As a result the Tazara board will cut planned expenditure by 50%, and now intends to spend $US 45.8m during the 2015-16 financial year. Nevertheless the board still anticipates Tazara to "make a net operating profit of $1.68m from projected revenue of $US 45.8m."
Tazara expects freight traffic to recover during the current financial year to reach 200,000 tonnes and forecasts passenger traffic at 1.98 million journeys in 2015-16.
The board has instructed the Tazara management to achieve these numbers by preparing a bankable business plan, re-training staff to improve performance, launching a new marketing campaign, and to consider the possibility of inviting the private sector to invest and manage the Dar es Salaam commuter train service, which is currently very popular but makes a loss.
The governments of Tanzania and Zambia have issued Tazara with an edict to become financially self-sufficient. In a statement, Tazara said: "Both governments find it difficult to justify the continuation of any subventions to Tazara, which is otherwise a potentially viable company, and insist that the Authority must stand on its own going forward."