$400m NRZ deal gets Cabinet nod

Minister Gumbo

Minister Gumbo

Darlington Musarurwa Deputy News Editor—
THE National Railways of Zimbabwe (NRZ)’s $400 million deal with a consortium led by the Diaspora Infrastructure Development Group (DIDG) and South Africa’s Transnet is now back on the rails after Cabinet gave a nod to the proposed tie-up. Transport and Infrastructure Development Minister Dr Joram Gumbo confirmed the new development last night. It ultimately leads to the last leg of negotiations before the deal takes off.“Yes, I can confirm that Cabinet has agreed to the investment (by DIDG/Transnet).

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We will soon be meeting with the investor to tie up the nitty-gritties. I am very happy about this development because the investors have a lot of resources they want to pour into the project to make it successful, and this includes reviving NRZ’s passenger and freight business. So, after concluding the negotiations, the first phase will begin in earnest,” said Dr Gumbo.

DIDG/Transnet was recently announced as the preferred investor out of 85 companies that were interested in investing in the country’s sole rail company. The Herald gathered recently that South African banks — Standard Bank, Nedbank, Rand Merchant Bank (RMB) — and the Industrial Development Corporation (SA) have put up funding letters worth $1,2 billion for the project, of which $400 million is earmarked for initial investment in capital expenditure. But the deal seemed to have run into some hurdles recently after questions were raised on the competence of Transnet to ably invest in the project.

However, it later emerged that much of the details and clarifications sought had in fact been submitted and evaluated during a process that involved the State Procurement Board (SPB), the Office of the President and Cabinet (OPC), Sera (State Enterprises Restructuring Agency), the Ministry of Finance and Economic Development and the Ministry of Transport and Infrastructure Development, among other Government agencies and departments.

DIDG/Transnet emerged as a winning bidder from five other companies — China Civil Engineering Construction Corporation; Crowe Howath Welsa; Croyeaux (Pvt) Limited; Sinohydro Corporation Limited; Smh Rail Sdn Malaysia — that had been shortlisted for the deal. In the initial stages, 82 companies submitted bids for the parastatal.

Essentially, the DIDG/Transnet has an ambitious three-year strategy that is premised on buying new locomotive and wagons and revamping operational efficiencies. From the $400 million capital expenditure, $150 million will be earmarked for 24 mainline locomotives and 13 rail shunters or shunting locomotives. Twenty locomotives that are part of the current fleet are expected to be refurbished. Similarly, NRZ plans to acquire 1000 new wagons and refurbish 700 that it presently has.

It is also envisaged that more than $100 million will be invested in modernising and refurbishing the State enterprise’s train control and signalling system. Johannesburg-headquartered Transnet is a state-owned enterprise that has interests in rail, ports and pipelines. Employing more than 49 000 workers, Transnet held more than $27 billion in assets by March 31, 2017 and generated more than $5 billion in revenues during the same period.

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  • Chikonzi

    This is a long term project and little signs of NRZ improvement will be seen before 3 years and $1 billion has been invested, in all cases President Mugabe and Co. will be long gone before tangible benefits are noted, mostly for SA exports to Zimbabwe and SA exports merely transiting Zimbabwe to other nations. In the meantime the majority of NRZ’s 4700 employees need to be retrenched to a streamlined 1000 to achieve the same staff-to-employee ratio and equivalent net tonne per kilometre efficiency achieved by Transnet, of which many of the 1000 employees remaining will be newly hired with high-tech skills needed for modernisation using IT and automated signaling networks.

    • Gamba ReManyika

      Staff-to-employee ratio? Shouldn’t there be a qualifier like IT staff to employee ration or HR Staff to employee ration? @Chikonzi or vamwe vanoziva ndibatsireiwo.

      • Jindaguru

        “Staff” is a generic term for management or higher level personnel above ordinary run-of-the-mill employees.

  • yowe

    Totenda dzanwa dzaswera naJoram..

  • Jindaguru

    Perhaps they should approach the employment tribunal and demand compensation for loss of livelihood if forced to abandon their habitual working environment?

  • Cecil Roars

    Minister Gumbo, what is the update on the construction of the Beitbridge – Harare – Chirundu highway? You have been giving weekly updates for a long time and I remember your last was saying the contractor was busy moving their equipment from Zambia. Are they stuck at the boarder? These stories that purport to show you as a hard working minister will come to haunt you one day.

  • s shumba

    Minister, what does NRZ do besides passenger and freight business.
    We are lead by nin…

  • ivhukuvanhu chete chete

    Makwiro Platinum in partnership with the Russians,
    Telone infrastructure development,
    Special Economic zones,
    Command Agriculture
    Dam Construction and irrigation infrastructure development,
    Harare Airport Infrastructure upgrading
    Airwaves digitalization
    The giant called Zimbabwe is awakening from its slumber.

  • Moe_Scyslack2

    These guys don’t even have a physical address from what I heard. Another zanu scam. I will eat my arm if anything materializes out of this. Nothing ZANU touches turns into anything positive except junk.

  • Wilson Magaya

    Good decision. Now lets do more of this. It has to be competitive to bring the best out of us. The more the better for we need to get to a turning point. Vanavevhu Pamberi, then they negotiate the partnerships, grow business and opt after sometime to stay or leave and do it again and again until we get to a stage where we are a hot destination for FDI. The future is Equity Investments. I wait for the scaling of this approach by Cabinet.

    “Nyika Vanhu, Musha Matare”