NRZ, investor finalise contract negotiations

Mr Larry Mavima

Mr Larry Mavima

Oliver Kazunga, Senior Business Reporter
THE National Railways of Zimbabwe (NRZ) will this week meet its new investor, Diaspora Infrastructure Development Group (DIDG)/Transnet that has won the parastatal’s $400 million recapitalisation tender to finalise contractual obligations.

In the recapitalisation project, Transnet, a South African logistics company, has partnered DIDG, a consortium of non-resident Zimbabweans who are mainly resident in that country.

In an interview last week, NRZ board chairman Mr Larry Mavima said:

“We’ve written to Transnet/DIDG for a meeting next week (this week) to polish up on the contract negotiations.”

Part of the Transnet/DIDG consortium’s proposal entails the creation of a separate joint venture entity with NRZ and Transnet among others is expected to provide technical expertise including its regional footprint and strategic assets.

“The contract negotiations will look at the roll out programme focusing on issues such as when the rehabilitation programme will start and what we are going to start with as we implement NRZ rehabilitation programme,” said Mr Mavima.

The NRZ rehabilitation programme involves renewal of plant and equipment, rolling stock, track signalling and telecommunications infrastructure as well as the supporting information technology systems.

It is hoped that once the project’s financial closure is reached, implementation of the turnaround programme will begin before the end of the year.

The NRZ tendering process, which was open for two months, closed on July 4 with five other bidders having been shortlisted for the parastatal’s recapitalisation tender.

These were China Civil Engineering, Crowe Horwath & Welsha, Sino Hydro, SHM Railway of Malaysia and Croyeaux Limited of Zimbabwe.

Transnet-DIDG’s bid price was $400 million, which amount NRZ was looking for.

Mr Mavima is on record saying as the parastatal implements a turnaround strategy, they would consider the staffing levels looking at the impact of the capital injection at NRZ and see how best a balance can be struck.

About 4 000 people are presently employed by NRZ compared to 20 000 at its peak in 1999.

The parastatal, which needs about $1.9 billion in the long-term is saddled with a $144 million legacy debt.

Among a list of NRZ creditors, are its workers who are owed $90 million in outstanding salaries.

The NRZ board and management has been urged to prioritise the resuscitation of the railways company which has aging infrastructure and obsolete equipment as opposed to clearing the salaries backlog.

Towards the end of last year, the Government commissioned 31 state-of-the-art wagons from China Railway Rolling Stock Company under a $2,9 million deal meant to boost NRZ operational capacity.


Article Source: The Chronicle