Govt expects NRZ to improve carrying capacity

DISCUSSIONS relating to capital raising for the resuscitation of the National Railways of Zimbabwe are at an advanced stage with Government expecting the national rail carrier to improve its carrying capacity in the short term.

The negotiations for finance for NRZ have been made a top priority given its centrality to Zimbabwe’s logistical map.

As such, a number of initiatives are being pursued including courting local and international financiers and corporates for joint venture partnerships or Public Private Partnerships, among other options.

Vice President Emmerson Mnangagwa told the business community during a tour of Bulawayo’s food processing sector players last week that the issue of the NRZ has been adopted as one of four priority areas for the revival of the economy, particularly in the northern region.

“We are looking at the National Railways of Zimbabwe to make sure we resuscitate the company. Our discussions are already very advanced,” said Vice President Mnan gagwa said.

The NRZ last year appointed Deloitte and Touche as transaction advisors to push its capital raising exercise both locally and offshore to secure about $400 million required for re-capitalisation.

The funds raised would be used towards boosting the rail company’s locomotives, wagons, track rehabilitation and signalling.

NRZ requires short-term recapitalisation to boost its carrying capacity which has declined to around 3,4 mil- lion tonnes in 2015 from a high of 9,4 million tonnes in 2000 mainly due to the use of antiquated logistics software, ageing fleet of locomotives, wagons and tracks.

Carrying capacity is expected to rise to about 7,6 million tonnes from the current 3,4 million tonnes if the parastatal succeeds in raising funds.

As part of the capital raising initiatives, the NRZ has since signed a deal estimated to run into several million dollars with the country’s sole producer of ammonium nitrate fertiliser, Sable Chemicals, for the refurbishment of locomotives and tank cars to increase pulling and ammonia carrying capacity.

The Memorandum of Understanding would pave way for a Private Public Partnerships, which the ammonium nitrate fertiliser producer hopes will help in the turnaround time for tank cars to ensure consistent supply of ammonia to its Kwekwe plant.

At the time of signing, NRZ general manager Eng Lewis Mukwada said the MoU with Sable would be necessary for the two companies to jointly approach financiers for funding to generate extra capacity to move Sable products.

This will cover tank wagons and locomotives.

With a rail network stretching 2 760 kilometres of 1 067mm gauge track, and wholly owned by Government, NRZ, is operating well below capacity due to operational challenges including liquidity constraints, obsolete systems and the general economic environment.

NRZ was established to provide, operate and maintain an efficient system of public transportation of goods and passengers by rail.