Central railway concession to the RITES-led Tanzania Railways Limited, and its collapse in 2011
Tanzania concessioned the central railway network for 25 years to Tanzania Railways Limited, 51 percent owned by a consortium led by Rail India Technical and Economic Services, which took over operations in October 2007; freight fell from 470,000 tons in 2008 to 237,000 tons in 2010, and after a dispute the RITES shares were transferred to the government in 2011, leaving the operator fully state owned four years into the term.
237,000 tons, freight carried by tanzania railways limited on the central (metre gauge) network, 2010. 470,000 tons, freight carried by tanzania railways limited in its first full year of concession operation, 2008. World Bank, Project Appraisal Document, Tanzania Intermodal and Rail Development Project (P127241), Report No. 78925-TZ, April 2014, paragraphs 14 and 16, retrieved 2026-10-02.
The move, and what it needed
The government unbundled the railway into an asset-holding company and an operating company, sold 51 percent of the operator to a foreign rail consortium on a 25-year concession, and kept the track; when traffic, investment and maintenance fell short, the state bought back the private shares and ran the operator itself.
Preconditions
- A base load of bulk freight large enough to make a concession pay, which the central line had lost before the handover
- Contract terms that oblige and finance track maintenance, which here sat between an asset holder and an operator
- A short bidding and handover period, so traffic does not leak to road while the deal is negotiated
Where else it has been used: The Beira railway concession in Mozambique, signed in 2004 and terminated on 7 December 2011 according to its World Bank completion report, ended the same way in the same year (see moz-beira-railway).
Limits: The figures are in a PDF, on pages 16 and 17 of the appraisal document (printed pages 4 and 5), written by the World Bank as it prepared a new loan to the now state-owned operator, so the publisher had an interest in describing the concession as a failure. The PAD gives no date in 2011 for the share transfer and calls it amicable, and it is not consistent on the year: paragraph 16 (page 17) puts the transfer in 2011 and an annex (PDF page 116) says TRL took over in 2011, but another annex paragraph (PDF page 117, Annex paragraph 28) says the concession was terminated in 2010; the concession was not formally terminated by a court or an arbitral award in this source, so what ended was private participation, not the railway. The earlier completion report for the Central Transport Corridor Project (ICR00001299, June 2010, page 9) records the concession as performing poorly and the parties discussing termination, and adds (paragraph 94) that most of the traffic had already moved to road during the two years of bidding delay, from 1.2 to 0.5 million tons a year, before the concessionaire took over: the decline therefore began under public operation. The 2008 to 2010 fall also includes the 2009 to 2010 floods in the Kilosa to Gulwe section, which the PAD says halted services between Dar es Salaam and Dodoma, so not all of it is the concessionaire's doing. 2008 is the first full year of concession operation, not a demonstrated peak. The 1.5 million tons TRC carried in 2002, which the PAD also gives, is the public railway before the concession and is not used as the peak here.