A US$1,4 bil­lion game changer:

The Sunday Mail (Zimbabwe) - - FRONT PAGE - Africa Moyo

GOV­ERN­MENT says the seal­ing of two mega in­vest­ment deals by the Na­tional Rail­ways of Zim­babwe and Zis­cos­teel will have a far-reach­ing im­pact on the broader na­tional econ­omy.

The deals have a com­bined value of US$1,4 bil­lion.

Cab­i­net re­cently ap­proved a US$400 mil­lion in­vest­ment pro­posal by a con­sor­tium led by the Di­as­pora In­fras­truc­ture Devel­op­ment Group (DIDG) and South Africa’s Transnet.

The deal had ear­lier hit tur­bu­lence af­ter dis­agree­ments in Cab­i­net, but on October 16 the ex­ec­u­tive gave their nod.

At the same time, talks are un­der­way to re­sus­ci­tate Zisco, a key steel gi­ant in Africa.

Gov­ern­ment has said a US$1 bil­lion deal — which could rise to US$2 bil­lion — has been penned with Chi­nese in­vestor, R&F Prop­er­ties.

NRZ and Zisco are at the heart of Zim­bab­wean in­dus­try, and when they sneeze the en­tire econ­omy catches a cold.

Trans­port and In­fras­truc­ture Devel­op­ment Min­is­ter Dr Jo­ram Gumbo told The Sun­day Mail Busi­ness last week that the NRZ deal was a game-changer.

“We have al­ready started en­gag­ing (the in­vestor). Ne­go­ti­a­tions have started with speed,” said Dr Gumbo.

Asked when the en­gage­ments would be con­cluded, Dr Gumbo said: “When Cab­i­net gives the ap­proval to ne­go­ti­ate — as has been done — there are other pro­cesses that have to be fol­lowed.

“This in­cludes get­ting the tech­ni­cal peo­ple on our side — who in­clude of­fi­cials from the Min­istry of Trans­port, the NRZ it­self, Min­istry of Finance, the At­tor­ney-Gen­eral’s Of­fice and the IDBZ (In­fras­truc­ture Devel­op­ment Bank of Zim­babwe), among oth­ers — to start talk­ing to the in­vestor.

“We need all those peo­ple to be part of the en­gage­ments so that we don’t sign a deal that will see us lit­er­ally sell­ing the coun­try.

“Af­ter the en­gage­ments, we then go back to Cab­i­net to tell them what would have been agreed and Cab­i­net will then review the agree­ment to see if it is a good deal.”

Dr Gumbo un­veiled an NRZ board last Thurs­day, which was man­dated with ex­pe­dit­ing the ne­go­ti­a­tions with DIDG/ Transnet.

NRZ board chair Mr Larry Mavhima was re­tained at the helm of the key paras­tatal.

Founded in 1897 as the Rhode­sia Rail­ways, the NRZ’s motto is “We move the na­tion”.

The ex­pec­ta­tion is for NRZ to carry the econ­omy on its shoul­ders; criss­cross­ing the coun­try with var­i­ous prod­ucts and raw ma­te­ri­als for the man­u­fac­tur­ing, min­ing and agri­cul­ture sec­tors at fairly rea­son­able prices.

Mov­ing goods by rail is 40 per­cent cheaper than by road, and this en­sures lower prices through the value chain.

Said Dr Gumbo: “The NRZ is a very key en­abler for the min­ing and agri­cul­ture sec­tors. The re­sus­ci­ta­tion of Zisco and Lan­cashire, as al­ready been said by the Min­is­ter of In­dus­try and Com­merce (Dr Mike Bimha), will also ben­e­fit from the re­vival of NRZ.

“Hwange Col­liery is also go­ing to ben­e­fit from NRZ’s re­sus­ci­ta­tion. You see, us­ing the NRZ to move goods is way cheaper than other modes of trans­port. This means even farm­ers would start us­ing NRZ to move their fer­tilis­ers and seed to the farms.”

He went on: “The com­ing on board of NRZ will also help save our roads be­cause heavy loads would be car­ried by rail and not road as is the case at the mo­ment.

“Goods from other coun­tries will also be car­ried by rail. This means our roads will have a longer life, so when you look at it, it (re­vival of NRZ) is some­thing that is wel­come,” he said.

In­dus­try Min­is­ter Dr Bimha is also ex­cited about the prospects of a re­vived Zisco.

Dr Bimha told the re­cent sixth edition of the ZimTrade An­nual Ex­porters’ Con­fer­ence that man­u­fac­tur­ing and ser­vices were con­tribut­ing less than 10 per­cent of ex­ports, and the re­turn of Zisco would push up this fig­ure.

Apart from ramp­ing up ex­ports, the Zisco deal will help Zim­babwe save for­eign cur­rency as the coun­try presently spends US$350 mil­lion yearly on im­por­ta­tion of steel and re­lated prod­ucts.


Gov­ern­ment ex­pects that if the NRZ deal goes through as pack­aged by in­vestors, cur­rent and for­mer em­ploy­ees will be the first ben­e­fi­cia­ries as roy­al­ties will cover wages and salary ar­rears.

Em­ploy­ees are owed nearly US$100 mil­lion.

At its peak in the late ‘80s, the NRZ had 20 000 em­ploy­ees but the num­bers came down to 12 000 in the ‘90s be­fore fur­ther slump­ing to the cur­rent 5 700.

Dr Gumbo said: “If this deal sails through, there will be roy­al­ties to pay work­ers who left jobs and oth­ers who were not be­ing paid their full salaries.”

DIDG/Transnet has pledged to de­liver 480 wag­ons and 14 lo­co­mo­tives “im­me­di­ately af­ter the sign­ing of the mem­o­ran­dum of un­der­stand­ing.

“We are also go­ing to have fast trains that will carry peo­ple, mainly tourists from Harare to Vic­to­ria Falls,” said Dr Gumbo. Speed trains will re­duce the cost of the lo­cal tourism prod­ucts. Tourists say it is ex­pen­sive to travel from Harare to Vic­to­ria Falls by air.

Air Zim­babwe charges about US$280 for a re­turn ticket to Vic­to­ria Falls while Fast­jet costs about US$160 — and this ex­cludes de­par­ture taxes.

The deal to re­vive NRZ is set to turn­around the coun­try’s econ­omy

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