The Tanzania–Zambia Railway Authority (TAZARA) will receive a fixed concession fee of US$15 million per year from the China Civil Engineering Construction Corporation (CCECC), according to a disclosure made in the Zambian Parliament by the Ministry of Transport and Logistics.
TAZARA was concessioned to China Civil Engineering Construction Corporation at the end of 2025 after Zambia, Tanzania and China signed a 30-year concession agreement aimed at revitalising the Tanzania–Zambia Railway Authority.
Under the agreement, TAZARA is expected to declare and pay dividends to the Zambian and Tanzanian governments. However, the ministry disclosed that the government will not receive any portion of the annual revenue generated by TAZARA.
TAZARA will receive the US$15 million per annum regardless of the concessionaire’s financial performance. The statement to the Zambian Parliament further noted that the concessionaire will also pay a variable fee equal to two per cent of gross freight revenues from the first year of operation until the end of the concession.
It added that TAZARA will only declare and pay dividends to the two shareholder governments after fully settling statutory and trade obligations, including pension arrears, taxes, levies and other liabilities, and once the company has attained profitability.
The ministry said Zambia and Tanzania will develop a dividend policy to ensure that dividend payments do not disadvantage TAZARA. As a corporate entity, TAZARA will begin receiving concession fees in the first year of commercial operations by the concessionaire.
CCECC will require a three-year period to rehabilitate infrastructure and procure new locomotives and wagons. During this time, TAZARA will not receive concession fees, as these will be reinvested to enhance operations. The minister also disclosed that passenger services have not been concessioned and will continue to be provided by TAZARA.
Under the terms of the agreement, China Civil Engineering Construction Corporation will invest over US$1.4 billion in TAZARA to revitalise the railway infrastructure and operations.
The Chinese firm is also expected to procure 32 brand-new locomotives and 762 new wagons, significantly increasing freight and passenger transport capacity.
By 2024, TAZARA was moving less than 300 tonnes of cargo, down from 1.2 million tonnes in 1986. This was due to broken-down locomotives, worn-out tracks, and the loss of market share to road transport.
Written for Railways Africa by Chamwe Kaira
