NRZ revamping key for economy

HARARE - After decades of decline, government has drawn up plans to invest in the country’s stuttering rail company, the National Railways of Zimbabwe (NRZ).

NRZ is woven into the country’s national fabric. Carrying passengers across the country’s interior, and exporting agricultural produce can help Zimbabwe regain its place in the sun.

After a period of rapid expansion, the network peaked in the 80s, but political instability and economic crisis triggered a decline from which the railways never really recovered. After decades of underinvestment and decay, government is implementing a sweeping turnaround programme. International finance will play a vital role in realising this bold vision.

Following Cabinet approval for the NRZ to float its tender to raise funds for recapitalisation, the request for proposals was gazetted on May 5, and subsequently appeared in the local press. Advertisements were placed in the press in South Africa and an international newspaper in the United Kingdom.

Direct communication was sent to Zimbabwean embassies in Russia and China. Various other companies that had expressed interest in the recapitalisation were also invited to bid, according to deputy Transport minister Michael Madanha.

A compulsory pre-bid conference was held on May 30 in Bulawayo, which was attended by 82 potential bidders.

The tender is due to close today, after which adjudication will take place, with a target of submission of recommendations to the ministry by the board on August 1.

If this sails through, it could stem the decline on much of the network. With chronic shortages of serviceable locomotives and wagons, and declining reliability, many customers have abandoned the railway.

With the backing of foreign funds, government can begin the modernisation of infrastructure and rolling stock on the network.

The NRZ has also been sourcing for finance from local banks to repair locomotives and wagons as an interim measure to improve capacity and business volumes, according to Madanha. 

To date, the NRZ has secured a loan of $5 million from a local financial institution, which will be used to repair five locomotives and 200 wagons.  The requisite approvals from the board and government are being processed. In the meantime, the organisation has so far this year overhauled 165 wagons using its own resources.

The NRZ has also been involved in negotiations with a Russian wagon manufacturer, Uniwagon, for the supply of 100 new wagons through a $10 million facility from the Russian Exim Bank.

The NRZ has also engaged a consultant to assist in right-sizing the NRZ following its failure to meet its wage requirements.

It is good that the government is aiming to achieve a “complete recovery” of the freight network.

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