CZI seeks ways to boost NRZ capacity
THE Confederation of Zimbabwe Industries is looking at ways of mobilizing funding from its members to help the National Railways of Zimbabwe repair its wagons to boost capacity to transport bulk cargo for industry at affordable cost.
THE NRZ last year appointed Deloitte and Touche as transaction advisors as it sought to raise capital amounting to $400 million to discharge its debts and recapitalise. The fresh funding is needed to refurbish the rail company's locomotives, wagons, rehabilitate track and restore signalling.
CZI president Busisa Moyo said the industrial lobby group was looking at the requirements of its members in terms of cheaper means of bulk transportation of raw materials and other cargo in order to mobilise the funding to capacitate NRZ.
He however said CZI would only consider helping NRZ create more capacity to move bulk cargo if this would make industry more competitive by way of lowering cost of transportation.
Mr Moyo said that there was not much difference in terms of the cost of road and rail transport at the moment.
“As you know, NRZ moved 2,7 million tonnes of cargo last year. We want to see if we can add another 2 million tonnes, but NRZ has to be about 15 percent cheaper than road.
At the movement, the cost of rail is same as road or even higher in some cases. If it can make industry more competitive, then we are willing to talk to our members,” he said.
The CZI president said that industry capacity averaged 50 percent, adding that if lowering the cost of bulk transportation could help raise capacity to 60 percent, NRZ would be able to generate significantly higher volumes of business needed to drive its turnaround as well as attain viability.
According to CZI spokesman Kuda Matare, the industry lobby group would aggregate the efforts and resources of its members to help the national rail carrier to repair broken down wagons than have members do it individually to meet their needs for affordable and efficient means of bulk transport.
“We are looking at a situation where companies come together and pool their financial resources to repair NRZ's wagons as opposed to companies doing it individually for the wagons they require to move their goods,” Mr Matare said.
Government is pursuing initiatives to capacitate cash strapped and debt trapped national rail carrier including courting financiers and investors for joint venture partnerships or Public Private Partnerships, among other options.
Revamping NRZ has been designated as one of the key enablers, which need to be capacitated to perform at optimum capacity to lower the cost of bulk transportation of goods, achieve efficiencies and move bulky cargo in good time.
NRZ requires short-term funding to boost its carrying capacity, which has plummeted to about 3,4 million tonnes from 9,4 million tonnes in 2000 due to the antiquated infrastructure, ageing fleet of locomotives, wagons and tracks.
The State owned rail carrier has also suffered from the economic decline, which has resulted in significant decrease in the amount of bulk cargo available for transportation, including its biggest orders of coal from Zesa Holdings.