Transnet gets NRZ $400m ten­der

Gov­ern­ment awards ten­der for re­cap­i­tal­i­sa­tion

The Star Early Edition - - LETTERS - Tawanda Karombo

TRANSNET has landed the $400 mil­lion (R5.37 bil­lion) re­cap­i­tal­i­sa­tion ten­der for the Na­tional Rail­ways of Zim­babwe (NRZ) af­ter a suc­cess­ful bid last month, and it is now ex­pected that the group will help breathe fresh ca­pac­ity into the ail­ing Zim­bab­wean rails paras­tatal.

The Di­as­pora In­fra­struc­ture De­vel­op­ment Group (DIDG) – made up of Zim­bab­wean in­vestors and tech­ni­cal ex­perts based out­side the coun­try – part­nered Transnet for the bid to re­cap­i­talise the NRZ.

Transnet and the DIDG sub­mit­ted bid doc­u­ments for the ten­der process on July 4 and had sub­se­quently been short­listed along­side two other com­pa­nies.

The State Pro­cure­ment Board han­dled the bid­ding process with the as­sis­tance of Deloitte.

The board of NRZ and Zim­bab­wean Trans­port Min­is­ter, Jo­ram Gumbo, have con­firmed the win­ner from the ten­der process, high­light­ing that the NRZ has now been given the lee­way to en­gage them for fur­ther dis­cus­sion” and to start “hav­ing dis­cus­sions on con­tract is­sues” in the next few weeks.

“I can con­firm that we have re­ceived cor­re­spon­dence from SPB (State Pro­cure­ment Board) that the Di­as­pora In­fra­struc­ture De­vel­op­ment Group, in part­ner­ship with Transnet, has won the ten­der to re­cap­i­talise NRZ,” Larry Mavhima, the chair­per­son of the NRZ said yes­ter­day.

Transnet is now ex­pected to help NRZ raise its freight ca­pac­ity and en­hance its ship­ment vol­umes for this year and the fol­low­ing pe­ri­ods.

NRZ has ear­marked to move 3.7 mil­lion tons of cargo this year af­ter its ca­pac­ity sagged to 3 mil­lion tons last year.

It will also have to set­tle debts that NRZ has notched up at a time when the rail­ways com­pany is seek­ing to re­place or up­grade its fleet and equip­ment.

Of­fi­cials also say the NRZ has in the mean­time se­cured $5m for re­fur­bish­ment and re­pairs to its ex­ist­ing in­fra­struc­ture that in­clude wag­ons and lo­co­mo­tives

The $5m has been se­cured from a lo­cal fi­nance in­sti­tu­tion, ac­cord­ing to Zim­babwe Deputy Trans­port and In­fra­struc­ture Min­is­ter, Michael Madanha.

The paras­tatal is also en­gag­ing Rus­sian part­ners for fi­nanc­ing to buy new lo­co­mo­tives and wag­ons in the short term.

“The win­ning bid­der has to help with turn­ing around NRZ and will essen­tially be a joint ven­ture part­ner. It is good news for NRZ and this will help us have tech­ni­cal as­sis­tance and en­hance our ca­pa­bil­i­ties and ca­pac­ity,” said Mav­ima.

Ac­cord­ing to in­formed sources, the im­me­di­ate debt that the win­ning bid­der will have to set­tle is about $140m.

The NRZ is viewed as a vi­tal and po­ten­tially lu­cra­tive op­er­a­tion, given its ex­ten­sive rail net­work, stretch­ing over 2 760 route kilo­me­tres of 1 067mm gauge track, with links to South Africa, Mozam­bique, Zam­bia and Botswana.

Ac­cord­ing to au­di­tor-gen­eral Mil­dred Chiri’s re­port, NRZ had a net cur­rent li­a­bil­ity po­si­tion of $219m, while it also suf­fered a $59.7m loss in 2016.

This brings its cu­mu­la­tive loss for the end of De­cem­ber 2016 sea­son to $336.2m.

“This cu­mu­la­tive loss and net cur­rent li­a­bil­ity po­si­tion, along with other mat­ters in­di­cate the ex­is­tence of a ma­te­rial un­cer­tainty that may cast sig­nif­i­cant doubt over the NRZ’s abil­ity to con­tinue as a go­ing con­cern,” said Chiri.

Zim­babwe has dragged its feet on pri­vati­sa­tion of some key paras­tatals, al­though econ­o­mists ar­gue that com­mer­cial­i­sa­tion is the only way to lift the state cor­po­ra­tions out of loss mak­ing.

How­ever, the award­ing of the re­cap­i­tal­i­sa­tion ten­der for the NRZ to Transnet and the DIDG may sig­nal a shift as Pres­i­dent Robert Mu­gabe’s of­fice pushes the ease of do­ing busi­ness frame­works to at­tract wilt­ing in­vest­ments into the econ­omy.

The win­ning bid­der has to help with turn­ing around NRZ and will essen­tially be a joint­part­ner.

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