NRZ targets 14m ton freight. . . Recapitalisation to inject life into railway firm
Mr Nyasha Maravanyika Oliver Kazunga, Senior Business Reporter
THE National Railways of Zimbabwe (NRZ) is targeting to move 14 million tonnes of freight per year once it secures funding for recapitalisation. Last week the firm held a pre-bid conference for potential investors in Bulawayo where Government made a commitment to grant national project status to the recapitalisation of parastatal to the tune of £400 million through an open market tender system.
The pre-bid conference was aimed at discussing modalities of implementing the recapitalisation initiative. The tender has attracted more than 80 private bidders locally as well as those from countries such as South Africa, Malaysia, Dubai, India, China, United Kingdom and Belgium. NRZ public relations manager Mr Nyasha Maravanyika said the recapitalisation of the railway company would restore its former glory.
“As reported by our transaction advisor (Deloitte & Touche), NRZ is currently moving three million tonnes of freight per year but with the recapitalisation, capacity would increase to 14 million tonnes of freight per year,” he said. At its peak in 1998, NRZ moved 18 million tonnes of cargo. “The transaction advisor during the pre-bid conference gave hope to the potential investors that they can get their mileage in terms of profit margins once NRZ is recapitalised,” he added.
Asked about how the proposed recapitalisation deal would ensure a win-win situation between NRZ and its partners, Mr Maravanyika said: “That can only be discussed after proposals from potential investors have been looked at.
What has been made clear so far is that NRZ is looking for a serious investor to facilitate the turnaround programme. “Presently, we are looking for a strategic partner or investors that can come together and partner us as a consortium.” Through the support from Government, Mr Maravanyika said NRZ was assured of a speedy turnaround.
Over the past 20 years, the strategic entity has not been adequately capitalised resulting in deterioration of equipment and infrastructure and subsequent losses that have negatively impacted on NRZ efficiency and effectiveness. The Government has granted NRZ recapitalisation project incentives such as national project status, warehousing of part of the parastatal’s debt, conditional ring fencing of bulk freight cargo to rail and sovereign guarantees for any loan provided. In April, Cabinet approved the engagement of Deloitte & Touche and the adoption of the formal tender process to raise £400 million recapitalisation package from the open market.
The recapitalisation initiative involves the rehabilitation and renewal of plant, equipment, rolling stock, track signalling and telecommunications infrastructure and the supporting information technology (IT) systems.