Zambian Business Times
TAZAMA turns a new corner, Pays first dividend to govt in 50yrs
The Tanzania Zambia Mafuta [ Tazama] Pipeline Limited has turned a new corner in its operations by paying K6million (about US$600k) to its majority shareholder, the Zambian government, a first in over 50years.
TAZAMA Board Chairperson Brigadier General Emeldah Chola announced during the presentation of the cheque to the Minister of Finance, Margaret Mwanakatwe that the company is undertaking three major projects.
She stated that these three projects total investment requirements is about US$2billion to improve the efficiency of the joint venture company between the governments of Zambia and East African Neighbour Tanzania.
The board chairperson said that Tazama is undertaking the pipeline expansion upgrading of 914 kilometres stretch of the pipeline from 8inch to 12inch at an estimated investment cost US$350million to improve the pipeline capacity to 1.5million metric tonnes per year.
The other project underway is the new pipeline for finished products at estimated cost of US$1.5 billion. This pipeline would provide additional supply of finished petroleum products to meet projected future demand of 4 million metric tonnes per annum.
Brigadier General Chola added that Tazama will also be installing an optic fibre for communication purposes to facilitate intelligent operations of the pipelines at the cost of US$98 million.
Tazama pipeline Limited has had a great run in 2017, posting earnings of K51million before tax in 2017 thereby enabling the energy transporting company to present a dividend valued at K9million to the two governments.
A dividend worth K3million will be presented to the government of Tanzania by Tazama management during the course of the year. Six K6million kwacha has been presented to the government of Zambia.
The company attributed the turnaround to sound management system put in place by the current Managing Director Davison Thawethe and his team together with prudent cost management. It is the first time Tazama in the 50 years of existence has declared a dividend to the two governments.
Government owned company’s in Zambia have come under heavy criticism for failure to turn profits in industries were they clearly have market advantages. Some of the companies receive preference to do government jobs, while others operate as monopolies or in oligopolistic markets and have no limited or no excuse to fail to post profits.