China's CCECC Commits US\$1.4 Billion to Revive the Famous TAZARA Railway

A landmark deal to breathe new life into one of Africa's most important railway lines is now taking shape, and the financial details are becoming clearer. The Tanzania–Zambia Railway Authority, commonly known as TAZARA, will receive a guaranteed payment of US\$15 million every year from its new operator, the China Civil Engineering Construction Corporation (CCECC). This fixed fee will be paid regardless of whether the Chinese firm meets or exceeds its business targets, offering TAZARA a stable and predictable income stream.

The details were shared with the Zambian Parliament by the country's Minister of Transport and Logistics, Frank Tayali, who explained the terms of the concession agreement that was signed at the end of 2025. The agreement, which runs for approximately 30 years, was reached after both the Zambian and Tanzanian governments concluded that they could no longer shoulder the financial weight of the railway on their own. A private-sector-led approach was seen as the only realistic path forward.

One point that drew attention during the parliamentary session was the minister's disclosure that the Zambian government will not receive any share of TAZARA's annual revenue. Instead, TAZARA itself will collect the concession fees and use them to settle outstanding obligations. These include pension arrears, unpaid taxes, levies, and other debts that have built up over many years of financial difficulty. Only after all these liabilities are fully cleared and the company becomes profitable will TAZARA be in a position to declare dividends to its two shareholder governments, Zambia and Tanzania.

Beyond the fixed annual fee, CCECC will also pay a variable fee equal to two per cent of gross freight revenues starting from the very first year of commercial operations. This means that as cargo volumes grow, TAZARA's income will also increase. Both governments have committed to developing a fair dividend policy that ensures any future payouts do not weaken the railway's financial health.

However, travel professionals and logistics operators should note that this revenue will not flow immediately. The agreement includes a three-year rehabilitation period during which CCECC will focus on repairing infrastructure and acquiring new rolling stock. During these initial years, no concession fees will be paid to TAZARA, as funds will be reinvested directly into upgrading the system.

The scale of investment is enormous. CCECC has pledged more than US\$1.4 billion to completely overhaul the railway. A large portion of this budget will go towards rebuilding worn-out tracks, while approximately US\$400 million has been earmarked for the purchase of 32 brand-new locomotives and 762 new wagons. This fresh equipment will dramatically increase the line's ability to move both freight and passengers across the region.

The need for this investment is urgent. By 2024, TAZARA was transporting less than 300 tonnes of cargo, a dramatic collapse from the 1.2 million tonnes it handled at its peak in 1986. Broken locomotives, deteriorating tracks, and fierce competition from road transport had reduced the once-proud railway to a shadow of its former self. The route also holds growing geoeconomic importance, offering a potential alternative corridor for copper and cobalt exports that currently face logistics bottlenecks through southern Africa.

An important detail for those in the passenger travel business is that passenger services have not been included in the concession. These will continue to be managed and provided directly by TAZARA. This means the railway authority retains control over ticketing, scheduling, and service standards for travellers using the line between Tanzania and Zambia.

For African travel trade professionals, this revival represents far more than a railway upgrade. It is a signal that cross-border rail connectivity in East and Southern Africa is being taken seriously again. As the rehabilitation progresses, new opportunities for tourism packages, cargo partnerships, and regional trade routes are likely to emerge. The TAZARA corridor, which links the port city of Dar es Salaam to Zambia's heartland, could once again become a vital artery for both commerce and travel, reshaping how people and goods move across this part of the continent.