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DAR ES SALAAM (Reuters) - China plans to lend Tanzania $39 million to help it revamp a railway jointly owned with Zambia, Tanzania's infrastructure development minister said.
China helped build the 39-year old Tanzania-Zambia (Tazara) railway line, which later played a big role in the liberation struggle for independence in southern Africa.
"A soft loan agreement of about $39.3 million from the government of ... China will be signed during the 2009/10 fiscal year," Shukuru Kawambwa said in a speech to parliament seen by Reuters on Thursday.
"This loan will be used to improve the company's engines, wagons and rollers and develop workers' skills."
Kawambwa said China had also agreed to continue offering tools and technical help to Tazara.
Tazara has for years suffered poor management, lack of wagons and locomotives, unreliable timetables and problems with track maintenance.
At its peak, the 1,992 km (1,162 mile) railway could transport about 2.5 million tonnes of cargo a year, but it currently moves only about a quarter of that.
Earlier this year, Tanzania and Zambia said they planned to concession it. Past efforts to privatise it have flopped.
"Discussions with various financial institutions and investors into concessioning Tazara to improve its services are still going on," Kawambwa said.