US$2bn can help in railway system revamp
In his inauguration speech earlier this month, President Mnangagwa emphasised the need to revamp and rehabilitate the country’s railway system, in line with aspirations to establish a prosperous and highly industrialised country by 2030. Our reporter DEBRA MATABVU (DM) sat down with the National Railways of Zimbabwe (NRZ) board chairperson, Advocate MARTIN DINHA (MD), who outlined his vision for the railway sector.
************
DM: Zimbabwe’s railway system has been singled out as the missing link in the country’s aspirations to become a regional trade hub. What is being done to ensure the system is modernised to acceptable standards?
MD: Indeed, railway is critical in any economic activity or development of a country.
This is because it is an economic enabler.
The transport system reduces the cost of production in industry for both primary and secondary producers.
It also facilitates the logistical transportation of raw materials.
In Zimbabwe, however, there has been a decline of the railway system for years now.
Since 1980, there was progression in the development of the system up to 1992.
There was even electrification of the stretch from Harare to Dabuka.
However, this stretch has now been decommissioned because of factors such as vandalism and lack of financial support from the major shareholder — the Government.
So, we are now the missing link in the regional railway system.
Because of our location, we should be a strategic facilitator of movement along the North-South corridor.
But because of the downgrading of the railway and lack of modernisation, Zimbabwe is indeed the missing link.
Mozambique, for instance, has made a lot of strides in modernising its railway.
They have a lot of rolling stock. By rolling stock, we mean wagons, locomotives and passenger trains.
They bought rolling stock that has revamped their railway system.
Zambia has injected close to US$1,9 billion into revamping its railway system; Tanzania has the Tazara route, where they have invested US$3,5 billion.
South Africa has Transnet. Zimbabwe, because of the economic sanctions that are attacking our economy, we have been lagging.
However, we are happy that, under the Second Republic, President Mnangagwa has prioritised railways, hence he mentioned the drive to modernise, revamp and rehabilitate the railway system in his inaugural speech.
We are happy, as the railway family, that the President is championing development of the railway system as he seeks to achieve Vision 2030.
What needs to be done?
We need no less than US$2 billion to revamp the country’s railway system.
Meanwhile, we have received an undertaking from the Government to provide funding to the tune of US$115 million.
We also have deals that we have negotiated . . . Remember, we have been shopping around, trying to attract investment.
We have approached several governments, including the Turkish and Indonesian governments.
We have approached the Indians . . . we have been all over, but the problem has been investors’ view of sanctions and bankability. Sanctions are real.
However, we are calling on our major shareholder — the Government — to come up with a solution so that it either guarantees loans or finds credit lines from Afreximbank, Russia and other international financiers.
We are approaching many actors because our needs and requirements will not be solved by one investor.
We used to have American locomotives and this caused us a lot of problems because, when sanctions were imposed, we could not get spare parts.
We have learnt from that experience that we should have many suppliers so that we have a guarantee of support service in the future. DM: Can you outline the other initiatives you have implemented in efforts to revive the fortunes of the NRZ?
MD: A lot of progress has been made over the last four or five years that I have been chairperson. We have restructured the management. We have made it thinner and leaner. Our organisation is top-heavy and we introduced a restructuring exercise that lasted for two or three years.
We are filling positions and have been able, under very difficult conditions, to develop the volume of business by 40 percent in four years.
The organisation is now able to pay workers’ salaries, which we had not been able to pay for the past 15 to 20 years.
We are now refurbishing the railway system; have bought new cars and lorries and are now restructuring the infrastructure. At the moment, our month-to-month performance shows that we are posting a profit. Of course, we have issues with legacy debts.
Our proposition was for the Government to take over those debts and allow us to start on a new slate so that, as a new board and new management, we are not saddled by millions of dollars in debt.
DM: NRZ has been engaging several investors over the last few years to unlock fresh funding. Can you outline the progress made in that regard?
MD: We have serious investors; many are interested in the region.
There are some that have already invested in Zambia; we have the Turkish; there are also Chinese investors; we have the Russians as well. Those three countries are eager to work with us.
At the moment, we are in serious engagements through higher offices.
We are pursuing Chinese, Turkish and Russian investors. Most of the high-level negotiations require government-to-government engagements.
The Government must guarantee whatever loans we get.
DM: The mining sector is on an unprecedented growth trajectory, which requires a robust railway system. What are you doing to ensure you support this growth through the provision of an efficient railway system? MD: This is one area we need to look at. Recently, we engaged the Ministry of Mines and Mining Development on this issue and we will continue to engage them.
NRZ wants to set up a working group to facilitate engagements between us and mining companies across the country.
The missing link for the movement of coal and other products in the mining industry is rail. Copper and chrome are moving by road, and this damages our roads.
Although there has been massive investment in road rehabilitation, we are doing a disservice to the country.
Heavy equipment and machinery are being transported on the roads. So, we have been engaging with new mining companies such as Dinson to look at the development of a new line from Manhize to Beira.
We have other mining companies, such as Bikita Lithium Mining, which we are engaging.
NRZ is currently working towards public-private partnerships (PPPs) with some mining companies.
Some chrome mining companies are hiring wagons from South Africa and we want them to hire from NRZ.
DM: Tell us about NRZ’s PPP initiative, where you are engaging companies in the mining sector that are refurbishing some of your rolling stock.
MD: We have engaged mining companies and some have been amenable.
A lot of support is coming from as far as the Democratic Republic of Congo (DRC). We have engaged companies in the DRC to revamp and refurbish our wagons.
However, I must pay tribute to CFM (Portos e Caminhos de Ferro de Moçambique) railway company of Mozambique. They have come out to assist us. They have refurbished the Chimoio-Chipanda railway line at their cost.
Once in a while, they also give us locomotives to enable us to move seamlessly.
Our neighbouring countries are assisting so well. However, at the end of the day, we need a solution to the revamping of the railway system, as alluded to by President Mnangagwa.
DM: Commuters in many urban centres have been facing transport challenges over the last few weeks. Are there plans to reintroduce commuter trains?
MD: This is a service we discontinued after Covid-19, and we need to relook at passenger rail. We cannot develop any economy without the vibrant and seamless movement of people.
People need to move for social and economic reasons, so we need intra- and intercity travel.
We discontinued the passenger train because it was becoming a cost to us.
In terms of commuter trains, Harare, in particular, is where the major problem is.
We have a very good network in Harare that joins high-density suburbs.
Major investment in the short term will be around Harare and Chitungwiza, especially the much-talked-about Harare-Chitungwiza railway that must come into being.
We want to address the transport crisis in the country and are looking for investors for the light railway in Harare.
There was also talk of a tram system in Harare. However, it is quite costly to introduce a tram system given the traffic congestion.
We, however, need to look at all the systems.