Zambia Railways Limited (ZRL) is facing a major crisis in its recapitalization and modernization project, which was aimed at rehabilitating and modernizing the country’s railway infrastructure.
The project was expected to improve the efficiency and safety of the railway network, reduce transit times and costs, and increase revenue for the company.
However, the project has been marred by safety concerns, financial mismanagement, and delayed deliveries, resulting in increased transit times, reduced freight volumes, and financial losses.
One of the major issues affecting the project is the poor state of the railway infrastructure, including the tracks, bridges, culverts, and drainages.
A review of the 2022 Safety Report by the auditor General’s office, revealed that the number of safety occurrences reported during the period under review increased to 696 from 642 occurrences in 2021, with 537 attributed to track failure. As a result, sections of the rail were placed on a temporal speed limit of 15 km/hr from an average speed of 50 km/hr, resulting in increased transit time for passengers and cargo. This resulted in increased transit time for passengers and cargo from an estimated 36 hours to an estimated 72 hours for a distance from Victoria Falls in Livingstone to Chililabombwe.
As a result of the increased transit time for passengers and cargo, ZRL failed to haul the planned 2,147,681 tonnes of freight for which revenue amounting to K780,861,229 was expected to be generated. Instead, ZRL hauled 1,612,486 tonnes which generated revenue of K389,506,100 resulting in a negative variance of 535,195 tons worth K391,355,129.
Another issue affecting ZRL is the failed delivery of fifty (50) wagons from Transnet – Freight rail -TFR, which was meant to compensate for the fifty (50) wagons that were either lost or damaged beyond repair on TFR lines in South Africa. However, as of 30th September 2023, the wagons had not been received, causing further delays and disruptions to ZRL’s operations.
According to the Auditor General report on the accounts of parastatal bodies and other statutory institutions for the financial year ended 31st December 2022, the recapitalization and modernization project has also been plagued by financial mismanagement. ZRL entered into a contract with Team Sweden Railways (TSR), a consortium comprising Yapiray and Yapi Merkezi companies established and existing in Turkey, for the rehabilitation and modernization of Zambia Railways Limited (ZRL) at a contract sum of €978,093,639 VAT exclusive. However, the company failed to secure financing for Phase 1 before the contract award, casting doubts on its ability to service the remaining 75% of the contract sum of €12,179,723 within the contract period of 6 months from the commencement date.
The delayed settlement of certified interim payment certificates resulted in the suspension of works by the contractor, with project completion being at 84% as of 31st August 2023.
The delay in completing Phase 1 has failed to execute Phase 2, which includes the rehabilitation of 1,029 km of the railway line from Livingstone to Sakania Border (including Chingola, Chililabombwe, and Mufulira branch lines) and the procurement of 500 locomotives and 1500 wagons.
