to corrective maintenance and 'retaining in the state' corresponds to preventive maintenance. Corrective maintenance is similar to repair and aims to eliminate breakdowns. Preventive mainteoance is similar to maintenance used in the context of Repair & Maintenance in Chapter 5 and aims to decrease the possibility of a failure in the period after preventive maintenance. This automatically results in maintenance before breakdowns. The state or condition of a truck or bus is the condition of the physical characteristics of the truck or bus, that are considered relevant for fulfilment of its transport function. The state of trucks and buses, considered necessary for fulfilment of a transport function, varles for different users (see also paragraph 6.5).

Bertrand, Geurts en Monhemius, Onderhoud en Logistiek pag. S 62 Chapter 6: Assessment condition of trucks and bus es

The definition of maintenance does not imply that maintenance is automatically effective and effi­ cient. Whether maintenance is efficient or inefficient in a given case depends on the 'consideration', which depends on tbe criterion applied for the evaluation of the efficiency. In fact, efficiency is weighing the reduction of failures against the costs of maintenance. The effectiveness depends on the execution of the proper maintenance activity.

In addition to the definition of maintenance, failure and breakdown are specified. We speak of a failure when a truck or bus is no longer in the state that is considered necessary. We speak of a breakdown when a truck or bus is not able to function any more.

Maintenance polides When corrective or preventive maintenance is carried out, a number of activities have to be initiated. The structure of these activities for one maintenance level is shown in tigure 6.1.

I I MAINTENANCE MAINTENANCE EXTRA : ACTIVATION ACTlVITIES NORMAL ACTIVITIES __.-...."---1--3>1 failure event

prevenlive ---..--"---;--:;>~ maintenance yes generation execution corrective maintenance operati ons

Figure 6.1: Maintenance activities structure

For decisions concerning actions and time schedules of preventive maintenance operations, a maintenance conception is necessary. The maintenance conception of trucks and buses is the total set of determined directives which prescribe the operations on those trucks and buses to be carried out and how the need for those operations is activated. In other words, it is descrihing the way the trucks and buses are expected to be maintained. This maintenance is preventive as well as corrective maintenance. Chapter 6: Assessment condition of trucks and buses 63

Broadly the following strategiescan be distinguished: 'Wait and see', which means that no preventive maintenance is performed and that no maintenance will be considered until the event of failure. Opportunistic policy, which means that maintenance does not start until the event of failure, but at that time preventive maintenance is executed in addition to corrective maintenance. Preventive policy, which means that part of the maintenance is executed in the non-failed state with the objective of preventing or reducing failures.

The strategies are arranged in order of complexity of decisions. 'Wait and see' is a very simple strategy since the only decision is to repair or not to repair. This decision depends on theevent of failure. The decisions with respect to the opportunistic policy are more complex since other decisions on preventive maintenance have to be taken when a failure occurs. Preventive policy is the most complex policy. Anticipation on failures is done and decisions are taken in advance of failures contrary to the other polides which take decisions afterwards. The maintenance concep­ tion serves as a guideline for these strategies, which implies that the maintenance conception for a preventive policy will be more extensive than fora 'wait and see' policy.

The maintenance conception contains specific types of maintenance. A discussion on the metbod to develop a maintenance conception would go too far is not relevant. Only the content of a maintenance conception will be discussed in this chapter.1 In a maintenance conception, maintenance regulations are categorized in: faiture based maintenance (FBM), which initiates maintenance by the event of failure; endurance based maintenance (EBM), which initiates maintenance by the expiry of a specific application time. It is based on the statistica) prediction of failure behaviour. The faiture rate is the key factor. colidition based maintenance (CBM), which initiates maintenance by arriving at a specitic condition. It is based on the mechanistic prediction of the failure behaviour. A charactenstic property or failure-predicting-variable is the key factor.

The failure rate is the intensity in which failures occur dunng life time. An increasing faiture rate for a truck or bus means that the Jonger the truck or bus is in use, the bigger the chance that a fait ure will occur.

A characteristic property or failure-predicting-variable is a measurable physical quality from which the course is predicting the event of failure.

The qualitication of the three categones of maintenance can be explained by tigure 6.2.

The maintenance regulations are potentially effective when the three categones of maintenance are initiated according tigure 6.2. When the consequences of a faiture are small, faiture based maintenance is to be chosen. In case of severe consequences, a further selection bas to be made. Only when the truck or bus is functioning with an increasing failure rate, endurance based maintenance is effective. The tinal selection is the presence of a failure-predicting-variable. In case a failure-predicted-variable is present and is measurable, condition based maintenance can be initiated. It is clear that in several occasions more than one category of maintenance can be chosen. The three categones of maintenance regulations will be discussed extensively in the following paragraphs.

2 For information on the development of a maintenance conception, see Literature (Onderhoud en Logistiek Chapter 11 ). 64 Chapter 6: Assessment condition of trucks and bus es

failure

small

FBM x EBM x x CBM x x FBM : failure based maintenance CONS. : consequenses EBM : endurance based maintenance IFR : increasing failure ra te CBM : condition based maintenance FPV : failure predicting variabie

Figure 6.2: Qualification of categones of maintenance

Failure based maintenance Failure based maintenance exists of corrective maintenance only. lts activities are detection and inspeetion of failures and repair of those failures. Within corrective maintenance, urgent corrective and delayed corrective maintenance can be distinguished.

Endurance based maintenance Endurance based maintenance exists of both preventive and corrective maintenance. Preventive maintenance is specified and activated and corrective maintenance is activated for the rest of the failures that still occur. It was already stated that endurance based maintenance is only effective when an increasing faiture rate is present. This means that an increase of the period a truck or bus is in use, results in an increase of the chance on an event of failure.

The use of endurance based maintenance results in the selection of a periOOicity for maintenance. When the periOOicity is too long, too much failures will occur. When, however, the periodicity is too short, potential lifetime is thrown away by reptacement of parts, the truck or bus is out of use too frequent for maintenance and the maintenance costs are too high. An optimal balance bas too be found between a periodicity as long as possible and the event of failures. In practice, the determination of such a periOOicity is done by trial and error. When a lot of identical trucks or buses are in use, on one or two a trial and error policy for a optimal periOOicity can be tested and afterwards introduced on the other trucks or buses.

Endurance based maintenance can be used for services on trucks and buses since an increasing faiture rate is present at trucks and buses. The longer trucks and buses are not maintained, the greater the possibility of event of failures. Other factors (breakdowns) which have no conneetion with services can disturb the prediction of faiture but these are unpredictable events that can happen anytime and can not be prevented (flat tyre, etc.).

For a constant arrival pattem of trucks and buses in the workshop for preventive maintenance under endurance based maintenance, the so called 'staggerüne' can be used. The staggerline is a grapbic presentation of the behaviour of the property characteristic between two preventive maintenance treatments, e.g. the mileage in a service or overhaul policy for trucks and buses. The staggerline is only valid fora group of identical units in use (trucks or buses in this case). Chapter 6: Assessment condition of trucks and buses 65

Figure 6.3 shows a case where the arrivals of trucks or buses for preventive maintenance in the near future will, in all probability, be higher tban normal, but will be foliowed by a period in which less trucks or buses tban normal will become due for maintenance. This may be prevented by takiog in service or for overhaul trucks or buses at an earlier moment tban tbe nominal end of the period. Another possibility is influeocing the use of trucks or buses in use by indicatiog whicb trucks or buses have to be used more or less intensely. In the tigure for example, the trucks or buses, which are on the left side of the staggerline and first due for maintenance, have to be used less frequently to pull them to the staggerline. The trucks or buses on the right side of the staggerline have to be pusbed back by using them more ioteosely.

service or overhaul period 0% 100%

mileage since last service or overhaul number of trucks/ buses in use

staggerline

number of trucks/ buses in service or for overhaul

Figure 6.3: Staggerline

Condition based maintenance Tbe principle of condition based maintenance is observing one or more characteristic properties of trucks or buses to predict the event of failures. Observing is done by non-destructive techniques. Tbe development of a characteristic property cao be: 1. progressive 2. linear 3. degressive 4. immediate

Figure 6.4 presents a grapb of these options. Option 4 is oot included but is a vertical Iine at a random moment. 66 Chapter 6: Assessment condition of trucks and bus es

eh cte istic Pope ty

mileage of truck I buses since in use ligure 6.4: Options development of characteristic properties

The condition is decreasing during the use of trucks or buses. The condition is represented by the characteristic property in tigure 6.4. Maintenance bas to be carried out before the fatal limit is reached since the fatal limit is the lowest permitted level and then failure will occur. In order to carry out preventive maintenance in time to avoid failures, the initiation of a control limit above the fatal limit is necessary. A possibility is to test the characteristic property after specific intervals (e.g. mileage: every 500 km.). The first time this property is below the control limit, (preventive) maintenance is due. The level of the control limit depends on the decrease of the characteristic property.

For progressive decrease (line 1), the difference of decrease at the following checks are compared in order to decide when to initiate maintenance. Because of the progressive pattem, checks have to be carried out more frequent than in the beginning. Linear decrease is to be checked with fixed intervals. At degressive decrease (line 3), it is difficult to determine the intersection with the fatal limit. Therefore, this development is not suitable for condition based maintenance. Immediate decrease is therefore not suitable for the same reason.

There are several ways to measure the actual situation of the characteristic property. The possibilities are: measuring when the truck or bus is out of order; measuring pilot group of identical trucks or buses only; measuring with intervals; periodicall y degressive progressive incidental opportunistic

In principal, every physical or chemical varlablel can be chosen as a characteristic property, when the following conditions are met: 1. relevancy with respect to the event of failure; 2. measurable, at least detectable; 3. possible to standardize, with respect to the control limit.

For the failures that still occur, despite the preventive maintenance according the condition based maintenance, corrective maintenance is initiated.

Physical variables can be: metal wear, vibration, etc. Chenûcal variables can be: oil consumption and state of oil, fuel consumption, etc. Chapter 6: Assessment condition of trucks and buses 67

Maintenance load No matter which maintenance polides and regulations are chosen, the maintenance worldoad will consist of both preventive and corrective maintenance. Repetitive preventive maintenance can be planned to structure and level the workload. Three stadia can be identified:

1. variabie maintenance, no restrictions on the moment on which maintenance is activated; 2. periodic maintenance, maintenance is activated on specified moments; 3. cyclic maintenance, grouped maintenance activities with equal total workload are activated on specified moments.

Cyclic maintenance is the best option, since the workload is and the moments of activation are better distributed in time. However, fluctuations in workload will always exist because corrective maintenance is never predictabie and is part of the total workload. The total maintenance load is shown in figures 6.5 and 6.6.

maintenance maintenance load load

time time

Figure 6.5: Total maintenance load with Figure 6.6: Total maintenance load with planning of constant preventive planning of capacity of adjusted maintenance load. preventive maintenance load.

In tigure 6.6, the preventive maintenance load is adjusted to the direct demand for corrective maintenance. When there is less corrective maintenance, more preventive maintenance is activated. In times of more corrective maintenance, preventive maintenance that can be postponed is postponed. Contracting maintenance activities to atbers is another way to level the total .maintenance load. Financial aspectscan also lead to this policy. Figure 6.6 is an ideal case, actual constraints will obscure this preventive maintenance scheduling.

Maintenance management In an industrial organization, knowledge w.r.t. maintenance is not sufficient for proper mainten­ ance. Management of maintenance is indispensable. In fact, maintenance management is the balance between the maintenance demand and maintenance offer in order to meet the intended aims and preconditions. This balance is very complex and uncertain. The four key factors, demand and supply of maintenance, intended aims and preconditions will be discussed.

Demand of maintenance originates from two sources: the unforseen event of a failure leading to a direct demand for corrective maintenance and the preventive policy leading to an indirect demand for maintenance.

Supply of maintenance exists of materials and capacities. Materials are the raw materialsen parts that are needed for maintenance. Capacities are the human skills, tools and facilities, which are used for maintenance but which are available after use for following operations. Capacities can temporarily be increased by overwork, hire of extra personnel, etc. 68 Chapter 6: Assessment condition of trucks and bus es

The aim of maintenance management is two-fold. On the one hand, minimal maintenance costs have to be aimed for. On the other hand, preconditions from operations c.q. production have to be met. Maintenance costs will be discussed separately.

The preconditions can differ from organization to organization, depending on the importance an organization gives to eertaio preconditions. There are, however, some general preconditions that are valid for all maintenance activities but are specified for trucks and buses in this case. Preconditions are: safety of trucks and buses; a minimum safety level for trucks and buses can be set by government institutions or by the organization itself. In the Netherlands, a yearly inspeetion (APK, general periodic inspection) is activated on all trucks and buses. All trucks and buses have to meet the safety level to get permission to operate; usabiüty of trucks and buses; the down time bas to be as low as possible for optimal operation. Preventive maintenance is reducing failures and unexpected breakdowns and is preferable. Down time for preventive maintenance can be predicted and scheduled; availabiüty of maintenance means; when insuftkient volume or wrong type of maintenance means are available, the proper maintenance operations cao not be carried out at the proper time and maintenance planning is disrupted; control of maintenance is determined by the regularity in the demand of maintenance of trucks and buses. Timing of execution of maintenance is important. The regularity is already discussed above for repeating preventive maintenance to structure and level the worldoad.

Maintenance costs Maintenance management is aiming at minimal maintenance costs. The maintenance costs exist of a direct and an indirect component. The direct component includes the costs of maintenance capacities used for the initiation of maintenance. The indirect component is merely the costs of non-availability of trucks or buses for operation. The costing aspect is complex and only brief information will be given on this aspect. A wide definition of maintenance costs is: "all expenses, necessary to achleve the necessary number of performance units of a system". In other words, all costs to keep the trucks and buses running for transportation. These expenses can be made by maintenance departments as well as by any other departments. Both investments and maintenance expenses are part of this definition. In a more restricted definition, investments are not included and only direct expenses for maintenance activities are seen as maintenance costs.

The relationshlp between maintenance costs and down time costs is usually visualized in graphs of the type of tigure 6. 7. In this figure, the cost of maintenance curve implies that down time decreases continuously to zero if maintenance costs are raised. Practical experience shows, however, that there is a limit to the down time reduction that can be reached. In reality, if the minimum of attainable down time ·is reached, further increase of maintenance will result in an increase of down time. Figure 6.8 shows this effect. This means that increasing preventiv~ maintenance does not necessarily lead to a decrease of down times: an increase of down times may result.

The central issue with respect to maintenance costs is the achlevement of the necessary number of performance units with minimal (future) costs. Therefore, the maintenance department should also be aware of the life-cycle of trucks and buses and of industrial means used for maintenance. This optimalization is not to be realised with the restricted maintenance costs only, but with all costs made to achleve the necessary number of performance units. Chapter 6: Assessment condition of trucks and buses 69

costs costs

down time ----;;> down time -----;;.

Figure 6.7: Relation between maintenance Figure 6.8: Relation between maintenance and down time costs. and down time costs (corrected).

6.3 Maintenance w .r .t. trucks and buses in Tanzania

Maintenance in Tanzania does not automatically imply the same as maintenance discussed in the maintenance theory. In the maintenance theory, maintenance exists of corrective and preventive maintenance. In Tanzania, maintenance is usually seen as corrective maintenance or, in other words, repair. But this is only one aspect of maintenance. Preventive maintenance is not seen as a necessary part of total maintenance. In this chapter, differences between the maintenance theory and the actual situation w.r.t. maintenance in Tanzania are discussed.

The initiation and activation of maintenance in the Netherlands and in Tanzania are different. The ideal case of maintenance is discussed in paragraph 6.2 but in practice this ideal case is distoned by practical constraints. These can vary from financial constraints to Jack of knowledge or a negative attitude towards the imponance of maintenance. Normally, in the Netherlands the imponance of (preventive) maintenance is realized and financial constraints are less than in Tanzania. The availability of knowledge and the possibility of long term planning are also aspects of more imponance in the Netherlands than in Tanzania. Therefore, maintenance in the Netherlands is executed on a more theoretica) basis and maintenance in Tanzania is executed on a more practical basis. The ideal case, however, is difficult to be reached. For optimal maintenance management, a maintenance conception bas to be developed to select and structure the maintenance activities. This is not discussed in this chapter. The activation of maintenance for different situations, as a result of a maintenance conception or a practical, opportunistic view, is presented in the following table for the Netherlands and for Tanzania. 70 Chapter 6: Assessment condition of trucks and bus es

Table 6.1: Comparison of maintenance in the Netherlands and in Tanzania.

·.· .. EVENT The Netherlands Tanzania ''· failures with small FBM FBM consequences: - quick to repair repair postponed until oppor- - cheap to repair tunity arises. (together with - not causing a complete major repair or sum of several breakdown of vehicle small repairs)

services and prescribed pre- preventive policy of EBM if not applicable: ventive maintenance on mileage interval 'wait and see' policy of FBM (when executed in with cyclic maintenance if Tanzania) possible. if applicable: opportunistic policy of EBM with failure as moment of initiation or on mileage inter- val.

(engine) overhauls and CBM FBM or CBM specitic failures inspeetion on: by CBM: initiation by extreme - oil quality lossof power - oil consumption - compression ratio - etc. other unpredictable failures FBM FBM

FBM: Failure based maintenance EBM: Endurance based maintenance CBM: Condition based maintenance

FBM, EBM, CBM, preventive policy and opportunistic policy are discussed in the maintenance theory. In table 6.1, the maintenance actions for the differentevents are shown. This, however, is an example of comparison between the Netherlands and Tanzania. Maintenance in the Netherlands is as divers as it is in Tanzania, but a general description of both situations can show the differences in the approach of maintenance. The event of service and prescribed maintenance in the table is added for the Tanzanian case in situations when services are carried out. Frequently, those services and other preventive maintenance activities are neglected. So often the eropbasis lies on the event of repairing failures.

In the maintenance theory, three polides were discussed: 'wait and see', opportunistic and preventive. The 'wait and see' policy is the best description of the overall maintenance activities in Tanzania. This implies that only corrective maintenance activities are performed. Opportunistic and preventive polides are sometimes used in case preventive maintenance is carried out. But in that situation, opportunistic policy is emphasized. The statistics of the Leyland-DAF Tanzania workshop activities can support this statement. Only 14 % of all workshop activities is (preventive) maintenance, 38 % is a combination of repair and maintenance and 43 % exists of repair only. This means that preventive polides are minor. A combination of repair and maintenance, as a representation of opportunistic policies, is more frequently carried out. The majority, however, is the repair of breakdowns, but breakdowns will happen under all mainten­ ance polides since failures can occur unpredictable.

Customers of an official workshop like Leyland-DAF Tanzania Ltd., are situated is the upper and middle sec ti on of the transport sector. Companies of the lower sec ti on tend to concentrate on repair only because of financial problems. For them, preventive maintenance is not a vital activity, since it only costs time and money and no impravement is achieved. They are questioning the use of maintenance if a truckor bus is still operating. Chapter 6: Assessment condition of trucks and buses 71

Maintenance on trucks and buses in Tanzania is also oriented on failure based and endurance based maintenance. Failure based maintenance is a consequence of the 'wait and see' policy. Endurance based maintenance is based on the various services to be carried out on mileage intervals. Operators itself are normally not calculating failure rates on their trucks and buses, but it is useful since vehicles have increasing faiture rates. The activities and time intervals of services are prescribed by manufacturers of trucks and buses and the users of their vehicles are advised to follow them. Condition based maintenance is difficult to implement because characteristic properties have to be observed. Condition based maintenance is normally only used for major overhauls on vehicles (e.g. engine overhaul). In Tanzania, the trucks and buses are operated until they break down and the specific overhaul bas to be carried out. In other words, where condition based maintenance could be used, it is replaced by failure based maintenance.

6.4 Aspects for condition assessment

In paragraph 6.2 it is stated that the state. or condition of a truck or bus is the condition of the physical characteristics, that are considered relevant for fulfilment of its transport function. The transport function is the moving of goods and/or passengers from point A to point B. This moving bas to be carried out under several preconditions, which will be different for various situations and organizations. Some general preconditions are that the moving bas to be done safely and without disturbances or interruptions. Other aspects, for example, can be that the moving bas to be comfortable or fast. The determination of physical characteristics that are considered relevant for fulfilment of the transport function is complex. The requirements to trucks and buses for optimal use can give a first impression.

Trucks and buses have to meet the optimum of the following requirements (arranged from maximum importance to no or little importance in Tanzania): 1. carry a maximum of cargo (passengers or goods) 2. reliable 3. safe 4. cheap to purchase, rnaintaio and operate 5. fast 6. comfortable 7. easy to handle 8. silent 9. no pollution and damage to environment

The ideal truck or bus is fulfilling all these requirements. For actual use in Tanzania specific requirements are empbasized, which also depend on the aim of operation. Safe and reliable, for example, are more important than comfortable and fast. Carry a maximum of cargo is very important but silent transportation with no pollution is of little importance. In Europe, however, comfortable and silent transportation without pollution bas high priority. Some requirements are also contradictory. More cargo means less speed or with the same speed more expensive to purebase and to operate. Fast moving also means more noise and more pollution. So concessions have to be made to reach an average optimum, specified according to the customers needs.

Trucks and buses have a given maximum level of meeting the requirements, which is part of their construction. This maximum level therefore is the 100 % level of condition. The requirements can be translated to the physical characteristics. For this purpose, the truck or bus is divided into groups of teehoical components. This division is not made on the requirements, but on the teehoical components representing a separate function within the vehicle or a specific system. Within those groups, items are selected which are relevant to meet the requirements. Every item can meet one or more requirements. Evaluation of the condition of these individual items will give an indication of the overall condition of the truck or bus. A list with all selected items is not presented separately for these items are part of the final checklist condition of vehicles (see appendix C). 72 Chapter 6: Assessment condition of trucks and bus es

6.5 The desirabie condition in various settings in Tanzania

The pre-conditions of transport are different for various situations and organizations. Also the eropbasis on specitic requirements can vary. Therefore, the desirabie condition is not simHar for all organisations. Four relevant groups in the transport sector are identified. For these groups, the desirabie condition will be discussed.

6.5.1 Leyland-DAF Tanzania Ltd.

Leyland-DAF Tanzania Ltd. is interested in customer satisfaction. Complaints of customers have to be reduced to a minimum. Reliability is, therefore, very important. The repair and maintenance the customer is authorising Leyland-DAF Tanzania Ltd. to carry out, can be insuftkient to achleve an acceptable level for Leyland-DAF Tanzania Ltd. First of all, the company wants the trucks of its customers to be safe and reliable. Accidents and breakdowns can be reduced by fulfilment of these requirements and result in less probieros with customers on accidents and breakdowns. This also results in keeping a good reputation w.r.t. quality and reliability of the Leyland-DAF trucks and buses. Customers, for example, nonnally only want to have instant breakdowns repaired. Underlying failures which will result in the near future in breakdowns are usually not repaired. Leyland-DAF Tanzania Ltd., however, emphasizes the future probieros and is interested in repairing. Summarizing, Leyland-DAF Tanzania Ltd. is interested in a high level of condition of trucks and buses of its customers for its own sake and for the customers.

6.5.2 Public road haulage and passenger transport companies

In general, public road haulage and passenger transport companies are less interested in a good condition. A good condition means significant investments in new trucks and buses and expen­ diture for maintenance. A lack of budgets for maintenance and a lack of interest in maintenance result in an acceptance of a lower level of condition. It is sufficient when a truck or bus is able to function or when a reasonable amount of the truck or bus fleet is able to function. Preventive maintenance and extensive repair are frequently notbeen carried out.

6.5.3 Large private road haulage operators

Large private road haulage operators have a significant number of vehicles and therefore have a large budget for investment and maintenance. These large private road haulage operators are normally operating on long distance transport. International road haulage and interregional passenger transport need reliable trucks and buses: breakdowns half way are very expensive. Therefore, these large private road haulage operators are normally interested in some expenditures on maintenance to achleve a reliable condition of trucks and buses. A faiture that can cause a total breakdown of the truck or bus is therefore subject of repair. Financial probieros however, are often debit to poor maintenance and a poor condition.

6.5.4 Small private road haulage operators

Small private road haulage operators usually don't maintain their trucks and buses in a structured way. Their small budgets and lack of interest in maintenance frequently results in poor maintenance. Because of the local structure of the transport, instant breakdowns are less expensive than with distance transport. Small private road haulage operators are, therefore, often satisfied with a condition that is just reaching the level to operate. The requirements reliable, safe, fast comfortable, etc. are consequently not met. Chapter 6: Assessment condition of trucks and buses 73

6.6 Development of a system for assessing the condition of trucks and buses

The items meeting the stated requirements in paragraph 6.4, are translated into a checklist to assess the condition. This checklist will be the instrument to assess the condition of trucks and buses. Before developing this checklist, its preconditions have to be determined. These precondi­ tions are necessary in order to achleve a checklist that cao be used practically. lt also bas to cope with some practical preconditions which have to be taken into account. For practical implementation of the checklist after development, it is important to take these preconditions into account while developing the checklist. Otherwise, the checklist will be developed as an theoretical instrument which will be far too complex and far too extensive to be used in practice. The following preconditions were taken into account:

1. Completion of the checklist within one hour. If it takes more than one hour, it is too time consuming to check a fleet of vehicles.

2. Checklist to be tilled in by marking only. This because writing and commenting in the checklist will inevitably result in an additional factor of subjectivity. The comments for repair advise after completion of the checklist will have to be written, but this is an additional aspect. It results from the marks.

3. Since a test drive is not possible, checking bas to be carried out by just lifting the cab or bonnet and by running the engine. This precondition is mentioned because the vehicles will be checked when they are in the workshop for service. Usually it is oot possible to test drive a vehicle that is in workshop for service because roeebanies are working on the vehicle.

4. For checking, only a jack, crowbar, screwdriver and tape measure will be used. By restricting the tools used, the checklist will be developed on visual aspects. It will be too time-consuming to remove parts for check up. The checklist will also be too complicated when using more tools. Finally, more specialized tools may oot be available.

The checklist Condition of Vehicles is developed by a practical methodology. First, seven main groups of components within a vehicle were identified. Each of these seven main groups have there own functions and most are a combination of several sub-systems. These sub-systems are grouped together in a specific way related to their combined functions w.r.t reliability and safety and because of the functional links between aspects. The main-groupg4 are:

1. Brakes, steering; 2. Tires, wheels; 3. Chassis, transmission; 4. Engine, gearbox; 5. Electrical system; 6. Cabin; 7. Superstructure, bus body.

The group brakes and steering, for example, are grouped together because both sub-systems are very important and have a strong effect on the safety of the vehicle. The sub-systems engine and gearbox, however, are grouped together on a logical basis. They are connected to each other and cao easily be checked together.

4 These main groups and sub-systems can also be found on the front page of the checklist Condition of Vehicles, Appendix C. 74 Chapter 6: Assessment condition of trucks and bus es

For each of the main groups, an extensive list with all items affecting the condition of the specitic group is formulated. The items which affect the condition most and which can be checked in a not too complicated way are representing the groups. When all the items in a group are correct, the group is classified at 100%. This means that the group is functioning as it should and that it bas the same condition as that group of a new vehicle. For every item within a group which is not correct, a value will be subtracted from 100 %. To every answer possibility corresponding to an item, a value is attached. This value depends on the importance of the fault. When, because of a fault, a group can not function any more, the score of the group will be 0 %. Or in other words, 100 % will be subtracted. With minor faults, a smaller amount will be subtracted, which depends on the influence of the fault on the functioning of its group. So the score of a group will be 100 % minus the values off all the faults within that group. The checklist Condition of. Vehicles is given in Appendix C.

6. 7 Implementation of checklist Condition of Vehicles

The checklist can be implemented in different situations and for individual vehicles and vehicles fleets. The checklist was implemented at the bus fleet of UDA. UDA is the public bus company of Dar es Salaam, Tanzania.

6. 7.1 Practical relevancy

The practical relevancy can be split into the relevancy for Leyland DAF Tanzania Ltd. and the relevancy for fleet-owners. The checklist was tried out at Leyland-DAF workshop and could be implemented at the workshop and at the fleet owners.

6.7.1.1 Leyland DAF Tanzania Ltd.

When implemented at Leyland-DAF Tanzania Ltd., the checklist bas two functions.

1. For individual vehicles: assessment of a customers vehicle with an additional repair advise. 2. For a vehicle fleet: overview of the condition of vehicles from customers.

Ad.1 The checklist can be useful when a customer of Leyland DAF Tanzania asks for a general assessment of bis vehicle or when he wants to estimate the extent of work for a major repair. When the workshop bas completed the checklist, the customer can be informed about the state of the vehicle and a repair advice can be given. A cost estimation of the repair can be added but is not included in the list. The general condition of a specific vehicle can also give an indication on the use and maintenance of the vehicle. In case of warranty decisions the results of the checklist can help to make a more objective decision.

Ad.2 Executed on several vehicles of a customers fleet, it is possible to get an overview of the state of those vehicles. Vehicles of high and low quality of that fleet can also be distinguished. The best way to check all those vehicles is to check them when they are coming in for service or repair. It is also possible to run the checklist on vehicles from the same type (for example the Cornet 16.16 bus or the DAF 3300 FTT) but from different customers. In this way, the customers with probiernatie vehicles can be identified. Chapter 6: Assessment condition of trucks and buses 75

6.7.1.2 Fleet owners

When implemented at fleet owners, the checklist also bas two functions.

1. For individual vehicles: detecting problems of individual trucks or buses 2. For a vehicle fleet: overview of the condition of the vehicle fleet ad.l Failures of individual trucks and buses can be identified and repaired. In this way upgrading the condition of the vehicle is possible by repairlog the defective items. This also benefits Leyland DAF Tanzania Ltd. by selling spares and/or Iabour. The checklist can be executed when a vehicle is in the fleet owners workshop for service or repair or when a vehicle is parked at the fleet owners yard. ad.2 When all the vehicles of the fleet are checked, an overview of the fleet can be obtained. With this information, the fleet can be monitored and vehicles to be repaired, replaced or to be overhauled can be selected. This can prevent escalating repairs and costs when a vehicle breaks down completely. Leyland DAF Tanzania Ltd. can benefit in this situation by replacing, overhauling or repairing the selected trucks in a earlier stage.

6. 7.2 lmplementation of the checklist Condition of Vehicles in a public passenger transport company.

The checklist Condition of Vehicles was introduced at UDA and implemented at the workshop. UDA bas 80 buses which are supposed to be serviced twice a months. This is after every 4000 km. Every evening there is a minor inspeetion on all vehicles: air system and propeller shaft are inspected. Until the moment my research period ended in Tanzania, UDA had executed 15 inspections with the checklist. The inspections were carried out when the buses were in for service. For use at UDA, the checklist was adapted to the inspeetion of buses only. See appendix D. The results of the fifteen checklists, are presented in table 6.2.

Table 6.2: Group score for the fifteen inspected buses at UDA GROUP: 1 2 3 4 5 6 Inspeeled buses 100 100 20 100 100 100 2 50 100 95 100 75 100 3 100 100 60 90 100 100 4 100 100 70 90 80 100 5 55 100 100 90 85 100 6 100 80 80 90 80 90 7 100 30 80 90 85 80 8 100 0 40 100 100 100 9 100 100 100 90 100 100 10 100 100 70 90 80 80 ------11 65 100 45 65 20 20 12 25 70 100 60 15 80 13 40 100 45 70 50 90 14 60 35 25 100 90 70 15 60 50 80 90 100 80 AVERAGE 88 77 86 TOT AL AVERAGE 91 81 7l 93 89 95 CO MET AVERAGE RËST .·,'''50 77 ss 68 76 Chapter 6: Assessment condition of trucks and bus es

From the fifteen inspected buses, numbers 1 to 10 are Cornet 16.16 buses. Numbers 11 to 15 are buses of other makes. The groups correspond with the groups on the checklist. So for each inspected bus, the score for every group is printed. Table 2 shows that Cornet buses are performing better than the other buses. It must be stated that the Cornet buses are also newer than the buses of other makes. Group number 3 - chassis aod transmission -, bas the lowest score for all inspected buses aod for the Cornet buses. A lot of different small problems, mentioned on the checklists, have caused this score. Leaking diesel tanks on the Cornet buses are one of the major problems. Por the buses of other makes, the electrical system bas the lowest score. Items with major failures in this group are: brake lights, indicators aod bom. In the repair advice on the checklist, the inspeetor fills in the items to be repaired with its failure.

Overall major problems on all buses are:

Brake lining wom Steering free play too mucb Tires wom out Wbeel outs missing Front shock absorbers wom out I missing Black engine smoke Brake lights oot working Indicators oot working Hom oot working Mirrors broken Wipers oot working I missing

Through the results of the inspections with the checklist Condition of Vebicles, UDA realised that their buses have more unidentified failures than they assumed. The condition of their buses was also worse than they assumed. Therefore, the repair advise of the checklist is used to inspeet aod repair the failures mentioned. The intention of UDA is to increase the condition aod availability of its buses.

6.8 Conclusions

Maintenance in Tanzania is very mucb oriented on faiture based maintenance. A policy of 'wait aod see' is in general the system of maintenance. Waiting until failures occur, aod then repairlog those failures, is one option. Trying to prevent failures by initiating preventive maintenance is the other. Research on a comparison of these options, only corrective maintenance or a combination of corrective maintenance aod preventive maintenance, is recommended. The total costs over one year aod the availability of the trucks or buses cao be investigated on those two options. Afterwards, the most effective aod efficient option cao be promoted.

Por the current situation, without the specific recommended research but with the available information of the present research, more preventive maintenance is recommended. The performing conditions for trucks aod buses are very rough in Tanzania aod with bardly aoy preventive maintenance, the deterioration of trucks aod buses is significant. The implementation of the checklist condition of vebicles at UDA subsenbes this statement.

The checklist Condition of Vebicles itself proved to be effective. The implementation at UDA showed that problems of individual trucks or buses cao be detected. It cao also give ao overview of the condition of a vehicle fleet (in this case the bus fleet of UDA). Por ao general overview of the entire bus fleet, all buses have to be inspected regularly with the checklist. So far UDA is enthusiastic w.r.t. the implementation. Therefore, introduetion of this checklist in other companies is recommended. Chapter 7: Private road haulage sector 77

7. Private road haulage sector

7.1 Introduetion

Tbe private road haulage sector, as part of the transport sector, plays a vital role in the Tanzanian economy. The other sectors, Iike rail transport, marine transport and air transport are not as flexible in terros of providing services to the whole country. It is estimated that over 70 % of the estiillated 2.5 billion ton-km of total freight movement in Tanzania is by road transport. A fair amount of information is available with respect to the public sector, but the information on the private road haulage sector, on the contrary, is limited. In this chapter an attempt is made to collect more information on the private road haulage sector and to analyze the bottlenecks in this sector.

7.2 General information

Before focusing on the private road haulage sector, the transport sector will be reviewed.

7 .2.1 Transport sector

The pattem of settiement and economie activity in Tanzania gives transportation an extraordinary strategie role in economie development. Tanzania bas a large territory of 945,000 km2 with a widely dispersed population. The transport sector is servicing other sectors by transporting their products. Agriculture, accounting for 54 % of GDP, is supported by the transport sector which transports agricultural inputs and outputs. For agriculture, the transport sector can facilitate reliable and cost-effective transport of export crops from major coneetion points to the port of Dar es Salaam and can efficiently integrate rural communities with urban centres. Both aspects are presenting probieros at times.

Tanzania's transport network consistsof about 81,895 km. of roads, 3574 km. of railways, three main ocean ports (at Dar es Salaam, and Tanga) and other minor ocean and lake ports. lts transport network also bas two international airports (at Kilimanjaro and Dar es Salaam) and over 50 smaller air fields. There is also a pipeline from Dar es Salaam port carrying Zambia's crude petroleum imports. 78 Chapter 7: Private road haulage sector

7.2.1.1 Road transport sector

In order of importance, road transport stands out as the leading sector in terros of its coverage in km. and volume of goods it handles. 1t is already mentioned1 that it is estimated that over 70 % of the estimated 2.6 billion ton-km freight movement in Tanzania is by road transport. Road transport is furthennore said to handle 60 to 70 % of the bulk of agricultural crops. Road transport is also a major mode of travel since air, marine and rail passenger transport services are provided only to a limited number of centres. The road density, however, is only 2.6 km. per 1000 people for classified roads. The vastness of the country and the dispersed nature of its population, business and economie activities, add to the strategie importance of the road transport sector with respect to Tanzania's development.

The roads can be classified into: trunk roads, local main roads, regional roads, district roads and unclassified roads. Trunk roads constitute an infrastructure, created essentially to permit transport along international, national and regional routes. The network of tronk roads bas an important role in the context of international connections. The ports of Dar es Salaam and Tanga are connected with Zambia, Malawi, Burundi, Rwanda and Uganda by road. Part of these roads are tronk roads. Local main roads are the principal connections between regions or within regions. They generally link regional eentres to the network of trunk roads, or create links between trunk roads which benefits regional traffic. The regional roads are roads of regional importance, which conneet the principal urban, agricultural or industrial eentres to roads of the two preceding classes, or directly to the regional capital, while the district roads serve the districts within the regions. The unclassified roads are all other roads that do not fall in the classes mentioned.

Transportation of cargo by road or road haulage is the research area of this chapter. The private road haulage will be discussed extensively in the following paragraphs, but some general information will be presented is this paragraph too. The road haulage sector is responsible for 70 % of the total freight movement. A lot of cargo, like for the rail transport sector, is to be transported from or to Dar es Salaam port. Table 7.1 shows the general cargo transported by road passing through Dar es Salaam port between 1985 and half of 1992.

Table 7.1: General cargo transported by road through Dar es Salaam port 1985 - 6/1992 in tonnes and percentages.

Tanzania Bunm:li Rwan:la Malawi Uganda ZimNbwe Mozambique TOTAL

3,81~.000 642,000 ~~~.000 240,000 231,000 ~6.000 ~.000 6~ 10 ~.389.668

70.8" 11.9 " 2.9" 4.~" 4.3" 4.7!1 1.0!1' 0!1 0!1' 100"

Source: TIIA monthly reviews of port working, September 1992.

Most cargo transported by road through Dar es Salaam port is transported within Tanzania or even within Dar es Salaam. International transport is mainly with Zambia. Zambia is relying for its import and export mostly on Dar es Salaam port and is transporting most of its cargo by railway. Recently most international cargo is transported to Rwanda and Burundi and Malawi and cargo for Zambia is reduced. Road haulage is operated by both public and private companies, but private companies are dominating the road haulage sector. A further detailed study of the road haulage sector is discussed in paragraph 7 .2.2.

Passenger transportation by road takes place both by private and parastatal bus companies. In Dar es Salaam, Shirika la Usafiri Dar es Salaam (UDA), the public city bus company with about 80 buses, is the sole public operator. Small private urban operators, owning mini-buses (dalla­ dalla's), are competing with UDA in urban transport. After liberalization, the number of mini­ buses increased more than the buses and bas surpassed the number of buses. In regional passenger transportation, private operators are also competing with public services. In 1991, there were 81 private operators against 12 parastatals and cooperatives in Tanzania.

1 see chapter 2, paragraph 2.1: Problem setting. Chapter 7: Private road haulage sector 79

There are some big bus operators owning 5 to 10 buses, but most operators are owning only one bus, because the 93 operators in 1991 were owning 137 buses. When looking at the distribution of seating capacities most, buses have 65 seats or more (30 % of total) or have less then 15 seats (also 30 % of total). The first category are the buses for regional passenger service or intercity service. The secoud category are mini-buses for use in urban centres. The number of buses and mini-buses mentioned are registered and licensed buses. In practice part of these buses are not operating because of breakdowns. Lack of finance and Jack of spare parts are causing constraints, especially in rural areas, where the number of buses cannot cope with the demand.

Tanzania's road infrastructure bas deteriorated seriously in the last decade. The deterioration of the road networks bas been caused primarily by inadequate funding for road maintenance; a cumhersome and inefficient institutional structure for road administration; a highly centralized and bureaucratie procurement and administrative decision-making process; and inadequate teehoical capacity to carry out maintenance. For agriculture for example, the state of the roads imposes significant penalties on agricultural activities because of the effects on vehicle operating costs, delayed evacoation and damage of crops. In 1991, structured road rehabilitation was started with the Integrated Roads Project. Before this rehabilitation of roads, more than two third of the roads were impassable or unmaintainable. The IRP is still in process, but significant improvements have already been made. The state of the roads, however, is still insufficient.

7.2.1.2 Rail transport sector

The railway lines are divided into two separate systems, managed by two different organisations. Tanzania Railways Corporation (TRC) manages 2600 km. (73 % of the total network, and Tanzania Zambia Railway authority (TAZARA) handles 974 km. (27 % of the total network). TRC serves the central and northem parts of the country as well as transit traffic from Burundi, Rwanda, Zaïre and Uganda. lts haul capacity bas declined progressively from about 1. 7 million tonnes of freight in the early 1970s2 to 1.0 million tonnes in 1989. For agricultural products, it mostly carries cotton, coffee, sugar, fertilizer, cement, tobacco and petroleum. TRC is also operating passenger services. In 1990, it carried 2.5 million passengers of which 1.6 million by rail, 0.8 million by boatand 90,000 by road. In the early 1980s more passengers were carried, since the recession affected other passenger services, like public road passenger transport. TRC is also rnanaging lake transport, which will be discussed in the marine transport sector.

T AZARA operates a service that is principally dedicated to Zambian transit traffic, although it is increasingly catering to local traffic in the southem part of Tanzania. The railway line, linking New Kapiri Mposhi in Zambia and Dar es Salaam in Tanzania, was built primarily to transport goods between Zambia and the port of Dar es Salaam. The line also transports dornestic goods within Tanzania and Zambia. Most Zambian products are transported, but Zaïre, malawi and Zimbabwe also have a minor share in transport by TAZARA (together about 15 %). Zambian export transported by TAZARA is mostly copper (about 75 %). The rest are lead, zinc, cobalt and other products. The Zambian import traffic by TAZARA is dominated by fertilizer (50 %). Other imports are grain, containers and other products. The total freight performance decreased from 1.2 million tonnes in 1986 to 0.8 million tonnes in 1992. In 1990, 1.0 million tonnes of cargo was carried. The same as TRC in that year. T AZARA also carried 1.6 million passengers in 1990.

The railway system bas been unable to meet the demand for low-cost, long-distance transport of export crops and critical inputs such as petroleum products and fertilizer in recent years due to its poor operational performance. Therefore, export traffic and bulk inputs have been partly diverted to road transport.

2 In that time it was managed as part of the East African Railways Corporation. 80 Chapter 7: Private road haulage sector

7.2.1.3 Marine transport sector

In Tanzania, water transport is divided into three sections. Ocean transport is managed by Tanzania Harbours Authority (THA), coastal shipping is under the responsibility of Tanzania Coastal Shipping Line Ltd. (T ACOSHILI) and lake transport is provided by Tanzania Railway Corporation (TRC).

The three main ports managed by THA are the ports of Dar es Salaam, Tanga and Mtwara of which Dar es Salaam is much more important than the other two. Nearly all transit cargo is handled through the port of Dar es Salaam. The port is linked both to the TRC network and the T AZARA network. The port through put is the second largest on the eastem coast of Africa after the port of Mombasa, and is the second largest earner of foreign exchange in Tanzania after coffee. In 1991, 2. 7 million tonnes were imported and 1. 0 million tonnes were exported through Dar es Salaam port. The total transported tonnage of Dar es Salaam port therefore was 3. 7 million tonnes in 1991.

Table 7.2 shows the specification of the total traDsported tonnage of 32 million in percentages between 1983 and 1991. The import at Dar es Salaam port was nearly three times the export in that period. The countries that have been transporting their cargo through the port of Dar es Salaam for that period are Tanzania, Zambia, Zaïre, Burundi, Rwanda, Malawi, Uganda, Zimbabwe and Mozambique. Tanzania receives on average 577,000 tons of imparts annually and transpoets 221,00 tonsof exports annually through Dar es Salaam port.

Table 7.2: Cargo handled through Dar es Salaam port between 1983 and 1991.

DRY GENERAL CARGO BUlK OIL BUNKER OTI{ER BUlK CARGO TOTAL ALL CARGO GRAND TOT AL Impons Expons Impons Expons Impons Expor1s Impons 30 % 22% 43% 4% 0.5 % 0.3 % 0.2 % 74 % 26 % 100%

Source: THA monthly reviews of port working, September 1992.

On the Tanzanian ports, especially Dar es Salaam port, the long handling time of containers is very unprofitable. This is caused by the inefficiency of operations as well as cumhersome custom procedures.

For coastal shipping, TACOSHILI provides service with two vessels with a total capacity of 150 people. Private vessels for coastal shipping have a capacity of 850 passengers and 600 tonnes of freight. Services are operated between the ocean ports of Tanzania and the three islands Zanzibar, Mafia and Pemba.

Lake transport is carried out on , Tanganyika and Nyasa and is managed by TRC. Lake Victoria and Tanganyika, given their extension and strategie position, have a central role in the context of international connections and in the sphere of the multimodal transport network of East Africa.

7.2.1.4 Civil aviation transport sector

Given the substantial distauces between major popwation centres, aviation is an important means of transport in the country. The Corporation (A TC) is the sole provider of scheduled dornestic services. Several smaller private civil aviation companies with smalt airplanes are servicing on order. The available seat kilometres of ATC have grown at an average of 14 % per annum from about 83 million in 1977 to about 363 million in 1987. The demand for ATC services is high with an average passenger load factor of 76 % on all routes and 83 % in the dornestic market, aften resulting in an high turn away rate for customers. Despite this favourable demand for its services, ATC's financial performance is characterized by its growing deficits. Chapter 7: Private road haulage sector 81

7.2.2 Road haulage sector

My research is concentrated on the private road haulage sector, but before spedalizing on this specific sector, the road haulage sector bas to be specified. The road haulage sector can be divided into three types of traffic movements: 1. intra-regioDal road haulage; 2. inter-regioDal road haulage; 3. international road haulage. In these three types both public and private operators are involved, but for international road haulage, only private operators are operating. Figures on the trucking capacity in Tanzania are not available, but can be estimated from other sources. The Central Motor Registration Department lists the registrated trucks and the Tanzania Licensing Authority issues licenses to commercial operators. It is estimated3 that the truck popwation in 1991 was 11,300 trucks. In this tigure piek­ ups and tractors are included and can not be separated. The number is to be adjusted for serviceability with a rate of 70 %. Therefore, the effective capacity is 7,900 trucks. The following three paragraphs discuss the three types of traffic movements. The final paragraph discusses the government regulations on trucks in the road haulage sector.

7.2.2.1 Intra-regional road haulage

Intra-regioDal road haulage involves movement of goods within regions in Tanzania. 1t entails transportation of agricultural produce from villages to districts and regioDal centres, transportation of industrial raw materials and other inputs to the factorles as well as transportation of agricultural inputs and consumer goods to producing areas and consumption centres. The level of economie development, amount of produce moved within a region and the degree of connectivity between various eentres in a region, are factors that determine the intensity of intra-regioDal haulage. Intra­ regioDal movements in Tanzania are short-distance by nature and are predominantly served by road.

A major part of intra-regional transportation is concerned with haulage of agricultural produce and inputs. Cooperative unions were the major players in erop purchasing. Since 1991, however, policy changes have been made allowing private traders to purebase directly from farmers. At the moment, the cooperative unions are hardly purcbasing crops because of financial problems, and private traders are oot interested in purcbasing crops in rural areas. This means that there is a demand for intra-regioDal road haulage in rural areas which is oot met.

Around urban areas, cargo is transported both by public and private operators. RegioDal trading companies (RETCOs) under the National Transport Company (NTC) are public companies transporting mostly intra-regional. Most regions have a RETCO, but the performance is poor because of vehicle operating problems, management problems and financial problems. Private operators are usually running one truck and most of these trucks are old and in a poor condition. There are some big private operators for intra-regioDal haulage in and around Dar es Salaam. Generally, big private operators prefer long distance movements and avoid poor roads and unprofitable routes. The operators with one truck are struggling for daily cargo to transport and are normally not officially contracted by customers but are hired occasionally. Frequently, they are waiting at transfer depots for cargo. A lot of these operators are not registered and there number is un.known. They can be classified as an informal sector within a formal sector. These small local operators can offer low transport prices because they don't have overheads, like buildings, administration etc. and because they usually don't pay taxes.

3 Road Transport Study for the National Transport Corporation, Economie research bureau, University of Dar es Salaam, July 1993 page 29. 82 Chapter 7: Private road haulage sector

Tbe carrying capacity of the trucks used for intra-regionat road haulage is mostly 7 tonnes. Operators are also forced oot to have trailers because of the narrowness of roads and access of buildings. The number of trucks and operators operating in this sector is unknown. The only information available is conring from Tanzania Licensing Authority (TLA). In 1991, in the category of 6 to 10 tonnes trucks, 1094 trucks were given a license, which is oot the total number of trucks in the mentioned category. This category of trucks is normally used in intra-regionat road haulage. Since more than 70 % of the operators own one truck and operators with big fleet sizes are normally operating on inter-regionat and international traftic movements, it can be assumed that most operators in the intra-regionat section own one truck.

Tbe major problem in intra-regionat road haulage is that of poor road condition. Many regionat roads are inaccessible durlog the rainy season. Tbey also lack strong bridges and the network itself is oot well connected. Another problem is that of the inputs (fuel, spares, tires). These are oot easily available in most areas and are expensive. The rates charged are oot adjusted with changes in input prices, which causes financial burdens to the transporters. The lack of coordination of erop evacuation and inputs distribution is another problem area. Proper coordination could ease pressure on the transport system. Finally, the seasonality of business in intra-regionat road haulage is afflicting operators. Since this haulage deals mainly with erop evacuation, off-season is idle time for the operators. They could shift to inter-regionat road haulage in order to continue business.

7.2.2.2 Inter-regional road banlage

Inter-regionat road haulage refers to the movement of cargo from one region to another within the country. Movements of crops from the regionat depots to consuming I processing eentres and export points, movement of agricultural inputs to the producers and movement of consumer goods to and from various regions constitute inter-regionat transportation.

In inter-regionat road haulage both public (parastatal and cooperatives) and private operators are involved. The public sector comprises RETCOs and other parastatals with their own transport wings. Cooperative unions are also involved in regionat transport. This sector, however, is dominated by the private operators. Registration statistics of 1991 show that private operators own about 75 % of the 2985 registered trucks. In that year, 95 % of the 1322 licensed operators also were private. It must be stated, however, that the private operators are usually one rnan's com­ panies, while the public companies are having a lot of employees.

The trucks used for inter-regionat road haulage normally have a carrying capacity between 7 and 20 tons. Companies operating on international routes are sometimes also operating in the inter­ regionat road haulage sector. Tbeir trucks have carrying capacities of 40 tonnes and more. So in fact the carrying capacity ranges from 7 tonnes to over 40 tonnes. Most trucks are based in Dar es Salaam and the northem regions. The Southem regions have less vehicles, notwithstanding their great agricultural potential. In inter-regionat transport, a trailer is normally connected bebind a truck to increase the carrying capacity. Tankers for fuel and oil transport from Dar es Salaam port to regions up country, are also used in this sector. Makes of trucks operaring in Tanzania for all sectors of road haulage are presented in table 7.3

Table 7.3: A sample of truck makes in Tanzania in numbers and percentages

ISUZU SCAN IA MERCEDES FIAT BEDFORD MITSUBISHI FORD TOT AL

1475 326 5.58 61 296 251 118 17 3108

10 " 18" 2" 9.5" 8" 4" o.s" 100" Source: Central Motor Vehicle Registration Department files. Chapter 7: Private road haulage sector 83

Table 7. 3 shows that Isuzu is the truck which is used most. This truck, however, is a 7 tonnes truck ,and is therefore mostly used for intra-regional road haulage. The Bedford and Ford trucks are mostly used for intra-regional road haulage as well because of their carrying capacity and because they are normally old and in a poor condition. The other makes are more for use of inter­ regional and international road haulage. The choice of a make is also depending on the availability and price of spares and whether a make can endure the poor road conditions.

When looking at the fleet sizes of licensed operators in road haulage in 1991 , a distribution can be made based on the number of vehicles. See table 7 .4.

Table 7.4: Pleet sizes of licensed operators in 1991 Number of trucles 1 2 3- 5 6+ TOTAL in tleet

Number of 868 201 167 86 1322 operators Percentage 66 % 15% 13% 6% 100%

Source: TLA files

More than half of the licensed operators own only one truck. The inter-regional road haulage operators usually own more than one truck. So in inter-regional road haulage less operators are having more trucks per operator. The operators with more than six trucks can even have twenty of more trucks. In international road haulage, operators sometimes have more than 60 trucks.

Probierus affecting inter-regional road haulage can be grouped into three main categories: infrastructure, carrving, capacity and financing. With respect to infrastructure, the poor condition of roads is the major constraint. Poor roads cause frequent vehicle breakdowns, raising maintenance costs and some roads become impassable durlog the rainy seasons and so becomes a limiting factor in the transport sector. Since a lot of trucks are old, the actual carrying capacity is very much reduced and the trucks are costly to run. But new trucks and inputs, like fuel, spares and tires, are expensive. A lot of operators can't afford to purebase new trucks and inputs, which slow down fleet expansion. Loans are also difficult to get, due to stringent borrowing conditions. Finally, payments to private operators are often delayed and rates charged are frequently below operational costs. These problems can also be found at international road haulage.

7.2.2.3 International road banlage

4 It is estimated that about a third of goods handled in the country is transit cargo • Nearly half of this, however, is handled by TRC and TAZARA. Especially Zambia is using rail totransport its import and export, as shown in table 7.5.

Table 7.5: General cargo import by rail and road at Dar es Salaam port Jan-June 1992 (without dornestic import I export Tanzania) in tonnes and percentages.

ÏDIOIIDI!a Zombia ZaUe Bunmdi Rwmla Malawi U&mla Zimbabwe Mawnbique Talal 'loot IGial

Ral I 105,908 765 12,807 2,176 6,382 243 128.281 47"

Rolul 46,713 16,179 23,500 30,410 26,089 164 31 10 ·143.086 53"

Sou ree: Tanzania Harbours Authority.

NTC (1989}, A Feasibility Report on the establishment of a joint road haulage company to transport dornestic and international transit cargo. 84 Chapter 7: Private road haulage sector

Table 7.5 is only giving an overview of six months in 1992. Statistics of THA show that since 1987, about 54 % of all international cargo was transported by road. There is one exception in 1991. In that year, 77 % of international cargo was transported by road. International transport to Zambia was operated mainly by road, insteadof the usual domination of rail transport to and from Zambia. Railway transport to other countries was also less than normal. Organizational and operational problems could may have contributed to this shift towards international road transport. 389360 tonnes of total international cargo were transported in 1991.

Other statistkal information5 to compare the THA statistics is given in table 7.6.

Table 7.6: International haulage staristics june 1991- june 1992 (without dornestic import I export Tanzania).

in tonnes Import Export Total

container transport 236,342 235,686 472,028

total transport 581,230 577,086 1,158,314

Source: NOTCO

Since the THA staristics only cover the period for Jan-June 1992, the second half of 1991 bas to be added to these tigures to compare the THA statistics with the NOTCO statistics. The total THA tigures of 1991 are divided by two and added to the tigures for the tirst half of 1992. The theoretica! tigures for June 1991 - June 1992, according THA, are given in table 7.7.

Table 7.7: Calculated THA staristics for general cargo by rail and road june 1991 - june 1992 (without dornestic import I export Tanzania).

in tonnes Total %of total

Rail 172,932 37%

Road 293,115 63%

Total (rail + road) 466,047 100%

Source: own calculation.

The total transported tonnage (rail + road) from June 1991 to June 1992, according to calculated THA statistics, is 466,047 tonnes. This is about the same as the total transported container tonnage in the same period according NOTCO stadstics (table 7 .6). Those stadstics give a total international transported tonnage of more than two times the THA tigure. Since international road haulage is mostly transport of containers and is more concentrated on import than export, an estimate of the international road haulage through Dar es Salaam port is made from the two statistkal sources.

Calculated THA statistics show a total international transpotled tonnage by road in the period June 1991- June 1992 of 293,115 tonnes. This tigure supposed to be the sum of the tonnage of import of containers of table 7.6 withapart of the tonnage of export of containers. The THA tigure of 293,115 tonnes will, therefore, be taken as a estimarion of the total international transported tonnage by road in the period June 1991 - June 1992. The transport performance for international road haulage is estimated at 557 million ton-km for that period, because the average distance to Tanzania's neighbouring countries is approximately 1900 km. THA statistics are giving an average yearly demand of around 440 million ton-km.

5 Dar es Salaam port stalistics from NOTCO, a major international clearing and freight fotwarding company. Chapter 7: Private road haulage sector 85

The main demand for transit transport capacity is made up of neighbouriog countries' import/export volume. The maio commodities iovolved are: iodustrial inputs, fuel, consumer goods, agricultural inputs such as fertilizers, food, vegetable oil, crude oil aod various types of minerats fouod in these couotries.

The movement of transit cargo by road is dominated by private operators. Nearly all international road haulage companies are privately owoed aod a lot of them even have foreign ownership. Informatioo on these international road haulage companies is oot available. Attempts of the NTC aod the Mioistry of Transport aod Commuoications to extract informatioo from the international road haulage sector have been uosuccessful so far because the cooperatioo of the companies in this sector is oegligible.

The operators are usually usiog truck semi-trailer combinations to transport the cargo. Nearly all cargo is transported in containers. The rest is transported in tanker combinations (fuel) or as loose cargo. Interlink combinations are also sometimes used to transport cargo. This is a combination of truck, interlink trailer aod semi-trailer. This combination cao transport more cargo aod is therefore ioterestiog for transport operators, especially those operadog on international transport. The combinations have a gross vehicle weight of 30 to 70 tons, depeodiog on the kind of combination aod the cargo.

Probierus afflicting the international transport sector are the overweight of trucks, the legislated maximum gross vehicle weight aod the condition of roads. However, oot much is known about the international road haulage sector in Tanzania and its problems.

7.2.2.4 Government regulations on trucks

The vehicles used in the road haulage sector have to meet eertaio requiremeots. There are some general requirements aod specitic requirements on dimensions aod weights. The general requiremeots are dealiog with the necessary state of the trucks, items on trucks which are oot allowed aod vehicles which are oot allowed. Interestiog requirements which are presenting practical probierus in the road transport sector are the restriedons on dimensions aod weights. Maximum leogth aod weight are always the bottle-necks of the maximum total transporled cargo per truck. Recently the Road Safety Department of the Mioistry of Works bas proposed a oew set of requiremeots for vehicles wbich will be effective early 1994. The present requirements are oot so much different but the fioes on oot keepiog to these requirements are very low. Deliberate overtoading aod operatiog looger combinations of vehicles thao allowed cao be profitable because of these low fioes. This cao, however, cause dangerous situations on the roads. Bridges are desigoed for a maximum carryiog capacity of 60 tons, so overloaded vehicles cao destruct the bridges. In the present situatioo, bribiog to avoid the fine is also a common habit. The oew sets of requirements with much higher fioes aod fees, should overcome these probierus accordiog the Road Safety Department. These restrictions will be discussed in two separate paragraphs. 86 Chapter 7: Private road haulage sector

7.2.2.4.1 Dimensional limits

A practical summary of the requirements concerning dimensions of trucks will give an idea of the combinations of vehicles which are allowed to operate on a public road. Using vehicles which cao oot meet the requirements means those persons using these vehicles are guilty of an offence.

1. The turning radius shall oot exceed 13.1 m.

2. a. The overhang of a semi-trailershall oot exceed 1.5 m. b. The rear overhang of a semi-trailer shall oot exceed 50 % of the length of the semi-trailer.

3. a. The front overhang shall oot exceed 50 % of the distance between its axles. b. The rear overhang shall oot exceed 60 % of the distance between its axles.

4. The maximum overalllength of: a. a rigid vehicle is 12.5 m. b. an articulated vehicle is 17 m. c. any other combination of vehicle is 22 m.

5. The maximum overall width of a vehicle is 2.6 m.

6. The maximum overall height of a vehicle is 4.6 m.

7. The maximum overall width of a trailer is 2.3 m when the motor vehicle is less than 2.3 m.

7.2.2.4.2 Weight limits

Any vehicle bas to meet the requirements on overall weights as well as the requirements on distribution of load on the axles. These requirements are effective since 1987 and will oot be changed in the set of new requirements. The overtoading fines will become overtoading fees and they will be heavily increased. The maximum overtoad fee will be USD 1891,- for every axle or axle combination with an overload of 8 tonnes or more. The road safety department is still working on a proposal to raise this fee to a maximum of USD 35,000, =. In the present situation, the maximum overload fine is Tsh 90,000 which is about USD 200, = fora total overload of 16 tonnes. The maximum total weights are as follows:

Table 7.8:

Vehicle description Maximum Gross Vehicle Weight

Two axled vehicle 17,000 kg. Three axled vehicle 25,000 kg. Vehicle plus semitrailer with 3 axles 27,000 kg. Vehicle plus semitrailer with 4 axles 35,000 kg. Vehicle plus semitrailer with 5 axles 43,000 kg. Vehicle plus semitrailer with 6 axles 49,000 kg. Vehicle and draw-bar trailer with 4 axles 36,000 kg. Vehicle and draw-bar trailer with 5 axles 44,000 kg. Vehicle and draw-bar trailer with 6 axles 52,000 kg. Chapter 7: Private road haulage sector 87

Tbe maximum loads on the axles are as follows:

Table 7.9:

Type of axle Number of tires Maximum load on axle/group of axle

Single steering, driver operated 2 7,000 kg. Single steering, drawbar controlled 4 9,000 kg. Single, non steering 2 8,000 kg. Single, non steering 4 10,000 kg.

Tandem, non steering 4 12,000 kg. Tandem, non steering 6 15,000 kg. Tandem, non steering 8 18,000 kg.

Triple, non steering 6 15,000 kg. Triple, non steering 10 21,000 kg. Triple, non steering 12 24,000 kg.

7.3 Problem definition

Since information on the private road haulage sector and especially on international transport in Tanzania is hardly available, fluther research on this sector is needed. Within the private sector I have focused on companies doing international road haulage. However, some companies involved in intra- or inter-regional transport are also included. I decided to concentrate on the international private road haulage sector for practical reasons. The companies in this sector are bigger and better organized than the companies in the intra- and inter-regional road haulage sector. The companies are also easier to locate and approach.

Tbe problem definition is already mentioned in Chapter 2.2 Research questions. For the sake of clarity, the research question with its sub-questions for the international private road haulage sector is presented again.

What are the characteristics of the private road haulage sector and what is the importance of this sector for the economy of Tanzania? a. What characteristics of the private road haulage sector are relevant to obtain ? b. How can the relevant characteristics of the private road haulage sector be obtained and assessed? c. What is the direct economie importance of the private road haulage sector and how can this importance be assessed ? d. What is the indirect economie importance of the private road haulage sector and how can this importance be assessed ? 88 Chapter 7: Private road haulage sector

7.4 Private road banlage information to be obtained

Information bas to be obtained on:

specifications of companies in the private road haulage sector; vehicle fleets of the companies; specifications of transportation of cargo; volume of transportation of cargo; customers of the companies; transport planning and regulations; opinions of the companies w.r.t. main problems and expectations for the future.

This information was obtained by conductinga survey in the private road haulage sector.

7.5 Methodology for survey

The sector study was carried out by means of a survey and bas a descriptive nature. I have chosen for a survey since I wanted to examine a number of characteristics of a large number of research units (companies). The aim was to get an overview of the private road haulage sector. There are no theories or hypotheses in advance, only a research question, wbich means an answer bas to be found to the 'what is going on' questions.

7.5.1 Sample

Not all companies in the specific sector were examined because of time limitations and because not all companies could be traeed and were willing to cooperate.

Since the exact size of the population in this specific sector was unknown, a selection of companies was made. Twenty companies were selected and visited and were interviewed with a questionnaire. I have chosen for the interview because the information to be obtained was about knowledge (data) and opinions. In the interviews, the necessary information bas been obtained by asking structured questions. The structured questions were put in a questionnaire.

Although the twenty selected companies are not a random sample of the national population of private road haulage firms, they represent approximately 70 % of the Tanzanian haulage volume in this sector. In this light, without the proof of statistica! reliability, the outcomes of qualitative analysis are, in my view, at least plausible. Chapter 7: Private road haulage sector 89

7 .5.2 Development of questionnaire

Important aspects are grouped and elaborated into questions to companies. Part of the questions relate to data, part to descriptions and part to opinions. Open and closed questions are used. When it is possible to ask closed questions, for example yes/no questions, this is preferred, since these questions are easier to analyze. Sometimes data, like figures, have to be tilled in and sometimes opinions are asked. Opinions are very hard to analyze, especially when these opinions are asked in open questions. But an open question with free answer possibilities cao provide new information. With closed questions, is it necessary that the answer possibilities are known. The questions in the questionnaire are geared to each other, so that no questions are asked twice and no information is missed. Sometimes a question is oot applicable for a eertaio situation or a eertaio company, but these questions cao be skipped when necessary. The developed questionnaire is added in Appendix E.

Together with the questionnaire, a checklist for the truck fleets of the investigated companies was developed. With this information, a overview of the state of the trucks in the private road haulage sector was be obtained. This checklist is presentedinappendix F.

7.5.3 Data collection

The interviews were conducted in a time span of two month. Not all the visited companies were willing to cooperate in the interviews or were willing to give the necessary information. With a declaration that the obtained information would not be used for governmental purposes but only for personal use, some hesitation could be eliminated. Eventually, twenty companies were willing to cooperate and were giving their information. Two of them were not completely or partially oriented on international transport, but were oriented on local transport in and around Dar es Salaam. It was necessary to visit the companies more than once because the management of these companies was very occupied and some information was oot instantly available. It also proved to be time consuming to find the right persou and to arrange a meeting. Hesitation on sensitive aspects, like turnover and other financial aspects, was noticed at most companies.

Some companies were very difficult to trace. There are eertaio industrial areas in Dar es Salaam, were the private road haulage companies are located. But even on these sites, these companies are oot indicated. Their motto is that real interested customers will find them anyway and other persons are not to be attracted. Tax difficulties probably contribute to this motto. Checking sev­ eral rusted gates was the only solution to contact these road haulage companies. This was the case with the major official transport companies. They could be traeed easily.

I realise that a lot of small transport companies are oot contacted but they are very difficult to trace and they are reluctant to cooperate. The small transport companies also don't keep any records on transport data and rolling stock so information is difficult to obtain. Finally, most of those companies don't have an English speaking director or employee.

Some of the interviews ended in a fruitful discussion on several aspects concerning the road transport sector and this information is also incorporated in the results of the survey. 90 Chapter 7: Private road haulage sector

7.6 Results of survey

Tbe results of the questionnaires are interpreted and analyzed to get an overall picture. Tbe data of the questionnaires consist of quantitative and qualitative data. Tbe quantitative data are processed with a computer. A spreadsheet programme is used to analyze these data and to present them in graphs. A print out of these data can be found in Appendix G. Tbe qualitative data are more difficult to interpret. These data are opinions and descriptive answers. These answers are generalised in order to make some general statements.

Twenty companies were interviewed. Most of these companies are operating on more than one type of traffic movement. Some of the transport companies are doing both international and inter­ regional transport. Others are doing inter-regional and intra-regional transport. Tbe following table shows the number of companies, out of twenty, involved in the different types of traffic movement.

Involved in international transport 17 companies Involved in inter-regional transport 13 companies Involved in intra-regional transport 6 companies

Five companies concentrate on international transport only, one company on inter-regional transport and two companies on intra-regional (local) transport. In the following presentation of the results, all twenty companies are involved.

7.6.1 General specifications of the companies

Figures 7.1 and 7.2 show the distribution of the road haulage companies with respect to the year of establishment. More than half of the companies were established after 1984.

nr. of companies 10

9

8

7

6

5

4

3

2

<1970 1970.1979 1980.1984 1985-1989 1990.1993 year of establishment Fïgure 7.1: Year of establishment

25 % of the companies are foreign owned. 75 % is Tanzanian owned. Chapter 7: Private road haulage sector 91

Figure 7.2 shows the distribution of the road haulage compaoies with respect to the number of total employees. Most compaoies have between 50 and 99 employees. The pie chart in tigure 7.3 shows that 60 % of the compaoies have between 50 and 99 employees. The average number of total personoel is 106 for the investigated compaoies.

nr. ol oomparM.e I. 13 12 11 10 •

•s 2

150->

ldaJnr.of~ Figure 7.2: Total number of employees Figure 7.3: Total number of employees

The pie chart in the following tigure presents percentages of the groups of employees. About a third of the employees are drivers, about one-eight is admioistrative personnel and more than half is other personnel, like security guards, turn boys etc. This number of other personnel is significant, since Iabour is cheap and an extended security force is needed for protection.

average number of other pers. (55 %)

Figure 7.4: Percentages of specific groups of employees

About half of the compaoies have branches or depots up country or abroad. Locations of branches up country frequently mentioned are: , Bukoba, , Mwanza and Arusha. Locations abroad are various. The foreign owoed compaoies normally have their main office in Europe. Those compaoies have branches all over the world. With respect to branches in Africa, these cao normally be found in the countries where most of the transit cargo from Dar es Salaam harbour is transported to.

Half of the interviewed compaoies are doing clearing & forwarding activities. Sub-contracting of cargo to be transported to other (smaller) road haulage compaoies is done by more than half of the compaoies. When a compaoies gains a tender for a eertaio tonnage of cargo to transport, it cao happen that the company is oot able to transport the total amount of cargo. So it has to sub­ contract some of the (less valuable} cargo to others. On average, a fifth of the cargo of the compaoies which are sub-contracting is sub-contracted to others.

Eight compaoies specified their tumover. The average of the specified turnover was 2.4 million US dollar in 1992. 92 Chapter 7: Private road haulage sector

7.6.2 Truck fleet

The information on the truck fleet comes from two sources. The interviews are giving information on the truck fleet. A checklist is used to inspeet the trucks in the yard of the companies for their actual condition (see Appendix F). With this checklist only a part of the trucks are inspected. The assessment of the several aspects of the vehicles is done by practical comparison with other vehicles and with the initial condition, but the classifications on the checklist only give an indication of the condition.

Figure 7.5 and 7.6 show that Mercedes Benz has the largest share in the truck fleet of the 20 road haulage companies. A total of 250 Mercedes vehicles are reported, which is more than one third of the total number of vehicles of the 20 companies. Scania is following far bebind with about a 15 percent share. About 5 percent of the total trucks are DAF and 4 percent are Leyland trucks. All DAF trucks are recent, while the Leyland trucks are much older, often more tban twenty years old.

nr. dln.cklc

M-8(31 ")

Sclnil (15 "l

""'(2 "l 1_,., (12 ") I (4 ") ..__ ··~··'-,..~·· IAyland (4 ") YaM> (7 "b.... (6 ") DAP (5 ")

rnakool !Nek Figure 7.6: Share of truck makes in truck Figure 7.5: Distri bution of truck makes fleet

Seventy percent of all vehicles are trucks (with a fifth wheel) and thirty percent are rigids, withor without a trailer. This is presented in figure 7. 7.

Interlink combination (14 %)

Semi-trailer combination (67 %)

Figure 7.7: Distribution truck and rigid Figure 7.8: Distribution different vehicle combinations

Figure 8, shows that nearly seventy percent of all combinations are truck semi-trailer combination. These combinations are normally used for international container transport. The combination of truck inter-link and semi-trailer is not so common with 14 %. An inter-link is a sort of semi­ trailer attached to a truck. To this inter-link, a normal semi-trailer can be attached. The inter-link normally carries a 20 feet container, while the semi-trailer can carry a 40 foot container or two 20 foot containers. The carrying capacity can be increased with 50 percent with an inter-link and is, therefore, very attractive for transport operators. Chapter 7: Private road haulage sector 93

The distribution of the year of delivery of the vehicles cao be found in tigure 7.9. More than one third of the vehicles is quite new; less than two years old. More than half of the trucks are Iess than 7 years old. This proves that new investments in trucks are still made to renew the truck fleet. The road haulage companies doing international transport have newer trucks than the companies doing inter-regional and intra-regional transport. With intra-regional transport, investment in new trucks is very difficult. These companies normally have very old trucks which are maintained and overhauled.

percentage 45

40

35

30

25

20

15

10

5

< 1970 1971-1975 1976-1980 1981-1985 1986-1990 1991-1993 Year of delivery vehicles Figure 7.9: Year of delivery vehicles

The average driven kilometres per truck in 1992 was 54000 km. per year. The range varled from 11000 km. per year, for a company doing local transport within Dar es Salaam, to 100000 km. per year, fora company doing only international transport with new trucks.

Condition Information on the actual condition of the vehicles was obtained from the inspeetion of some trucks of the interviewed companies with a checklist. Eighty-eight vehicles are inspected. The different combinations inspected are listed in the following table. Most of the combinations are truck + semi-trailers which is corresponding with the information of the interviews.

Table 7.10: Types of vehicles inspected

Truck 3% Truck + semi-trailer 44% Truck + interlink + semi-trailer 8% Truck + semi-trailer + trailer Rigid 17% Rigid + trailer 13% Tanker (rigid) 3% Tanker (rigid) + trailer 5% Truck + tanker (semi-trailer) 7%

TOT AL 100%

The condition of tires of the inspected trucks is presented in tigure 7.10. It shows that more than half of the inspected tires were it a good state. For long-distance transport, a good condition of tires is very important. Tyre burst cao cause significant delays when the trucks are on the road. The tyre wear on these trips is also immense. After four trips of 4000 to 5000 kilometres, the tires are wom out, when they are oot punctured or damaged before that time. The costs of tyre purchase, however, are very high. Tires, therefore, contribute heavily to the total costs of transport operators. 94 Chapter 7: Private road haulage sector

percentage 70 65 60 55 50 45 40 35 30 25 20 15 10 5 o~L+~~~~~~~~~L--A~L--U~L- goed average wom out damaged flat missing condilion of tyres Figure 7.10: Condition of tires

The condition of the chassis and the cabin body of the inspected vehicles are presented in tigure 7.11 and 7 .12. More than half of the chassis are good or very good and also more than half of the cabin bodies are good to very good. The trucks used in international road transport are relatively new and, therefore, most of these trucks are still in a proper condition. The companies oriented on local transport have older trucks and, therefore, the condition of these trucks is usually worse. Some of these trucks, bowever, are well maintained. Tbis depends on the policy of the transport company. Forty percent on the inspected vehicles were sbowing improvised repairs of their chassis, while 20 percent were showing improvised repairs of their cabin bodies.

-­.. --·35

-dcollbody-- - - Figure 7.11: Condition of chassis of Figure 7.12: Condition of cabin body of inspected vehicles inspected vehicles

W.r.t. ligbts, sereens and mirrors it can be stated that 80 percent of the vehicles were having complete lights, but the functioning was not cbecked. One third of the windsereens were cracked and one out of every six mirrors were cracked or missing. Chapter 7: Private road haulage sector 95

7.6.3 Cargo

When calculating the total tonnage of the 20 companies, the following was found: total transported tonnage in 1992 445,100 tonnes total transit tonnage in 1992 205,800 tonnes total tonnage national cargo in 1992 239,300 tonnes

In cbapter 7.2.2.3, it is calculated tbat a total of approximately 293,000 tonnes of international cargo is transported to neighbouring countries from June 1991 to June 1992. With a transit tonnage of 205,800 in the survey, 70 % of the capacity of the total international transport market in Tanzania is covered by my survey. Since most of the big international transport companies are involved in the survey, a number of smaller ones are not included.

For comparison of the transport performance of international and national or local transport, the ton x km. is a better indicator than the capacity. A transport company in Dar es Salaam transporting only within the city, can transport a lot of cargo because it can make several trips a day while international transport can take more than two weeks for one trip. One of the companies operating in local transport transports about 200,000 tonnes a year, but on a distance of only 15 kilometres.

With transit transport to neighbouring countries, the average distance is about 1900 kilometres. The ton x km. performance, therefore, is 370 million ton x km. When ton x km. performance of transit and national cargo are compared, more can be said about the size of these two groups. Of the 239,300 tonnes of national cargo in the survey, at least 200,000 tonnes were local. When the distance for transportation of local cargo is estimated on 15 km. and other national cargo (39,300 tonnes) on 800 km., the ton x km. performance of national transported cargo in the survey is about 35 million ton x km. The transit sector with 370 million ton x km. in the survey, is more then ten times higher. So although their were more national than international cargo transported tonnes in the survey, the share of the transport performance of the international road baulage sector is ten times the share of national transport in the survey.

Nearly 90 percent of the road haulage vehicles were transporting containers and loose cargo, while only 10 percent was fuel cargo. The transport of fuel is only minor. When the 200,000 tonnes of local transport are not taken into account, which is all loose cargo, the share of fuel transport in the total transport is 17 %.

Six transport companies were combining their road transport with other means of transport (railway or marine) and fourteen of the twenty companies were monitoring their trucks on the road. This is very important to avoid theft of cargo, items of the truck or fuel. Problems on the road can also be solved faster. This is to secure proper delivery of the cargo in time to the customer. 96 Chapter 7: Private road haulage sector

7.6.4 <:~o~ers

The average customer price for transport of cargo from Dar es Salaam to neighbouring countries like Rwanda and Burundi is 131 US dollar per ton. The range varled between 65 USD per ton and 187 USD per ton. The one with the highest price is a well known international company. They cao offer an overall service and responsibility which bas to be paid. The company with the lowest price is a big local company, doing international transport with aged trucks.

When a truck semi-trailer combination is transporring about 30 tonnes of cargo on a international trip, the total price will be about 4000 USD. When the fuel consumption of the truck is about 0.8 litre a kilometre, it will consume 0.8 x 1900 x 2 = 3040 I. diesel. The price is 3040 x 0.42 = 1277 USD. Road toll bas to be paid; about 300 USD. So about 2400 USD remains. All other costs have to be paid from this money. Major costs are new tires, repair & maintenance, investments in new trucks, overhead, etc.

Some other statistics of the 20 investigated companies are:

Negotiable transport prices 9 companies More regular customers than incidental customers 16 companies Direct competition with other road haulage companies 16 companies

A planning system to plan transport demand and truck supply 13 companies Different cargo with the same direction on one truck 12 companies

The number of customers the transport companies are dealing with vary from one single customer to 27 customers. It is very difficult to say anything about the origin of the customers. A lot of customers have branches all over the world. Normally the transport company is only dealing with the local branch and will categorize it as located in Tanzania, while in fact it is a multi-national company. For data on the origin of the customers see Appendix G, question 6.6.

7 .6.5 Opinio os

In this chapter, opinions of the transport companies in the survey are reviewed. Some bottle-necks in this sector will be mentioned, but these bottlenecks will be discussed full in the following chapter. First, the expectation for the future is presented in figure 7.13.

N'.cfcompanl•

Figure- 7.13: Opinion companies on expectation for the future Chapter 7: Private road haulage sector 97

Figure 7.13 shows that there is no optimistic or pessimistic view of the private road haulage companies w.r.t. the future of the road haulage sector. Seven companies are pessimistic, which is the highest percentage (about one third), but six companies are optimistic. The reasoos for the optimistic views are: improverneut of the road haulage sector by heavier competitioo, Dar es Salaam port will remaio competitive in relation to other pons and the roads have improved. The reasoos for the pessimistic views are: Dar es Salaam will loose the competition with Mombassa and Nacala and Beira in Mozambique because of poor and slow service, the competition is too stiff, the cargo to be transported decreases, the operation costs increase without an iocrease of transport rates.

The problems affecting the road haulage companies, mentiooed by the transport operators themselves, cao be divided into several groups.

1. lnfrastructural problems:

Quality of the roads, especially in the Rwanda Burundi route, is poor. Some of the roads are only season roads. There are also a lot of tyre punctures and damages because of the poor roads. The bridges are too narrow to pass. Telephooe is oot woricing properly.

2. Carrying capacity:

Most of the transport operators want to carry more load on one vehicle. They prefer toading according to the carryiog capacity of the truck and not according to the govern­ ment regulations. Some of them, however, realize that dangerous situations can occur because of overloading. The weighbridges are giving problems. The employees of the weighbridges want bribe money and they oot always measure correctly.

3. Financing problems:

The banks are reluctant to provide loans for purebase of new trucks. Bankers are also oot allowing credit. Besides, there are not so many banks in Tanzania. Another problem is that the customers are paying very late, especially local customers.

4. Competition problems:

The competition bas become too stiff. Since 1990, the competition bas only increased, while the transported cargo bas not increased. In fact, it is becoming less every year. Local, and especially regional cargo, bas decreased so a lot of transporters have shifted to and concentrated on international cargo.

5. Govemment regulations problems:

A frequently mentioned problem is the interpretation of the regulations by governmeot officials. The regulations are not clear and not strictly implemeoted. Bureaucracy was meotioned as ooe of the problems. Still, half of the investigated companies did not have problems with respect to government regulations.

6. Other problems:

The drivers of the trucks can oot be trusted. They will steal if they can and do their own business transportiog some cargo on the companies truck. 98 Chapter 7: Private road haulage sector

The investigated companies were asked to give their suggestions for improverneut of the road haulage sector and their company. Frequently mentioned topics were: a. Improve services and handling at Dar es Salaam port because the loading of trucks takes too long compared to other ports and the bribe system is enormous to get the process started. b. Improve roads, especially in the northern regions. c. The transport regulations should be made more clear, especially the maximum weight problem and the interlink problem. The law should also be imposed for everybody and be implemented correctl y. d. Increase the transport rates since the operation expenses have increased significantly and the operating expenses havenotbeen adjusted. They are the same since 1991.

There were also suggestions from companies for improverneut of their own company, but these are too specific to mention in a general way. Chapter 7: Private road haulage sector 99

7. 7 Current bottle-necks in private road banlage

The current bottle-necks in the private road haulage sector are partly similar to the probierus mentioned by the interviewed transport companies. However, information from interviews, conversations and the ruinistry of Transport and Communications are added. Six main bottle-necks are identified and will be discussed.

1. Too much competition within the private road haulage sector.

2. Operational costs are too high.

3. Trucks are overloaded and obscure governmental Iimits are exceeded.

4. Difficult to obtain (investment) credits.

5. Infrastructure is inadequate.

6. Collapse of official inter-regional road haulage of crops.

ad.l A lot of transport companies have been established recently. Economie liberalization made it possible for potential entrepreneurs to establish road haulage companies. 6 The profits to be made on (international) road haulage were very attractive and attracted new entrepreneurs. Since the competition bas increased without an increase of transport demand, the profits have collapsed and a lot of transport companies have to struggle to survive. Price policy by transporting more cargo at an interesting, low, rate is executed frequently to get a reasonable tumover. Savings for new investments are hard to make. A lot of trucks are bought on credit the last five years. Transport operators have to made a high turnover and profit to pay off their credits. A price policy is the only option to pay off credits in the short term. ad.2 Operational costs have increased significantly. Fuel prices have risen and the prices for imported parts for trucks, like spare parts and tires, have increased tremendously. These prices have to be calculated in the transport tariffs to keep on operating with some profit. Because of the heavy competition, upgrading the tariffs is not possible; competing on transport tariffs is more common now. This results in cutting down the operational costs. Reductions on repair & maintenance and reductions on purebase of spare parts and tires which are necessary are carried out. ad.3 For transport operators, it is most economical to load as much cargo on one truck as possible. With the stiff competition and high operational costs, overloading is a way of making some profit. Old trucks with little power and little carrying capacity are frequently overloaded to get more revenue. Axle overloading is occurring frequently. Recent trucks are much more powerful and can carry more weight than the elder ones. According to their specifications, these trucks are even allowed to carry more weight than the govemment allows. A lot of transport operators are using these trucks according their vehicle specificadons or are even exceeding these specifications and are not keeping to the govemmental Iimits.

' The increase of competition after liberalization has also been discussed in chapter 5.5: Leyland DAF Tanzania Ltd. and economie liberalization. 100 Chapter 7: Private road haulage sector

These recent trucks, therefore, are sometimes exceeding the total weight of 52 tonnes and are also exceeding the total axle weights. Inter-link combinations are often used. These combination can carry three 20 foot containers. Since this cargo is sealed, the total weight depends on the weight of the containers. It is also unclear whether inter-links are authorized by the government. Officially, they are exceeding the overall length and are not described in the government regulations. At the Ministry of transport and communications, it was unclear whether these combinations were officially allowed or not. It was unclear to most transport operators as well. To operate under the current circumstances, weighbridge employees are bribed to avoid a fine and to continue the trip. All trucks which start their trip are weighed at weigh bridges on the outside of Dar es Salaam. Weighing is not always been done correctly. Because of these frictions the relation between transport operators and weighbridges are tense. ad.4 Credits for investments in new trucks and materials are very hard to get nowadays. The government is tightening the money growth and credits at banks will, therefore, be more difficult to acquire. 7 Purebase of new trucks is even more difficult than is was several years ago. Truck importers are giving their own credits to attract transport operators but this is not sufficient. Without credits, an expansion of road haulage companies is unlikely. For some road haulage companies credits are necessary to survive. It can be assumed that some road haulage companies will oot survive the competition. ad.5 Tanzania's infrastructure is affecting the private road haulage sector in several ways. The roads, especially in northem regions, are frequently insufficient. Some bridges are also too narrow to pass. Another bottle-neck is the infrastructure of Dar es Salaam port. Most transported cargo is collected or delivered at Dar es Salaam port. The service at the port is poor compared to other harbours which affects the road haulage sector. On- and off­ loading ships and trucks takes too long to be competitive. Frequently bribe money bas to be paid to start or speed up the process. The road haulage sector is loosing transport demand because customers are shifting to the more competitive harbours with better and faster service in Mozambique and Kenya. A third bottle-neck in the infrastructure, is the lack of communication. Telephone and fax operations are unreliable; frequently connections can not be made. This harms efficient and fast transport operations. ad.6 The inter-regionat transport of crops bas dropped to a nummum. Cooperative Unions used to buy crops from farmers. They transport the crops themselves and contracted it partly to private transporters. Most Cooperative Unions feil apart and buyers for large amounts of crops ceased to exist. Farmers are getting into problems because they can oot sell all their harvest. Only petty business is done. People are driving with piek-ups and small trucks to transport part of the harvest Truck drivers transport illegally some crops on their return from Malawi, Zambia and bus drivers are puttingsome bags with crops in their bus. In this way they get some extra profit. Every year, farmers are producing less erop because they can't sell it. The consequence is that agricultural produce bas to be imported. The official transport for inter-regional erop haulage hardly exists any more. So transport demand bas diminished and transporters have shifted their activities to international road haulage which increases the competition.

7 See also chapter 5.5: I...eyland DAF Tanzania Ltd. and economie liberalization. Chapter 7: Private road haulage sector 101

7.8 Effects on the economy

The economie importance of tbe private road haulage sector is reflected in its rale as:

1. forex earner 2. tax contributor 3. employment creator 4. foreign investment attractor

The sector also:

5. impraves tbe internal flow of goods and produce 6. enbances competition in imported goods 7. guarantees part of tbe nation wide energy (fuel) distri bution 8. enbances diversification of economie activities 9. incorporates Tanzania in international networles 10. stimulates high quality teehoical services 11. impraves efficient use of port and air facilities 12. stimulates otber suppliers to manufacture quality goods

ad.1 Foreign exchange is eamed by tbe transportation of (international) cargo. Part of tbe total earnings are in foreign and part in local currency. (International) road haulage companies under Tanzanian ownership get revenues from tbeir customers in Tanzanian or foreign currency. International road haulage companies under foreign ownership, witb tbeir head offices abraad, get revenues directly from tbe customers or from tbe head office. In tbe second situation, tbe revenues usually only cover tbe operational costs. The profits remaio outside Tanzania and are in fact cbannelled abroad. The amount of forex earned in this sector and tbe profits cbannelled abroad are tberefore unknown. ad.2 The companies in tbe private road haulage sector have to pay taxes on tbeir turnover and on tbeir profits. Furthermore, taxes on import of inputs have to be payed too. ad.3 Durlog 1990/91 about 90,000 people were employed in tbe transportand communications sector. Most employment in tbe private road haulage sector is created for mechanics and security personnet Since Iabour is cheap, nearly all haulage operators have tbeir own workshop witb mechanics and tbeir own security force. Truck drivers and administrative personnet are of course also working in this sector. ad.4 Foreign investors caooot invest successfully in industry when there is no infrastructure to transport tbe necessary inputs and tbe produced outputs. A well organized road haulage sector increases tbe feasibility of investment projects and therefore stimulates foreign investment. ad.5 The private road haulage sector transports, e.g. agricultural produce, cement and fertilizers. Witb a well operating raad haulage sector, shortages and surpluses in specific areas cao be linked and balanced better. As a side effect, competition w.r.t. local goods will also increase. 102 Chapter 7: Private road haulage sector

ad.6 Reliable distribution of imported goods over the country will attract importers and stimulate the competition in imported goods. The imported goods can compete with other imported goods and with local goods. ad. 7 The private road haulage sector is responsible for the transportation of most fuel and oil in the country. It supplies fuel stations in rural and urban areas and supplies industries with fuel and oil. The availability of fuel is very important for the proper functioning of a lot of (economie) activities. ad. 8 If the road haulage sector is able to transport inputs for economie activities all over the country and is able to transport outputs to the customers, the economie activities can take place in places. The economie activities, especially in rural areas, are heavily relying on transport services. A policy to stimulate economie activities in rural areas should, therefore, be supported by good transport facilities. ad. 9 Companies in the international road haulage sector have well established networles in international trade, finance and telecommunication. In general then international networles are poorly developed in Tanzania and the economy at large can profit from the situation in the sector. ad.lO The organization and operation of services of the (international) road haulage sector are complex. They require highly skilied persoonel. The relatively high number of expatriates employed is proof of this situation and will undoubtedly have significant spin off effects. ad.ll The road haulage sector is the link between harbours and airports and the final destination of the transported goods. Without road haulage, the harbours and airports would be stuck with the goods. Harbours and ports can only be used optimally when a well functioning road haulage sector is able to transport the throughput in time. The current situation in Tanzania, however, is different. The bottie neck for fast handling and good service is at Dar es Salaam port, which negatively affects the efficient use of the road haulage capacity. ad.12 The spare parts the road haulage sector is using for their trucks, can either be imported or manufactured locally. Specific spares will have to imported from the manufacturer of the truck, but general spares like tires, batteries, etc., can also be purchased locally. Tire factorles (General Tyre) and battery producers (National) in Tanzania supply the road haulage sector with local products. A high quality of these products in necessary to make the products competitive with imports and to fulfil the need of the road haulage operators. Chapter 7: Private road haulage sector 103

7.9 Conclusions and recommendations

The private road haulage sector, as part of the transport sector, plays an important role in the Tanzanian economy. The sector, however, is facing problems. Six main bottle-necks were mentioned in this chapter and are reviewed:

Too much competition within the private road haulage sector. Operational costs are too high. Trucks are overloaded and obscure governmental limits are exceeded. Difficult to obtain (investment) credits. Infrastructure is inadequate. Collapse of official inter-regional road haulage of crops.

The sector is facing over competition and a serious increase of operational costs. Overloading of trucks was done to increase tumover, and among others to compensate threatening losses. This overloading is an area of tension between the government and the road haulage operators. Still, this sector bas to be stimulated to tackle the bottle-necks and improve the contribution to the Tanzanian economy. Suggestions for improverneut of the bottie necks are, among others:

improve service and handling at Dar es Salaam port; improve road infrastructure and communications infrastructure; decrease taxes on imported spares for the road transport sector; make transport regulations more clear and implement the regulations strictly and consequently; ease the purebase of investments credits. Chapter 8: Literature 105

8. Literature

Books

1. Tanzania Landenreeks, Nico Kussendrager, 1991, Koninklijk Instituut voor de Tropen

2. Tanzania, Colin Darch, Clio press, World Bilbiographical series volume 54

3. International Ristorical Statistics, Africa and Asia, by B.R. Mitchell

4. Africa South of the Sahara 1991, 20th edition, Europa publications Limited

5. Economie Shocks and National Policy Making: Tanzania in the 1970s, R.H. Green, O.G. Rwegasira, B. van Arkadie, Institute of Social Studies 1980

6. Basic needs in danger, International Labour Office, 1982

7. The Second Economy in Tanzania, T.L. Maliyamkono, M.S.D. Bagachwa, Eastem African Studies 1990

8. Rebalancing the public and private sectors: Developing country experience, 0. Bouin and Ch.-A. Michalet, Development Centre Studies, Paris 1991

9. Beonornies fora developing world, Michael P. Todaro, Longman 1977

10. Tanzania Planners Handbook, a guide for regional and rura1 development planning, H.G.T. van Raay, A.J.Dolman, C.M.Kazi.

11. The Economie Survey 1991, The planning Commision Dar es Salaam, Tanzania 1992, adult Education Press Dar es Salaam-Tanzania

12. Basisboek Methoden en Technieken, Dr. O.B. Baarda & Dr. M.P.M. de Goede Stenfert Kroese 1990

13. Manual for the Preparation of Industrial Feasibility Studies, UNIDO, Vienna 1991

14. Manual for the Evaluation of Industrial Projects, UNIDO, Vienna 1986

15. Inleiding Onderhoudsbeheersing, Dr.ir. C. W. Gits, TUE, Faculteit Bedrijfskunde, 1992

16. Onderhoud en logistiek, Prof.dr.ir J.W.M. Bertrand, Dr.ir J.H.J. Geurts, Prof.ir. W. Monhemius, 1991, TUE Samsom/Nive

17. Fysieke distributie: denken in toegevoegde waarde, A.R. van Goor, M.J. Ploos van Amstel, W. Ploos van Amstel, Stenfert Kroese, Leiden I Antwerpen, 1989

18. Maintenance and its management, Anthony Kelly 1989

19. Maintenance Planning and Control, James H. Bullock, 1979, National Association of Accoun­ tants

20. The transport sector in Tanzania, a guide for bistorical and contemporary research, Bureau of resource assessment and land use planning, M.K. Me Call, Department of Geography, University of Dar es Salaam, 1979 106 Chapter 8: Literature

Documents

1. Bank of Tanzania: Economie and operations report for tbe year ended 30 tb June 1991 ISSN 0067-3757

2. Bank of Tanzania: Economie Bulletins 1991

3. National Accounts of Tanzania 1976-1991, Bureau of Statistics, National Accounts Section, President's Office, Planning Commision Dar-es-Salaam, Eight edition in the revised series of GDP, August 1992

4. Papers on tbe political Economy of Tanzania, Kwan S. Kim, Robert B. Mabele, Michael J. Schuitbeis Economie Research Bureay, University of Dar es Salaam 1979

5. The United Republic of Tanzania, Second Five Year Plan for Economie and Social Develop­ ment 1969-1974, tbe Government printer, Dar es Salaam, 1969

6. The United Republic of Tanzania, Tbird Five Year Plan for Economie and Social Develop­ ment 1976-181, tbe Government printer, Dar es Salaam

7. The United Republic of Tanzania, Rolling Plan and Forward Budget for Tanzania 1993/94 - 1995/96, The President's Office Planning Commision and Ministry of Finance Dar es Salaam

8. Directory of industries, Industrial census (1989) volume I, (50+) industrial establishments, Bureau of Statistics, President's Office, Planning Commision Dar-es-Salaam, September 1992

9. Directory of industries, Industrial census (1989) volume 11, (10-49) industrial establishments, Bureau of Statistics, President's Office, Planning Commision Dar-es-Salaam, September 1992

10. Foreign Trade Staristics 1989, Bureau of Statistics, President's Office, Planning Commision Dar-es-Salaam, October 1991

11. lndustrial Commodities, Quarterly report 1992:2, Bureau of Statistics, President's Office, Planning Commision Dar-es-Salaam, December 1992

12. Selected StatistkalSeries 1951-1988, Bureau of Statistics, President's Office, Planning Commision Dar-es-Salaam, January 1991

13. Statistical abstract 1991, Bureau of Statistics, President's office, Planning Commision Dar es Salaam

14. Survey of industrial Production 1988,Bureau of Statistics, Industrial stadstics section, Presi­ dent's Office, Planning Commision Dar-es-Salaam, October 1991

15. Tanzanian Economie Trends, a quarterly Review of tbe Economy, Vol. 4 No. 2, July 1991, Publisbed by tbe Economie Research Bureau of tbe University of Dar-es-Salaam in collaboration with tbe Planning Commission

16. Transport Statistics 1991, Bureau of Statistics, President's Office, Planning Commision Dar­ es-Salaam, December 1992

17. Netherlands import support to the Tanzanian transport sector 1988 and 1989, March 1988, Peter Dreyer, Delta Dar es Salaam

18. Proposed vehicle dimensionallimits and Schedule for overtoading fees, 1993, Road Safety Department, Ministry of Works Chapter 8: Literature 107

19. Proposed National Transport Policy, Ministry of Communicatioo aod works, Dar es Salaam, 1987

20. Programme for Transport Sector Recovery, the Goveroment of Tanzania for the Transport Sector Donors' conference, Arusba, 1987

21. Road traffic regulatioos 1975, amaodemeot 1987 Road Safety Departmeot, Ministry of Works

22. Road transport study for the National Transport Corporatioo (NTC), Economie Research Bureau, University of Dar es Salaam, Juoe 1993

23. Road Motor Transport in Tanzania: The case of Public versus Private Transport, Tadei M.K. Mrema, University of Dar es Salaam 1979

24. The performance of Public Troeldog Industry in Tanzania: A case study of Regional Transport COmpanies, University of Dar es Salaam 1987

25. M.Sc thesis "ITOK" MFDC Boat Yard, Recommendatioos for the impravement of the con­ struction of fishing vessels at the MFDC boat yard, A.J.Th Bot, 1993, TUE Road Transport in Tanzania

Appendices

Written by: M.J. Gnoth

Supervision: Dr. P.E.Lapperre Ir. H. Toersen Dr. Ir. A.M.C. Lemmens

M. Sc. thesis "International Technological Development Science" Eindhoven University of Technology, May 1994 Contents

Page

Appendix A: Job descriptions 1

Appendix B: Internal forms ...... 11

Appendix C: Checklist condition of vehicles ...... 17

Appendix D: Checklist condition of vehicles adjusted for UDA ...... 23

Appendix E: Questionnaire private road haulage sector ...... • ...... 29

Appendix F: Checklist truck fleet ...... 37

Appendix G: Print out survey private road haulage sector ...... 39 Appendix 1

Appendix A: Job descriptions

1. Managing director's office

Managing director:

For the Managing Director it will be a condensed list of responsibilities. A complete and extensive list is added in the appendix.

overall responsibility for the company; develop and imptement short term and long term plans and budgets for marketing, sales, turnover, results and operaring expenses; maintain and improve the image of the company and represent the company towards the different contacts.

Secretary of M.D.:

handling incoming and outgoing company mail; translation of correspondence in Kiswahili; taking care of filling system in M.D. 's office which comprises of: customers sales files; contidenrial files; management personnel files. keeping diary for M.D., making appointments and handling telephone calls; sending fax messages and telexes and keeping record of incoming and outgoing telexes; making travel arrangements and hotel bookings; sending DHL packages; typing correspondence etc.; receive visitors to the M.D. 's office; keeping record of all incoming cheques and collecting every week flimsies from all departments for the M.D ..

2. Administration department

Company secretary:

Areas of responsibility:

in charge of administration, personnel and security of the company: administration matters: liaison with government departments, trade union, ruling party; employee welfare, company welfare, office administration personnet matters: recruitment, placement, discipline, industrial relations, training etc; security matters: ensuring that the security of the company and it's property is in order. company secretarial work: all matters relating to company formation and existence, board of directors matters, liaisón with the register of companies, all legal affairs of the company, company meetings etc; looks after company memhership in relevant associations e.g. employer association, motor trade association, ebarobers of commerce etc.; 2 Appendix

Secretary of adm. dep.:

typing work for administration department and for service director, technical manager and sametimes assembly manager; handling secretarial work; keeping the file records and dealing with leave application forms for the staff; receiving incoming and outgoing mails, filing the correspondence and sending telexes; receiving telephone calls and visitors; taking over telephone operator's work when necessary and taking over typing work of secretary of M.D. when necessary; Handling all persounel matters in persounel officer's absence.

Security officer:

Areasof responsibility:

in charge of security department; monitoring the performance of a security force of about 40 men; lookingafter methods of prevention of security risks to the company; liaison with the police force; liaison with the office of the public prosecutor; investigation of crime against the company; liaison with the campany's security consultant; generally lookingafter the security of the company and it's property.

Personnel officer:

in charge of persounel department and as such handles all routine matters relating to staff; processing of office documentation; processing of administrative matters generally; acting as a assistant to the company secretary in the discharge of functions other than company secretarial work.

3. Sales department

Sales director:

Activities tagether with rnanaging director:

visiting customers, receiving customers in order to sell vehicles; obtaining tenders; advertisement; selling vehicles.

Other activities:

informal cantacts with customs, bodybuilders and customers; building up a long lasting relationship with customers e.g. informal contacts; contact with bodybuilders and checking them for progress; draft invoices; overall in charge at sales department and coordinating that department. Appendix 3

Sales clerk registration:

responsible for section from completed vehicle until delivery to customer. Starting when customer bas paid the whole amount of money to tbe sales director; registration and formalities new vehicle: * registration form; * traftic inspection; * weigbt inspection; * clearance certificate customs; * insurance. renewing general certificate of registration every year for the company cars; payment of car benefit tax fee for Land Rover and Range Rover;

Sales clerk chassis:

responsible for correct truck and bus chassis build up and body build up. major part:

cbecking vehicles to be build up in Mbagala; checking vehicles in progress at bodybuilders; check quality and check time schedule; keep customers informed about progress and informthem about delay if necessary. minor part:

check if customer bas paid eertaio amount of money before chassis is send to body buil der; negotiate with customer which body builder of tbe by Leyland DAF approved body builders they want to choose; create L.P.O. (Local Purebase Order); when bodybuilding is done: arrange mechanics and electricians from Mbagala to check bus if nothing bas been changed unnoticed and nothing is missing; check payment of customer before the procedure of obtaining road license and insurance will be started by the other sales clerk; inform sales director about progressof vehicle build.

Sales officer:

The sales officer is not present any more and bis activities will be taken over by the two sales clerks.

in charge of general sales; pro forma invoices; preparation of delivery certificates; final deliveries to customers; physical checking new vehicles.

Secretary of sales department:

typing; correspondence; assisting sales clerks; updating delivery book. 4 Appendix

4. Finance department

Fmance Director:

All the fioancial aspects for Leyland DAF:

fioancial reporting: legal requirements; management accounting: Headquarters- International; budgets; forecasts; various analysis; computer: overall responsibility: development and running; cash I Bank: cash running; LIC's raising; procurement; over

Secretary of fmance department:

files overview; creating database files for Fioance Director; typing letters; correspondence; (management accountant activities:) making * balance sheet; *profitlloss; * forms used in fioancial department; *overview petty cash voucher; all in LOTUS.

Financial accountant:

Financlal part: - authorize payments; * checking all receipts; * coordinating financial subsections.

Management accounting part: prepare monthly fioancial reports of: * balance sheet; * statement of souree and application funds; * profitlloss account. Appendix 5

Supplies officer (and bank liaison):

Major part:

daily banking; progresses LIC's (Letter of Credit); bank contact person.

Minor part:

procure indirect materials.

Costing supervisor:

calculating bill for customer from: * job cbart; * repair job cost sheet; * job time cbart; * workshop parts requisition. invoicing job file after check senior workshop foremen and parts & service director;

Payroll clerk:

preparation junior salaries: calculation of the salaries to be paid overtime, absolute time or lost time.

Cashier:

paying salaries two times a month: the lOthand the 25th; going tothebank for depositing cash money; receiving cash money and cheques from customers with invoice, gtvmg receipts to customers with they should take to reception for collecting their vehicles; writing voucher for posting; giving money for external service and external parts.

Computer operator:

accounting data from financial department; posting: SIC (Source/Credit) and PIL (Profit!Loss) balances; customers statements; raising credit notes; back-up computer; inputs into DBASE: products sacks; workshop sacks/ W.I.P. (work in progress).

Costing clerk:

assist cosring supervisor with administration and calculation. 6 Appendix

5. Service department

Service director:

maintaining contact with costomers about after-sales problems; coordinating and delegating the different departments ; authorizing forms and procedures; trouble shooting; long term planning for workshop, parts and assembly; trouble shooting.

Parts manager

in charge of parts store; prepare list of orders of spare parts; check arrived parts if they are in good order and correct quantity. Then divide parts in parts for customers, parts .for depots up country and parts for parts store. Then send them; delegate activities within parts department; contact costomers about spare parts.

Purchasing manager:

responsible for purchasing local spare parts for vehicles in workshop if parts are not available in stores: * stores gives normally once a day a list of spare parts to be obtained outside the company. In urgent situations they inform immediately; * for regular suppliers mostly a L.P.O. and/or a cheque is suftkient for payment. In other situations a petty cash voucher is necessary from the service director to get the cash money at the cashier; * for parts above 100.000 Tsh, a pro forma invoice is made by the supplier; * for transport into town to obtain the parts, the stores Land Rover is used; * when the parts are obtained the invoices are send to stores together with the parts where the invoices will be put into the computer. The purchasing manager gets the invoices back together with a computer print and send it to finance.

Import manager I Assistant import manager:

The import manager and the assistant import manager have the same job activities and are working both on the activities written below. When one of the two is not in the company, the other takes over. The import manager is responsible for the import section and because of that responsibility he is more inside the company than the assistant. That means that he is concentrating on the administrative part and the assistant is concentrating on the activities outside the company. Appendix 7

Tbe procedures for import of parts and goods (also vehicles) can be divided in several steps. A brief overview is as follows: Prepararlon of an import licence application and lodge that to the Bank of Tanzania for approval after receipt of a proforma invoice from suppliers abroad. Prepararlon of some other documents to establish a letter of credit through the National Bank of Commerce when a import licence is granted. Those documents for letter of credit establishment consist of: * Covering letter to establish letter of credit; * Form OU-1 (declaration of foreign currency remittance); * Letter of credit application forms; * Tbree copies of Proforma invoice; * Copy of import licence approved. The preparation of a form called EXCI after the letter of credit is established by bank Handing over the EXCI forms and three sets of Pro forma invoices and copy of Letter of Credit to the Bank of Tanzania for inspeetion of parts I goods at the other end Preparation of Entries and presenting them to Customs Authority for processing after receipt of invoice from airway company, or Bill of Lading from shipping company and Clean Report of Finding from SSI (Specialist Services International Ltd.)

The rest of the formalities to obtain the parts or goods at the airport or harbour is normally done by the two import clerks.

Two import clerks:

clearance of necessary formalities like payment of duty; todging the documents with Tanzania Harbours Authority for assessment of port charges; paying the port charges and presenting the goods for customs verification and release; taking delivery of parts or goods to Pugu road/Kilwa road after the released document is returned to Tanzania Harbours Authority.

Technical manager: maintenance aspect

responsible for general maintenance of buildings, drainage, inventory and workshop equipment; prepare preventative maintenance schedule; coordinating and delegaring electricians, painters and plumbers for maintenance; intproving equipment and making drawings for new equipment. unit shop aspect

in charge of unit shop; solve problems, technical advise; order parts for reconditioning of: engines, gearboxes, axles, waterpumps, turbo chargers. 8 Appendix

Maintenance foreman:

preparing daily workactivities for workers at maintenance department and filling in maintenance work order; teehoical assistant to the workers when probieros occur; coordinating activities done by maintenaoce department like: * cleaning workshop; * paintiog; * plumbing; * electrical activities; * carpenting; * constructing maisons.

Senior meehaDie engineroom:

ordering spares at stores; keeping special tools; keeping register of work in progress; overhauling engines etc. with the other mechanic aod helpers.

Senior workshop foreman company cars:

responsible for maintenaoce aod repair of the 21 compaoy vehicles including a forklift. Maintenaoce is executed according a service schedule. Everyone who possesses a compaoy car should have such a schedule aod should bring bis car for maintenaoce according that schedule. Otherwise, the workshop foreman for compaoy cars informs the possessor of that compaoy car; checking vehicle when it is opened aod cleaoed for repair; check broken parts; normally spare parts for Land Rover are taken from stores at Mbagala or at special stores for Land Rover parts at Pugu road. Otherwise authorizing L.P.O. for service or spare parts outside the compaoy; solving teehoical probieros from mechaoics, helping them; supervising two mechaoics and one helper; road-testing vehicles if necessary.

Senior workshop foreman:

checking every morning the amouot of mechaoics aod the amount of jobs to be dooe, then assign the mechaoics to the jobs; checking every morning how many vehicles cao be repaired in that same day so how many vehicles cao be brought inside the workshop for repair; close job chart when job is finished aod send it to costing supervisor. Check again after sending back aod send then to service director; report to financial accountant vehicles that are parked longer thao three weeks; check vehicle in workshop when it is opened and cleaoed for repair; check broken parts; authorize requisition from time clerk for spare parts; make requisition for oils etc. for stores office to add new with authorization of service di rector; solve teehoical problems from mechaoics, help them and if necessary contact service director; supervise 2 charge hands, 9 mechaoics, 3 electricians and 2 mechaoics in pump room; authorize L.P.O. invoice forservice or spareparts outside the compaoy; road-test vehicles if necessary. Appendix 9

Reception engineer:

check:ing vehicle of customer for repair or maintenance; identify the problem and confer with driver or owner; checking incoming vehicle on details like accessories and litde damages. This bas to be noted on the job chart to avoid problems when the owner collects his vehicle; road testing of incoming and outgoing vehicles if necessary. Normally there is one tester for incoming and one tester for outgoing trucks; maldog appointment with customer about date when vehicle cao be collected; informing senior workshop foreman about incoming vehicles and assign responsibility to him for repair and maintenance; asking every morning which vehicles are ready to senior workshop foreman; signing job chart for authorization; giving information about spare parts; dealing with problems of customers and passing the problem on to the responsible person.

Reception clerk:

open job charts for repair; open new job files; enter all job charts in register book; fill repaired vehicles in register book; issue gate pass for finished jobs (vehicles); rnaintaio service record chart.

Reception clerk:

assist at reception.

Assembly manager:

overall responsibility for assembly; preparing division of work to the mechanics executed by the assembly foreman; checking C.K.D. boxes. After the storesman bas made a list of shortages and bas reported it, preparing a report of shortages for missing items; contacting the C.K.D. department in Holland or UK when necessary; estimating the prices for paintwork and accident repair; makinga L.P.O. for obtaining the necessary materials; helping mechanics with teehoical problems; helping assembling the DAF TB 2105 bus and explaining the building sheets; authorizing gate passes for outgoing vehicles.

Assembly foreman:

reptacement assembly manager when necessary; delegation of the workactivities (no time-charts); solve teehoical problems of the mechanics; checking incoming assembly kits; opening and locking gate.

Assembly storesman:

responsible for distributing parts in store for assembly. Appendix 11

Appendix B: Internat forms

In the company, several forms are used for daily activities. A list, with the forms used in very department and a short explanation or remark of every form, will give an overview of all forms. This list is shown below.

1. General fonns

1.1 Gate pass: Authorization to drive vehicle out of workshop area.

1.2 Expense advance voucher: Getting cash money in advance for purchasing local goods etc. To be collected at the casbier.

1. 3 Petty cash voucher: Account for spending cash money add with receipt to Finance depart­ ment. This voucher will be checked with the expense advance voucher at the cashier.

1.4 L.P.O.: Local Purebase Order. Five items; White: supplier; Pink: supplier (copy); Green: account department; Yellow: book; White: book.

2. Specitic fonns:

2.1 Administration department:

2.1.1 Employment application form: for new employee.

2.1.2 Personnet information form: general information for employee.

2.1. 3 Personnet requisition form: request to fill up vacancy.

2.1.4 Report a workers committee: to give a penalty.

2.1.5 Notice of the imposition of a disciplinary penalty: to give a penalty;

2.1.6 Loan application form: for employees.

2.1. 7 Application for a loan: for management.

2.1.8 Leave application form: for resigning.

2.1. 9 Visitors pass: to be tilled in by Security when visitor wants to enter workshop etc. 12 Appendix

2.2 Sales department:

2.2.1 Delivery note for bodybuilders: Delivery of chassis to body builder White: customer; Yellow: file; Blue: book.

2.2.2 Delivery note for goods: Delivery of goods to customer or bodybuilder White: customer; Pink: file; Green: book.

2.2.3 Vehicle delivery note: Delivery of vehicle to customer White: customer; Green: account department; Yellow: book.

2.2.4 Delivery certificate: Delivery of vehicle to customer Top: owner; Pink: distributor (LDT); Blue: DAF Central Service; White: product support- International.

2.2.5 Vehicle invoice: for new vehicles to customer.

2.3 Finance department:

2.3.1 Cheque requisition: account goods bought on cheque. Add with receipt to Fin. Department.

2.3.2 Receipt for customer: at casbier at paying invoice.

2.3.3 Cheque receipt voucher: from customer.

2.3.4 Cash receipt voucher: from customer.

2.3.5 Cash disbursement voucher: cash adjustment when money is moved from one souree to another.

2. 3. 6 Purebase ledger joumal voucher: adjustment of purebase ledger after making an error.

2.3.7 Nominalledger joumal voucher: adjustment of nomina! ledger after making an error.

2.3.8 Sales ledger joumal voucher: adjustment of sales ledger after making an error.

2.3.9 New ledger account authorization: to open new account for customer.

2.3.10 Vehicle invoice: coming from sales department. Appendix 13

2.3.11 Invoice/credit note: internal transfers.

2.3.12 Repair invoice external: to Customer; Finance; Workshop; Book.

2.3.13 Credit note external: to give credit to costomers on repair invoices (e.g. warranty) to Customer; Finance; Workshop; Book.

2.3.14 Repair job cost sheet: . calculation and account of total price for repair to customer (Information from job card and vouchers).

2.3.15 PIL 01..05: Profit I Loss account.

2.3.16 BS 01..06: Balance sheet.

2.4 Service department - Parts:

2.4.1 Print of Picking list: to get parts from stores, picked by a bayman.

2.4.2 Print of invoice: for customer. The customer bas to go to the casbier with this invoice, pays the money and gets a receipt. With that receipt he can take the parts and Security can check the parts at the gate when the customer leaves with the copy of the invoice. to Security; Customer; Finance department

2.4.3 Print of Purebase order: to obtain local spare parts outside the company when they are not available.

2.4.4 Goods received note: to be tilled in when local purcbased goods (Land Rover, Range Rover and goods from L.P.O.) enter the stores. to Parts department; Financial department; Financial department computers; Book.

2.4.5 Stock adjustment voucher: to change prices, location etc. of parts in stock.

2.4.6 Parts scrap disposal authorization: to delete parts form stores, when they are not of use any more.

2.4.7 Pro forma invoice: to give information about parts to customer. 14 Appendix

2.4.8 Location change advise form: to suggest to put eertaio parts at another place in stores.

2.4.9 Order form: to order new partsin UK or Holland (No final form, it bas to b checked with M.D. first).

2.5 Service department-Import

Import is only using external farms, issued by the different authorities

2.6 Service department - Maintenance

2.6.1 Maintenance work order: to give description of job to be done and to account activities afterwards. Orig: requester (from the different departments within the company); Dupl.: maintenance; Tri pl.: finance department

2.6.2 Warranty claim form: to be tilled in when casts to repair a vehicle that is under warranty bas to be claimed at DAF International. White: Central Service (DAF International Ltd). Yellow: Central Service (DAF International Ltd). Pink: Subsidiary, Importer (Leyland DAF Tanzania Ltd.). Green: Dealer (Leyland DAF Tanzania Ltd.).

2.6.3 Maintenance stores material requisition: to purebase materials from stores: Orig.: Maintenance store. Dupl. : Finance department

2.6.4 Gate pass for company vehicles: to authorize to make a necessary trip with a company vehicle.

2.7 Service department-Workshop

2.7.1 Delivery note materials: General notes issued when materials like oil are used for repair. Taken in the calculation of the repair job cost sheet.

2.7.2 Job card: Description for every job, opened at beginning of the job at reception. White: customer (During repair it is fittedon the vehicle); Green: reception; Blue: workshop.

2.7.3 Gate pass: Official gate pass to authorize customer vehicles leaving the property White: security; Pink: customer or driver; Blue: hook. Appendix 15

2.8 Service department - Reception

2.8.1 Job card: see workshop.

2.8.2 Service record card: keeping information about vehicles from returning customers.

2.8.3 Repair order register: overview of repairs in a period.

2.9 Service department - Assembly

2.9.1 P.D.I. form: Pre Delivery Inspeetion form. To be used before new vehicle goes to the customer. Appendix 17

Appendix C: Checklist condition of vehicles

Vehicle I I Mileage Reg. no. recorder ~------~

Make& I Type ~------~ Date of I Vehi~le inspeetion ...______. locatton I

~------~ !! READ EXPLANATION OF THE CHECKLIST FIRST !! : SEE LAST PAGE.

Overview of group scores and repair advice. To be filled in after completing the checklist. GROUP SCORE 1. BRAKES, STEERING 2. TIRES, WHEELS 3. CHASSIS, TRANSMISSION 4.ENGINE,GEARBOX 5. ELECTRICAL SYSTEM 6. CABINE 7. SUPERSTRUCTURE, BUS BODY

REPAIR ADVICE Refer to the number(s) of the item(s) on the checklist to be repaired. 18 Appendix

1. BRAKES, STEERING 100 1.1 Thickness brake lining OK: 9 mrn or more < > 5-8mm <> 5 0-4cm <>30

1.2 Air pressure tanks OK<> conneetion to chassis not in order < > 5 missing, then stop checking this group. Continue with group 2 < > 100 RUN TIIE ENGINE 1.3 Brake system air pressure OK<> air pressure ± 8 bar, and pressure build up in ± 3 - 5 min. not correct < > 50 air pressure significantly lower than 8 bar, and I or pressure build up in more than 5 min. no air, then stop checking this group. Continue with group 2 <>100 I .4 Brake system general OK < > items missing from actuating chambers and components < > I 0 · hoses damaged or dried < > 20 (for lorries including hoses for semi-trailer) leakage < > 40 I.S Parking brake OK<> not working < > 40 1.6 Hydraulic power steering OK<> not work.ing < > 100 1.7 Steering free play on steering wheel 0-7cm<> 8-lOcm <>20 liernormore <>30 STOP THE ENGINE 1.8 Hydraulic power steering hoses or connections OK<> leak:age < > 10 SCORE GROUP 1. ....

2. TIRES RIMS 100 2.1 Total numbers of lires (wheels) without spare wheel ( .... )

2.2 Wheel(s) missing No<> Yes < >100 2.3 Number of significantly damaged tires ( .... ) 70 • 2.4/2.1 =

2.4 Number of tires with groove depth < 1 mrn (.... ) 50 • 2.5/2.1 =

2.5 Wear pattem of lires: · ONL Y FOR TYRES WHERE GROOVE DEPTH > = 1 MMI OTHERWISE SKIP QUESTION Significantly unegual groove depth between left and right side of tires Number of lires: ( .... ) 40 • 2.6/2.1 =

2.6 Wear pattem of tires: ONL Y FOR TYRES WHERE GROOVE DEPTH > = 1 MMI OTHERWISE SKIP QUESTION Significantly unegual groove depth on contour of tyre Number oftires: ( .... ) 40 • 2.7/2.1 =

2.7 Tyre pressure: Number of lires with insufficient tyre .Pressure, but not for flat lires. ( see 2. 9) ( .... ) 30 • 2.8/2.1 =

2.8 Flat tire(s) No<> Yes < > 15 2.9 Wheel nut(s) missingor severely damaged No<> Yes < > 20 SCORE GROUP 2. . ... Appendix 19

3. CHASSIS, TRANSMISSION 100 3.1 Front axle OK<> damaged, but still functioning < > 20 damaged or broken, not functioning < > 100 3.2 Front shock absorbers OK<> leakage, one side: • left I right • < > 10 leakage, two sides < > IS missing or broken: • left I right • < > 40 3.3 Front suspension OK<> broken springs or bolts: • left I right • < > IS sagged: • left I right • < > 30 completely broken < > 100 JACK UP FRONT AXLE

3.4 Front sus~nsion (and stabilizers, if mounted) OK<> (Check w1th bar) wom attachments: • left I right • < > 10 3.S Front wheel bearings OK<> (Check with bar) si~nificant free play, one side: • left I right • < > 10 s1gnificant free play, two sides < > 20 LOWER FRONT AXLE 3.6 Rear axle and reduction OK<> oil leakage from reduction < > S damaged, but still functioning < > 20 damaged or broken, not functioning < > 100 3.7 Rear shock absorbers if mounted. Otherwise skip this question OK<> leakage, one side: • left I right • < > 10 leakage, two si des < > IS missing or broken: • left I right • < > 40 3.8 Rear suspension OK<> broken springs or bolts: • left I right • < > IS sagged: • left I right • < > IS completely broken < > 100 JACK UP REAR AXLE 3.9 Rear suspension (and stabilizers, if mounted) OK<> (Check with bar) wom attachments: • left I right • < > I 0 3.10 Rear wheel bearings OK<> (Check with bar) si~nificantly free play, one side: • left I right • < > JO s•gnificantly free play, two sides < > 20 LOWER REAR AXLE 3.11 Propeller shaft OK<> missing or loose bolts for attachment < > S wom out or damaged, intlucnee on functioning < > 20 wom out or damaged and not functioning < > 60 missing < > 60 3.12 Diesel tanks and hoses OK<> conneetion to chassis not in order < > S missing fuel cap < > I 0 fuel hoses damaged or dried < > 20 leaka e < > 30 3.13 Mudguards OK<> damaged one side: • left I right • < > S damaged two sides < > 10 missing one side: • left I right • < > 10 missing two sides < > 20 3.14 Semi-trailer coupling for lorries OK<> conneetion to chassis not in order < > 20 wom out < > 40 not complete or missing < > SO 3.1S Spare wheel OK<> not usabie < > 10 missin < > IS 3.16 Chassis frame OK<> missing bolts < > I 0 not straight or damaged < > 60 SCORE GROUP 3. •..• 20 Appendix

4. ENGINE, GEARBOX 100 4.1 Visual engine check OK<> Significant oil leakage < > 10 engine notcomplete < > 15 4.2 Visual gearbox check OK<> oilleakage < > 10 RUN TIIE ENGINE 4.3 Engine running OK: regular < > excessive vibrations and irregular running < > 25 engine not running < > 100 4.4 Engine noise normal < > excessive < > 25 4.5 Gearbox noise normal < > excessive < > 20 4.6 Engine smoke only black when accelerating < > b1ack < > 10 grey < > 10 blue < > 30 4.7 Exhaust system OK<> connections to chassis or engine not in order < > S damaged or thorn < > 10 leaka e < > IS 4.8 Oil pressure gauge OK<> not working < > 10 4.9 Coolant temperature gauge OK<> not working < > I 0 Check Bauery voltmeter ( See electrical system 5.10 ) STOP TIIE ENGINE 4.10 Cooling system OK<> hoses damaged or dried < > S radiator damaged < > 10 water leakage < > 20 4.11 Diesel injection system OK<> leaka e < > 10 4.12 Fan OK<> damaged < > 10 4.13 Fanbelt OK<> slipping or too Joose < > S worn < > S broken < > JO 4.14 lnlet system OK<> missing or loose bolts < > S damaged or thorn < > I 0

4.15 Engine mounting OK<> Thom rubbers of rubbers missing < > 10 4.16 Clutch pedal pressure normal < > tohea <> S 4.17 Clutch pedal free play normal < > too much < > S too linle < > 10 SCORE GROUP 4. . ... Appendix 21

5. ELECTRICAL SYSTEM 100 5.1 Banery OK<> missing caps < > 5 altachment not in order < > 5 damaged < > 10 leakage < > 20 missing, disconnected or dead < > 100 5.2 Electrical wiring OK<> rusted < > 10 damaged < > 20 5.3 Starter motor OK<> not ft.mctioning nonna! < > 30 not functioning < > 50 missing < > 50 5.4 Front lights OK<> one liBhl nol workin_g, rnissin_g or severely damaged: • left I rigiU • < > 15 both hghts nol working, missmg or severely damaged < > 20 5.5 Rear lights OK<> one liBht not workin_g, rnissin_g or severely damaged: • left I right • < > 15 both hghts nol workmg, missmg or severely damaged < > 20 5.6 Stop lights OK<> one liBhl nol workin_g, rnissin_g or severely damaged: • left I righl • < > 25 both hghts nol working, missmg or severely damaged < > 40 5.7 Indicators OK<> one side not worki~, missingor severely damaged: • left I righl • < > 15 both sides nol working, missing or severely damaged < > 20 5.8 Hom OK<> nol working < > I 0 5.9 Banery voltmeter OK<> nol working < > 10 5.10 Fuel gauge OK<> nol working < > 10 SCORE GROUP 5. . ...

6. CABINE 100 6.1 Cab interlor and seats OK<> wom out or nol complete < > 20 rnissi < > 70 6.2 Cab tloor & steps OK<> damaged or broken < > 10 6.3 Windows OK<> crack in windscreen <> 20 windscreen broken <> 40 side window(s) broken or mechanism oot functioning: • left I right • < > 10 windscreen missing <> 60 side window(s) missing: • left I riBIU • <> 20 rear window{s) broken: • left I nghl • <> 5 rear window{s) missing, if originally mounled: • left I righl • <> 20 6.4 Mirrors OK<> broken: • left I rigiU • < > 10 missing: • Ie ft I right • < > 15 6.5 Doors OK<> loek one door nol functioning correctly: • left I right • < > 5 loek all doors nol functioning correctly < > 10 one door oot openinglclosil!ll correctly: • left I right • < > 15 all doors nol opening/closmg correctly < > 20 one door severely damaged: • left I righl • < > 15 all doors severely damaged < > 20 6.6 Cab suspension OK<> damaged or wom out < > 10 22 Appendix

6.7 Wipers & sprayers OK<> not functioning propcrly < > I 0 wiper blade(s) missing < > IS 6.8 Othcr driving controls OK<> missing or broken items or items not functioning corrcctly < > IS 6.9 Cab tilting mcchanism & locking (only for trucks) OK < > hydraulic oillcakage (only for hydraulic mcchanism) < > S not functioning proper!y < > 10 6.10 Outside cabin body (only for trucks) OK<> major damages < > 20 scverc rust < > 10 bumper missing or severely damaged < > 10 SCORE GROUP 6. . ...

7. SUPERSTRUCTURE, BUS BODY (only for rigid and bus) 100 7.1 RIGID: Attachment of superstructure OK<> missing or broken bolts or thom material < > 30 7.2 RIGID: Superstructure OK<> minor damages < > 20 major damages < > SO completcly broken < > 100 7.3 RIGID: T!lting mechanism for tippcr, when available OK<> hydraulic oillcakage < > 10 not functioning properly < > 40 7.4 BUS: Bus body OK<> windows broken, missing or not functioning < > 30 !hom or broken carrying structure < > SO major damages on bus body < > 20 scvere rust < > 10 bumper missingor scverely damaged < > 10 7.5 BUS: Passengers scats in bus OK<> hcavily used < > 30 wom < > 40 one to four scats missing < > 20 more than five scats missing < > 30 SCORE GROUP 7. . ...

EXPLANATION OF THE CHECKLIST: This checklist exists of mostly visual aspects. Por cbecking a vebicle, only two tools are needed: A jack for jacicing u~ front and rear axle and a bar for cbecking suspension and wheel hearings. Tbe vebicle is. div1deû into ~even groups and eacb group will be checlred separately. Within eacb group several Items are menuoned. After checking tbe specific item, one or more of tbe possibilities can be marked in the < > sign. It can happen that an item is not correct on more tbaii one of tbe possibilities. At * left I right *, tbe side or sides concemed will have to be marked. Sometimes, an action is needed. This will be mentioned when necessary. Tbe score of tbe groups can be calculated by subtracting from 100, the points at the possibilities marked. Wben an item is OK nothing will have to be subtracted. In die end, the score of the groups can be tilled in the table on this page. Finally, a repair ad vice can be given, when needed. In case one or more of tbe groups have a score lower tban 100, tbe condition of tbe vebicle is not optimal. Wben one or more items cbecked are .oot markeel with the first possibility (OK or nonnal), a repair advice can be considered. Wllen giving a repair advice, also mention the number(s) of the item(s) concemed. Appendix 23

Appendix D: Checklist condition of vehicles adjusted for UDA

Vehicle I I Mileage Reg. no. ...______...~ recorder

Make & Type I ~------~

Date of I ·1 Vehicle inspeetion ..______._ I location '------'

!! READ EXPLANATION OF THE CHECKLIST FIRST!!: SEE LAST PAGE.

Overview of group scores and repair advice. To be filled in after completing the checklist. GROUP SCORE 1. BRAKES, STEERING 2. TIRES, WHEELS 3. CHASSIS, TRANSMISSION 4. ENGINE,GEARBOX 5. ELECTRICAL SYSTEM 6. BUS BODY & INTERlOR

REPAIR ADVICE Refer to the number(s) of the item(s) on the checklist to be repaired. 24 Appendix

1. BRAKES, STEERING 100 1.1 lbickness brake lining OK: 9 mrn or more < > S-8 mm < > S 0-4mm <>30

1.2 Air pressure tanks OK<> conneetion to chassis not in order < > S missing, then stop checking this group. Continue with group 2 < > 100 RUN THE ENGINE 1.3 Brake system air pressure OK<> air pressure ± 8 bar, and pressure build up in ± 3 - 5 min. not correct < > 50 air pressure significantly lower than 8 bar, and I or pressure build up in more than 5 min. no air, then stop checking this group. Continue with group 2 < >100 1.4 Brake system general OK < > items missing from actuating chambers and components < > 10 hoses damaged or dried < > 20 (for lorries including hoses for semi-trailer) leakage < > 40 l.S Parking brake OK<> not woricing < > 40 1.6 Hydraulic power steering OK<> not woricing < > 100 1.7 Steering free play on steering wheel 0-7cm<> 8-lOcm <>20 liernormore <>30 STOP THE ENGINE 1.8 Hydraulic power steering hoses or connections OK<> leakae <>10 SCORE GROUP I. ....

2. TIRES RIMS 100 2.1 Total numbers of tires (wheels) without spare wheel ( .... )

2.2 Wheel(s) missing No<> Yes <>100 2.3 Number of signiticantly damaged tires ( .... ) 70. 2.4/2.1 =

2.4 Number of tires with groove depth < 1 mm (.... ) 50. 2.5/2.1 =

2.5 Wear pattem of lires: ONL Y FOR TYRES WilERE GROOVE DEPTH > = 1 MM! OTHERWISE SKIP QUESTION Signiticantly unegual groove depth between left and right side of tires Number of tires: ( .... ) 40 • 2.6/2.1 =

2.6 Wear pattem of lires: ONL Y FOR TYRES WilERE GROOVE DEPTH > = 1 MM! OTHERWISE SKIP QUESTION Significantly unequal groove depth on contour oftyre Number of tires: ( .... ) 40. 2.7/2.1 =

2.7 Tyre pressure: Number of lires with insufficient tyre .Pressure, but not for flat tlres. ( see 2. 9) (.... ) 30. 2.8/2.1 =

2.8 Flat tire(s) No<> Yes < > 15 2.9 Wheel nut(s) missing or severely damaged No<> Yes < > 20 SCORE GROUP 2. .. .. Appendix 25

3. CHASSIS, TRANSMISSION 100 3.I front axle OK<> damaged, but still functioning < > 20 damaged or broken, not functioning < > 100 3.2 front shock absorbers OK<> leakage, one side: • left I right • < > IO leakage, two sides < > IS missing or broken: • left I right • < > 40 3.3 front suspension OK<> broken springs or bolts: • left I right • < > IS sagged: • left I right • < > 30 completely broken < > 100 JACK UP FRONT AXLE 3.4 front SUS{l (Check Wlth bar) wom attachments: • left I right • < > 10 3.S front wheel bearings OK<> (Check with bar) si~nificant free play, one side: • left I right • < > 10 Significant free play, two sides < > 20 LOWER FRONT AXLE 3.6 Rear axle and reduction OK<> oil leakage from reduction < > S damaged, but still functioning < > 20 damaged or broken, not functioning < > 100 3.7 Rear shock absorbers if mounted. Otherwise skip this question OK<> leakage, one side: • left I right • < > 10 leakage, two sides < > IS missing or broken: • left I right • < > 40 3.8 Rear suspension OK<> broken springs or bolts: • left I right • < > IS sagged: • left I right • < > IS completely broken < > 100 JACK UP REAR AXLE 3.9 Rear suspension (and stabilizers, if mounted) OK<> (Check with bar) wom attachments: • left I right • < > 10 3.10 Rear wheel bearings OK<> (Check with bar) si~nificantly free play, one side: • left I right • < > 10 Slgnificantly free play, two sides < > 20 LOWER REAR AXLE 3.11 Propeller sha ft OK<> missing or loose bolts for attachment < > S wom out or damaged, intlucnee on functioning < > 20 wom out or damaged and not functioning < > 60 missing < > 60 3.12 Diesel tanks and hoses OK<> conneetion to chassis not in order < > S missing fuel cap < > 10 fuel hoses damaged or dried < > 20 leaka e < > 30 3.13 Mudguards OK<> damaged one side: • left I right • < > S damaged two sides < > 10 missing one side: • left I right • < > 10 missing two sides < > 20 3.14 Semi-trailer coupling for lorries OK<> conneetion to chassis not in order < > 20 wom out < > 40 not complete or missing < > SO 3.1S Spare wheel OK<> nol usabie < > 10 missi < > IS 3.16 Chassis frame OK<> missing bolts < > 10 not straight or damaged < > 60 SCORE GROUP 3. . ... 26 Appendix

4. ENGINE, GEARBOX 100 4.1 Visua1 engine check OK<> Significant oi1leakage < > 10 engine not complete < > 15

4.2 Visual gearbox check OK<> oil leakage < > 10

RUN TIIE ENGINE 4.3 Engine running OK: regular < > excessive vibrations and irregular running < > 25 engine not running < > 100 4.4 Engine noise normal < > excessive < > 25 4.5 Gearbox noise normal<> excessive < > 20 4.6 Engine smoke only black when acecicrating < > black < > 10 grey < > 10 blue < > 30 4.7 Exhaust system OK<> connections to chassis or engine not in order < > 5 damaged or thom < > I 0 leaka e < > IS 4.8 Oil pressure gauge OK<> not working < > 10 4.9 Coolant temperature gauge OK<> not working < > I 0 Check Battery voltmeter ( See electrical system 5.10) STOP TIIE ENGINE

4.10 Cooling system OK<> hoses damaged or dried < > 5 radiator damaged < > 10 water 1eakage < > 20 4.11 Diesel injection system OK<> leaka e < > 10 4.12 Fan OK<> damaged < > 10 4.13 Fanbelt OK<> slipping or too 1oose < > 5 wom <> 5 broken < > 10 4.14 lnlet system OK<> missing or loose bolts < > 5 damaged or thom < > 10

4.15 Engine mounting OK<> Thom rubbers of rubbers missing < > 10 4.16 Clutch peda! pressure normal < > to heav < > 5 4.17 C1utch peda! free p1ay normal < > too much < > 5 too linie < > 10 SCORE GROUP 4. . ... I -

Appendix 27

s. ELECTRICAL SYSTEM 100 5.1 Battery OK<> missing caps < > S auachmcnt not in order < > 5 damagcd < > 10 lcakagc < > 20 missing, disc:onncctcd or dcad < > 100 5.2 Electrical wiring OK<> rustcd < > 10 damagcd < > 20 5.3 Starter motor OK<> not functioning normal < > 30 not functioning < > 50 missing < > 50 5.4 Front lights OK<> one liBht not workin_g, missin_g or scvcrely damagcd: • left I riglU • < > 15 both hghts not work.ing, missmg or sevcrely damagcd < > 20 5.5 Rcar lights OK<> one liBht not workin_g, missin_g or severely damagcd: • lcft I right • < > 15 both hghts not work.ing, missmg or severely damagcd < > 20 5.6 Stop lights OK<> onc liBht not workin_g, missin_g or severely damagcd: • lcft I riglU • < > 2S both hghts not work.ing, missmg or sevcrely damagcd < > 40 5.7 Indicators OK<> onc sidc not working, missingor severely damagcd: • left I riglU • < > IS both sides not working, missing or sevcrely damagcd < > 20 5.8 Hom OK<> not working < > 10 5.9 Battery voltmeter OK<> not working < > 10 5.10 Fucl gauge OK<> not working < > 10 SCORE GROUP 5. 6. BUS BODY & INTERlOR 100 6.1 Floor & steps OK<> damagcd or broken < > 10 6.2 Windows OK<> crack in windscreen <> 20 windscreen broken <> 40 windscreen missing <> 60 side window{s) brokcn or mechanism not functioning: • left I right • < > 10 sidc window(s) missing: • left I riBht • < > 15 rcar window(s) broken: • left I nght • < > s rcar window(s) missing: • lcft I right • < > 20 6.3 Mirrors OK<> broken: • left I riglU • < > 10 missing: • left I right • < > 1S 6.4 Wipers & sprayers OK<> not functioning properly < > 10 wiper bladc(s) missing < > 15 6.5 Bus body OK<> reflectors missing: • left I right • < > S major damages on bus body < > 20 · sevcre rust < > 10 bumper missingor sevcrely damagcd < > 10 6.6 Driver's scat OK<> heavily uscd < > 1S worn < > 20 missin < > 70 6.6 Passengers' scat OK<> hcavily uscd < > 15 worn < > 20 onc to four passenger seats missing < > 30 more than five passenger seats missing < > 40 SCORE GROUP 6. • ••. 28 Appendix

EXPLANATION OF THE CHECKLIST:

This checklist exists of mostly visual aspects. For checking a vehicle, only two tools are needed: A jack for jacking up front and rear axle and a bar for checking suspension and wheel hearings. The vehicle is divided into seven groups and each group will be checked separately. Within each group several items are mentioned.

After checking the specific item, one or more of the possibilities cao be marked in the < > sign. It cao happen that an item is oot correct on more than one of the possibilities. At * left I right *, the side or sides concemed will have to be marked.

Sometimes, an action is needed. This will be mentioned when necessary.

The score of the groups cao be calculated by subtracting from 100, the points at the possibilities marked. When an item is OK nothing will have to be subtracted. In the end, the score of the groups cao be tilled in the table on this page.

Finally, a repair advice cao be given, when needed. In case one or more of the groups have a score lower than 100, the condition of the vehicle is not optimal. When one or more items checked are oot marked with the first possibility (OK or normal), a repair advice cao be considered. When giving a repair advice, also mention the number(s) of the item(s) concemed.

EXTRA COMMENTS REPAIR ADVICE Refer to the number(s) of the item(s) on the checklist to be repaired. Appendix 29

Appendix E: Questionnaire private road banlage sector

1. Specificadons of the company 1.1 What is the year of establishment? ...... 1.2 Is your company Tanzanian owned? <>yes <> no 1. 3 What is the total number of personnel? ......

1.4 What is the total number of drivers? ......

1.5 What is the total number of administrative personnel? ...... 1. 6 Does your company have branches or depots up country or abroad ? < > yes < > no if yes: where are they located ? Branches up country ......

Branches abroad ......

Depots up country ......

Depots abroad ...... 1. 7 Is your company also doing clearing and forwarding ? < > yes < > no 1. 8 Is your company sub-contracting to other road haulage companies ? < > yes < > no If yes, how many percent of the cargo is sub-contracted? ......

1.9 What was the turnover in 1992 (Tsh.) ? 2. Rolling stock 2.1 What is the total number of trucks ? 2.2 Which makes and tyPes of trucks does your company have and how many of them ? What are the carrymg capacities in tons of tbat trucks ? Please specify the different makes and the different types. Type: T = truck semi-trailer combination R = rigid (with trailer) 0 =tanker NUMBER MAKE OF TRUCK TYPE CAPACITY TONS 30 Appendix

2.3 Which make and type does your company prefer and why ? ...... 2.4 How many (semi-)trailers and inter-links does your company have ? Types: trailer, semi-trailer, inter-link

NUMBER TYPE NUMBER OF AXLES CAP ACITY TONS

2.5 Does your company have trucks pulliog a combination of inter-link and semi-trailer? <>yes <>DO if yes, how many combinarloos ? Do your company have trucks pulliog a combination of semi-trailer and trailer? <>yes <>DO if yes, how many combinatioos ?

2.6 What are the years of delivery of the trucks?

Year of Number of Year of Number of Year of Number of delivery trucks delivery trucks delivery trucks < = 1970 1978 1986 1971 1979 1987 1972 1980 1988 1973 1981 1989 1974 1982 1990 1975 1983 1991

1976 1984 1992

1977 1985 1993

2. 7 After how many years are the trucks replaced ? ......

2.8 Is the company buyiog oew or used trucks wheo replaciog old ooes ?< > oew < > used

2. 9 Are there any changes and/or adjustments made on the standard trucks ?< > yes < > no If yes, which changes and/or adjustmeots? ...... Appendix 31

2.10 Wbat is the maximum load your company is toading on a truck ? ......

2.11 Is your company doing preventive maintenance (services etc.) on the trucks ? <>yes <>DO lf yes, what are the activities ? ......

In case preventive maintenance is been done: Does your company have a maintenance scbedule for the trucks? <>yes <>DO If yes, what are the intervals for maintenance ?

2.12 Whicb repair & maintenance activities are carried out by your company ? (first column) Wbich activities are contracted toothers (second column) and who ts doing tbis repair & maintenance activities? (last column)

OWN REP.& MAINT. ACT. CONTRACTED REP. & CONTRACTED TO : MAINT. ACT.

2.13 Wbat were the variabie costs for trucks (fuel, oil & lubricants, tires & tubes, repair & maintenance) in 1992 ? fuel ...... oil & lubr...... tires & tubes ...... rep. & maint...... 3. Financial aspects 3.1 Wbat is the yearly investment in new or used trucks & trailers ?

3.2 Does the company buy trucks directly from abroad? < > yes < > no lf yes, how does the company obtain the neccessary foreign exchange ? 32 Appendix

4. Transport of cargo 4.1 What kind of cargo bas been transported by your company in 1992 (different categories) and how much ? Please divide into the categories: agri-cultural goods bulk goods industrial goods (other than bulk goods) consumer goods fuel Is the cargo transported by container ? (Please fill in second column) In case of container transport: When it is unclear what kind of cargo is inside the container, please fill in: 'container' as categorie in the first column.

KIND OF CARGO TRANSPORTED IN 1992 CONTAINER TRANSPORTED TRANSPORT TONNAGE YES I NO

4.2 In case of container transport: Does your company have equipment to load I unload containers on I off semi-trailers ? <>yes <>DO If yes, where is it situated? ......

......

4.3 What is the origin of most of the cargo and where is it collected? ...... 4.4 What is the type of transport ( intra-regional, inter-regional, international ) and what are the main desunations of the transported cargo ? < > intra-regional < > inter-regional < > international

Main destinations ...... 4.5 Are there combinations with other means of transport ? <>yes <> no Wbich means ? ......

4.6 Are the trucks monitored when they are on the road or when they reach their destination? <>yes <>DO lf yes, how are they monitored...... Appendix 33

5. Transport data 5.1 Wbat were the total transported tonnes of cargo last year (1992) ?

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • e • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 5.2 Wbat were the transpotled tonnes (or number of containers) of transit cargo last year? ...... 5.3 Wbat were the driven kilometres last year (1992) per truckor in total?

5.4 Wbat were the number of trips made in 1992? ...... How many of the trips had return cargo in 1992 ?

6. Costomers 6.1 How is the total price calculated, the customer bas to pay to transport his cargo from origin to destination ?

6.2 Wbat is the customer price to transport 1 ton x km ? If your company is giving fixed prices on specific routes, please give one route with its distance and its customer transport price (per weight, per container or per full truck)......

Is this price negotiable? < > yes <>DO

6.3 Does your company have regular customers ? <>yes <> no

If yes, does your company have more regular customers than incidental customers? <>yes <> no 6.4 How does your company get the orders from customers? And how does the company attract customers ? (commercials ?) 34 Appendix

6.5 Is there direct competition with other road haulage companies ? <>yes <>DO

If yes, which ones ? ......

6.6 a. How many costomers do you have ? ......

b. How many of them are located in Tanzania ? ......

c. How many of your costomers are located outside Tanzania but within Africa? ......

d. How many of your costomers are located in Europe ? ......

e. How many of your costomers are public ooropanies ? ......

f. How many of your costomers are donor institutions? ......

g. How many of your costomers are shipping agencies ? ......

h. How many of your costomers are clearing and forwarding agents ?

l. How many of your costomers are road haulage companies (sub-contracting)? ...... (If this data are not available, please give an estimation according your experience)

7. Planning 7.1 Does your company have a planning system for route and capacity planning ? <>yes <>DO If yes, what kind of planning system does your company have ?

If no, how is planning of capacity and routes been done ? ......

7.2 Is your company transporting a combination of different cargo with same direction or destination on one truck ? <>yes <>DO .------

Appendix 35

8. Transport legislation and regulations 8.1 Which restrictions does your company have with respect to maximum load and transport routes ? (route Heences ).

9. Opinions 9.1 What are the main problems afflicting your company with respect to :

A. lnfrastructure, ......

...... " ...... ; ......

B. carrying capacities ......

C. financing ......

D. competition ......

E. government regulations ......

F. others ......

9.2 What should, according to you, be changed inside or outside the company to improve the road haulage sector and your company ?

9.3 How do you see the future of the road haulage sector?

< > very optmnsnc < > not optimistic I not pessimistic < > pessimistic < > very pessimistic Why? ......

Thank you very much for your cooperation and for t!le time you spend on this interview. Appendix 37

Appendix F: Checklist truck fleet

TYPE OF VEHICLE Mark the possibility

VEHICLE NR: 1 2 3 4 s 6 7 8 9 10 TYPE

'IRUCK

'IR.+ SEMI-TRAIL

'IR. INT-L S-TRA

'IR. S-TRA + TRA

RIGID

RIG. +TRAILER

TANKER

TANK + TRAILER

TR. TANKS-TRA

TIRES Fill in the number of tires responding the different possibilities.

VEHICLENR: 1 2 3 4 s 6 7 8 9 10 STA TE OF TIRES

TOTAL NUMBER OFTIRES

GOOD

AVERAGE

WORN OUT

SIGNIFICANTL Y DAMAGED

FLAT

MISSING

CHASSIS + ATTACHED COMPONENTS Mark the possibility for state of chassis + attached components

VEHICLENR: 1 2 3 4 s 6 7 8 9 10 STATE OF CH. + ATT. COMPO- NENTS

VERYGOOD

GOOD

AVERAGE

POOR

VERY POOR

IIMPROVISED REPAIRS YES/NO 38 Appendix

LIGHTS Mark the possibilities for the lights

VEHICLENR: 1 2 3 4 s 6 7 8 9 10 LIGHTS

COMPLETE

FRONT LIG~ NOTCOMPL

FRONT LIGHT(S) BROKEN

REARLIGHT~ NOTCOMPL

REAR LIGHTS BROKEN

SCREENS & MIRRORS Mark the occurred problems

VEHICLE NR: 1 2 3 4 s 6 7 8 9 10

CRACK IN WIND- SCREEN

CRACK IN OTIIER SCREENS

MIRRORS MISSING ORBROKEN

OUTSIDE CAB BODY Mark the possibility for state of the outside cab body

VEHICLE NR: 1 2 3 4 s 6 7 8 9 10 STATE OF OUT- SIDE CAB BODY

VERY GOOD

GOOD

AVERAGE

POOR

VERY POOR

IIMPROVISED REPAIRS YES/NO Appendix 39

Appendix G: Print out survey private road haulage sector Survey Road Haulage sector

lnqulry ....: 1 2 I 4 • 7 8 • 10 nr. QuedoN ~ SPECIFICA.TIONS = 1.1 y.., of •t.blllhment 80 78 85 78 ea .., 81 48 82 1 .2 TMUnlan owned 1 0 •1 1 1 0 1 1 1 1 1.3 Number ofto-' p ..onnel 70 170 3!0 75 58 50 '70 7 170 157 1.4 Number of drivers 14 50 85 21 21 15 1!5 2 102 ~ 1.5 Nunm. of adml...... ,. p-.onnel 8 45 13 3 4 10 3 2 30 15 1.e Branches or dlpota up country or *oecl 0 1 0 1 1 1 0 0 1 0 1.1 CIMring a Forwwclng 0 1 0 0 1 1 0 1 0 0 1.8 Sub-contreDing 0 1 0 0 1 1 1 0 0 1 1.81 I yes, how rnany peroent 15 15 70 15 3t5 1.8 Twnover 4!500000 VEHICLE FLEIT 2.1 Number of1ruoks 18 50 75 20 13 28 33 2 50 84 2.2 Specilloa1ioN 1ruolca Meroed• 3 44 30 15 27 5 2 30 soan. 5 3 13 1 1 20 Volvo 84 Leylanc:t 1 4 DAF lveoo 25 Plllt 10 1!5 MAN 1 Faun 8 ledford 15 laUIU B Maok Boemmei Mdnaon FOrd TAM

Truck Mml-"*' I 18 1 22 2 38 Truok l,.,.nk Mml-hiler • a 3 1 ze Truok •mi-1rlliler ...._. Agld 8 Agldhiler 2 35 2 8 2 Flgld doll Mml-tnlllw a ~ Trier tuok Hml-tnliler 3 10 2 "1:5 Tanker lmerlnk Hml•hller 8 [ Tanker Flgkl !=(• anker hller 5 15 Totlil 18 !SO 75 20 13 28 33 2 84 ln-.,lliry nr.: 11 12 13 14 15 11 17 18 11 20 Qrr. Questons ~ SPECIFICAOONS ~ 1.1 v.. otM11btlahment 18 87 '71 81 38 11 14 78 11 1.2 TanzariM owned 1 1 0 1 •0 1 0 1 1 1 S<·~ 1.3 Number oftotat pnonnel 75 120 120 eo 7! 70 '70 10 200 7! 1.4 Number of drlwra 30 23 40 28 30 25 12 30 eo 25 1.5 Number of admlnla1ratlw pertOnMI 14 30 32 7 10 10 I 10 12 1 .I BrMOhea or depots ..., oounlry or abrolld 0 0 1 1 1 1 0 1 •0 1 1 .7 CIMring a r:crw.ntng 0 1 1 0 1 0 1 1 0 1 1.8 sw-oomr.ot~ng 0 1 1 1 1 0 1 1 1 1 1.81 11 y.a, how m.ny percent 5 30 2 10 eo 20 15 1.8 Turnowr 800000 eeooooo 1000000 170000 VEHICU! FLEET 2.1 Number ofwUID 25 50 40 22 50 21 1t 30 eo 22 2.2 8peclftodona 1rUOka Meroedea 35 11 8 e 5 11 1 I 80Mia 25 18 1 5 V oM> •4 2 Leyland 10 • 3 2 OAF I lveoo 5 11 38 Fi. t.MN 7 F.un Bedford tauzu Maak 5 Summet 2 Atklnaon 5 Ford 47 TAM 2

Truok Hml-tniler 21 11 30 11 2 Truck tm.rlnk Hml-hller 13 10 14 Truck •ml-trliler dra..- 12 I ~d 48 Ngld11Wtw 10 Agld dolt ..ml-trllilw T.rtkerhok ..mi-11Wfw 10 8 Trier lmtrlnk ..mi-hier 2 Trier Agld ~ Trier .... 18 Tot.! 25 50 22 28 11 22 """" lnq._., ...: 1 2 a 4 5 e 7 e 10 Qnr. Quutlona • 2 .s y..,. of d.uv.ry of 1ruoks

< 1rt70 15 13 1rt71 4 1rt72 4 1973 18 3 1974 1rt75 5 1rt78 1rt77 1878 30 1979 a 1880 1981 1882 1&83 1984 s 1S 188S 1 5 HllfS 2 '1 3 5 1987 28' 3 5 5 1988 1 1 5 1- 4 2 1 !5 1810 3 1 4 3 1.1 4 2 2 2 10 1882 5 25 1 10 20 1883 1 4 8 14

Tollil 18 50 75 20 13 28 S3 2 50 34

QAAGO TMNSPORT'ED IN 1882 4.1 Cone.Jner oargo (inol. SCJrN lOOM oargo) In tonnes eeoo 30000 aeooo 3SNJO f5000 8000 HIOO 4!100 212!10 Fuelln tonnN 8000 18000 !520 2000 37e0

5.1 Totalnnaported tonnes af_,go In 1882 1!1800 30000 51000 4410 !5000 8000 1500 eoo 25000 Transit o•go In 1882 0 27000 51000 4350 2000 8000 7t50 3000 25000

4.4 lrar-ndonel1ransport 1 1 1 1 1 1 1 1 lnlar -reglonal tr-port 1 1 1 1 1 1 1 1 Intra -reaioNI1ranaoort 1 1 1 1

% lrar-natioN 1rantport 80 87 40 50 4ts 100 % 1"'*'-regloMI 1ransport 100 10 3 80 50 % Intra-reaioN traneoof't 100

4.!5 Combinatio ns wl1h othltr .,...". af trWIN)ort (l'llllgy}. 1 1 1 4.8 Trucks .. monltored on the ro.t 1 1 1 1 1 1 1

5.3 cnv.n kBol'lletllrS per 1ruck In 1882 (•timaton) 40000 4!1000 30000 40000 MlO()() 100000 85000 1eOOO lnqellry nr.: 11 12 18 14 1S 18 17 18 18 20 Cl nr. au..tlona 2 .I V..,. of dellwry of truak8

< 1970 40 1971 um 1973 1974 1875 5 1978 1m 1978 2 5 2 1878 2 a 13 1810 2 1881 2 7 7 1982 2 8 7 a a 1983 2 7 2 11i184 3 3 191!5 3 4 1918 2 1887 5 2 a 111188 e I 2 a 1988 8 e 2 1 1810 8 2 2 1.1 a 7 2 30 1912 25 7 3 1 7 • 13' 13 1813 • a Total 25 50 40 22 50 21 11 30 eo 22

CAA

5.1 Totlil tranaportMI tonnea of cargo In 18812 25000 23150 28000 10150 10125 7200 sooo 1000 200000 1700 Transit Oll'go In 1882 25000 1500 28000 1000 10825 14e0 2250 4200 0 1700

4.4 lnltr-natlon.11ranlport 1 1 1 1 1 1 1 1 1 lntltr-regiONI hnlport 1 1 1 1 1 lnlra-reciONIInnaDOrt 1 1

% Jrar-nldlof'llll hnlport 100 85 100 10 100 20 75 70 100 % lf*r-reglonlll hnaport 35 30 80 25 30 % Intra-reaionlil --anaDort 10 100

4.5 Comblnationa wlth other means of1raneDOrt cr•twav) 1 1 0 1 0 4.1 Trucka .. moniaed on the ra.d 1 1 1 1 1 1 1 1 1

ts.a Orlwn klomeW. per t'uok In 1912 (eatimafon) 10000 120000 25000 35000 85000 27000 30000 11000 100000 tnqa.ry nr.: 1 2 a 4 5 7 8 8 10 nr. Questlona • t CUSTOMEAB 1.2 C..torner prloe t-.ulage tD Annda,Ekrundl eto.(USD~n 117 1U 145 125 125 haulage to Flwancla, lwuncl (total prioe/ oomblnatlon) haulage to Morogoro (lxecl prloe USO up to 40 tona) 4«) haulage to ArUiha (lxed prloe USD up to 40 tona) 880 Cuatomer prtoe looai\"Maport 0. es Salum (Tsh.tton) 1500 Ne llble 0 0 0 0 0 0

1.3 More r~u• oUitomera tlwllnoldenllll ouatomera 1 0 1 0 0

1.5 Direct oompetlllon 0 0

1.1 Total OUIIDI'IWI ! 1 a 2! 8 7 10 ! Cuatornertln TanzMia 2 1 1 1 8 7 10 Cuatornen outsiele Tanania. withln Atioa Custornenln Europe s 2 20 5 Caatornen: Publlo oompMiea 1 2 2 Cuatomers: Donor lnritutiona 20 Caatomers: Shipping agenoiM ! cuatomer~: auring a Fo,_.dlng 1 a !5 Cuatornen: AoiiCI hautage oompanlee 2 a

PLANNING 7.1 Planning ay~tem 0 0 0 0

7.2 Dihrent cargo wlth..,. destlnatlon on one truck 0 0 0 0 0

OPINIO NB 1.3 fruture ro., haulage MOtc:tr -1 -2 0 -1 2 -1 2 • vwy optmlstlo 1 • optmlstlo 0 • not optlmlstlo I not P•lirnldo -1 • peaimldo -2 • VMYPUiinnllo

"1S~

~s:<· lnqulry ...: 11 12 11 14 15 11 17 11 18 20 ~ Q_nr. CueliliON ~ ~ CUSTOMEfiB 8.2 Customer prioe haulqe to Rwllnda,.,uncll .tc.(USO/lOn 150 138 120 12!5 haulage to Awllncla, Burundi ('otlll prloe 1oomblnllllon) 2000 ~ t.ulage to Morogoro (lud pfloe USO up to 40 tona) ha&Hp to Arusha (llxed prloe USO up to 40 tona) C~mer prioe localhNpoft 0. •• a.laam (Tsh.l'on) 2000 Neaoliabla Drioe 0 1 1 1

8.3 More regWw OUSIDJMrS than lnoldentlll OuRtfM'S 0 1 1 1 1

8.5 Direct oomprilion 1 1 1 0 0 1

8.8 T~ owtomers 7 12 27 20 2!5 1 5 2fS 7 Customersln TIII!Dnla 15 7 8 1 D 2!5 7 Customers outlilde Tanzania, wlthln Atloa 18 3 Custonwsln Europe !S 1 27 8 3 Custonwa: Publlo oompMiea 2 4 10 1 Customers: Donor lnattutlona 2 •2 7 4 Custonws: Shlpplng • .-.. a 1 10 Cuatomers: Cle8ring a Porw.dlng 4 20 3 Cudomers: Aoad haulqe ~· 2 !S

PLANNING 7.1 Planring eyet.m 0 0

7.2 OHfwent owgo wlth ... c:lednaton on one truck 0 0 1

OPINIO NB 8.3 Future road haLllage _., -1 2 -1 0 0 -1 -1 0 46 Appendix

List of companies:

The nurnbers are corresponding with the inquiry numbers on the print out in Appendix B.

1. Integrated Transport Services

2. Interfreight

3. Kassan's Transport

4. Msoza Transport

5. Allied Cargo Freighters

6. Cross Country

7. Seifi Transport

8. Wheels of Africa

9. F.M. Abri

10. NAS Hauliers 11. Superstar

12. C.F.S.L

13. Highway Express

14. Tantrax

15. Armstrong

16. Mair's Transport

17. Intraship

18. Blueline Enterprises

19. Kassam Transport & Garage 20. Transcargo