COMMENT: Urgent need to revive NRZ

The Chronicle

GOVERNMENT has pledged ZW$2 billion to fund refurbishment and rehabilitation of the National Railways of Zimbabwe equipment and infrastructure.

The Minister of State for Presidential Affairs and Monitoring Implementation of Government Programmes Dr Joram Gumbo announced the Government’s pledge when he visited the NRZ on Thursday.

Dr Gumbo said Government was committed to funding the re-equipping and recapitalisation of the NRZ as industry requires a robust and efficient railway transport system to move raw materials and finished products.

The NRZ needs about US$400 million to fully recapitalise operations in the short-term and about US$1,9 billion in the long-term.

In 2017 NRZ signed a US$420 million recapitalisation deal with the Diaspora Infrastructure Development Group (DIDG) and Transnet of South Africa.

The deal was however, cancelled by Cabinet in 2019 after the investors failed to provide proof of funding.
The move by Cabinet came as a great shock to industrialists and other stakeholders who had pinned their hopes on the revival of the NRZ to address their transport challenges.

The DIDG-Transnet failed to meet contractual timelines two years after winning the tender. After the expiry of the deadline to provide proof of funding, Government gave the consortium a six-month grace period which again lapsed leaving Government with no option but to cancel the deal.

Instead of waiting for investors to come on board, the NRZ is using its limited resources to fund refurbishment of equipment such as locomotives and wagons as well as rehabilitating the railway infrastructure.

The decision by Government to avail ZW$2 billion is therefore commendable.
The NRZ announced late last year that it had cleared a nine-year salary backlog and was now meeting its operating expenses.

The NRZ management attributed this positive development to the restructuring exercise that it implemented.
It said the company’s turnaround strategy was impacting positively on the business hence it was improving on its revenues.

Now that the NRZ is being run efficiently as evidenced by its ability to clear its salary arrears and meeting its operating expenses, it should be able to attract investors to provide the required funding for its recapitalisation.

National Railways of Zimbabwe train (File picture)

Companies are paying prohibitive transport costs for raw materials and finished products because they are using road transport instead of NRZ.

Rail is the cheapest mode of transport hence the urgent need to revive the NRZ to enable it to move the bulk of industry’s raw materials and finished products within the country or across the country’s borders.

Article Source: The Chronicle

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