NRZ recapitalisation, a pipe dream?

The much-awaited recapitalisation of the National Railways of Zimbabwe (NRZ) is set to drag further, with the government yet to retender the project following the cancellation last month, of the US$400 million deal signed with a South African firm, two years ago.

In cancelling the contract with Diaspora Infrastructure Development Group (DIDG)-Transnet the government cited failure by the former to provide proof of funding and to comply with contractual timelines.

The cancellation, however, came after DIDG had as part of the deal, delivered 13 locomotives, 200 wagons and six passenger coaches on a lease arrangement.

Notwithstanding that, Cabinet on Tuesday ordered the retendering of the project.

The recapitalisation of NRZ remains key in the resuscitation of the country’s economy which contracted by -6, 5 percent this year but projected to grow by only three percent next year.

A vibrant railway system is pivotal in the transportation of minerals from the mines and agricultural produce to ports such as Beira.

The fresh tender, according to the Transport and Infrastructural Development Minister, Joel Biggie Matiza, would be flighted in a few days time.

“We are going to retender the project as directed by Cabinet,” he said.

“Processes are already underway to ensure that we flight another tender. By next week, I will have full details on how much ground has been covered in this regard.”

Zimbabwe National Chamber of Commerce (ZNCC) vice president, responsible for the Matabeleland region, Golden Muoni, said it was regrettable that the recapitalisation of NRZ had taken long, while the economy continued to suffer.

“You cannot run an economy without a proper transport system of which NRZ is part,” he told CITE.

Muoni said a result of desperation for investment; Zimbabwe was being taken advantage of by prospective investors resulting in inconclusive deals being signed such as the NRZ-DIDG-Transnet pact.

“We are at crossroads as a country and because of that our deals are not properly structured and as a result investors come and just get away with murder,” he said.

“There was no way that deal was going to fall away if it was properly structured.”

Economist in the Department of Banking and Investment Promotion at the National University of Science and Technology, Stevenson Dlamini, said to speed up the recapitalisation of the parastatal, the government needed to do away with red tape while improving on corporate governance.

Meanwhile, NRZ last month signed the new deal with Union Wagons of Russia for the supply of wagons and locomotives while Indonesia has also expressed strong interest to invest in the same sector.

Under the Russian deal, NRZ is expecting to boost its capacity utilisation through the supply of 5 000 wagons.

The first 100 wagons are expected in January next year at a cost of US$10 million.

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