NRZ identifies partner
NATIONAL Railways of Zimbabwe (NRZ) has identified an investor to recapitalise the parastatal following the completion of the adjudication process last week where six companies submitted their bids to partner Government in revitalising the company.
NRZ infrastructure, which includes the rail and locomotives, had deteriorated in the last two decades.
The situation was worsened by a slump in economic activity that translated to low volumes for the rail transporter.
From moving over 12 million tonnes at its peak in 1998, the parastatal in 2016 transported less than three million tonnes. Due to the reduction in volumes and failure by the shareholder to inject new capital, the parastatal struggled financially. It is failing to pay its workers. NRZ is also reeling under a $140 million debt. It requires about $400 million to revamp its operations and has since flighted a tender looking for a partner to recapitalise.
Twenty firms expressed interest but only six bids were unveiled last week.
Of the six, only three appeared to have met the tender requirements.
The three are a Swiss firm, Crowe Horwath Chartered Accountants, which said it could secure $2,5 billion funding. A local firm Croyeaux Private Limited proposed to inject $700 million.
South Africa’s Transnet partnered with a local firm Diaspora Infrastructure Development Group, submitted a $400 million tender.
China’s Sino-Hydro only submitted what was referred to as a “regret” while China Civil Engineering asked for a late submission.
The sixth firm, SMH Rail of Malaysia, said it could re-manufacture some of the infrastructure and submitted a tender with a funding proposal of about $101 million.
In an interview, NRZ board chairman Mr Larry Mavhima, said the adjudication process was done last week on Friday. He said a successful partner was identified and details were forwarded to the Ministry of Transport and Infrastructural Development.
“As we speak right now our technical guys are busy with the adjudication process to determine who the best strategic fit is for National Railways of Zimbabwe. The one that meets both the technical and financial requirements needed to recapitalise NRZ and we hope that by the end of this week we would have a very clear position as to who exactly would have been identified.
There were six companies that submitted their bids for the recapitalisation. However, at the moment I really can’t say who exactly it is because I am not involved in the adjudication process,” he said.
Mr Mavhima said NRZ through Transport and Infrastructural Development Ministry, approached Cabinet seeking a special dispensation where it would ring-fence certain products particularly minerals to be transported by rail.
“What we did is we went to Cabinet through the Ministry of Transport and Infrastructural Development and requested for a special dispensation where we would ring-fence certain products to remove them from road back to rail. We hope that it will assist in the maintenance of our roads and also increase business and revenue for the railways.
We were basically looking at mineral products that were being transported by road and any other heavy material,” he said.
Most mining companies have resorted to haulage trucks to transport minerals and other heavy materials further damaging roads.