NRZ gets $400m lifeline

Minister Joram Gumbo

Minister Joram Gumbo

Takunda Maodza and Thupeyo Muleya—
The State Procurement Board (SPB) has awarded a $400 million tender for the revival of the National Railways of Zimbabwe (NRZ) to a consortium comprising Transnet and the Diaspora Infrastructure Development Group, throwing a lifeline to the parastatal seen as a key enabler to economic revival.At least 88 companies across the globe bid for the resuscitation of NRZ, including eight from Britain and 16 from South Africa. The Herald is reliably informed that companies as far as China, Malaysia and the United Arab Emirates had also expressed interest in the deal.

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Transport and Infrastructure Development Minister Dr Joram Gumbo confirmed the development in an interview with The Herald.

“It is true,” he said. “I am really excited. The National Railways of Zimbabwe is a very important key performance enabler to our economy. If you look at the movement of coal, mining products, agricultural produce and even passengers, it plays a critical role.

“When it is functioning well, it results in the preservation of our roads. Haulage trucks were damaging roads.”

Dr Gumbo thanked Government for taking over the NRZ debt, saying it opened the gates for investors, who all along were interested in the parastatal, but were uncomfortable with its indebtedness.

“When I made a request to warehouse the NRZ debt and Government agreed, I was relieved,” he said. “We got 88 bidders from Malaysia, United Arab Emirates, South Africa and Britain. The interest was high.

“I am happy SPB awarded this tender to indigenous people. Zimbabweans who have come up with own funding. If Zimbabweans who are outside the country could work together and come home and make a contribution like this to our country, I marvel at such developments. It is very good news for the country. NRZ used to employ many people.”

The other companies that were shortlisted included China Civil Engineering, Sino Hydro, Crowe Horwath & Welsa Chartered, SHM Railway of Malaysia and Croyeaux Ltd.

But the SPB awarded the $400 million NRZ capitalisation tender to a consortium comprising Transnet and the Diaspora Infrastructure Development Group (DIDG).

DIDG executive chairman Mr Donavan Chimhandamba, who is also the co-chair of the DIDG/Transnet Consortium confirmed the development last night.

He said they had since received communication from NRZ. “We will commence with contract negotiations as early as next week,” said Mr Chimhandamba. “We hope that within the next two months all agreements will be concluded and we can immediately commence with the major works.”

Mr Chimhandamba said DIDG and Transnet were venturing into the project as an equal partnership.

NRZ requires at least $400m recapitalisation, which include the procurement of new locomotives and resuscitation of infrastructure to increase its annual traffic volumes.

DIDG is made up of Zimbabweans in the diaspora who have pooled their financial resources. The company is made up of various economic technocrats based mainly in South Africa and overseas.

Mr Chimhandamba said they had a strong dedicated team of experts, with all the members having been involved in entrepreneurship and starting up a number of successful companies.

He said they had experience working with local, regional and international financial institutions.

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  • Donald Trump

    How do you give tender of such a big project to people without track record at all in the name of indegenisation. Ndipo pazvatofira ipapa

  • Development Proponent

    Enlighten me. What contract negotiations would take two months and with who if you have won the tender? If the tender specifications were clear and the company / consortium did indeed win on merit then our expectation is for works to commence.

  • Wakisai

    Over the last couple of years, we’ve have many official statements and estimates of between $10 billion and $2 billion required to fully operationalise or at least modernise and give a substantial boost to restarting NRZ operations. We know out of that $400 million “lifeline”, a large percentage will be required to pay for salary arrears and retrenchment packages to a substantial proportion of deadwood and management accumulated over decades, and in order to find competent external personnel with substantial knowledge of running a modern 21st century railway infrastructure, reputable outside international agencies will be required to avoid being forced to use the usual crop of useless unqualified Government linked Zanu-PF appointees, who’ve slowly destroyed and brought the NRZ to its knees over the years. The obvious danger is most of that $400 million will be diverted and frittered away on superfluous expenses, perks, allowances, and new luxury vehicles etc, to satisfy the greed of the habitual well connected crowd. Until the NRZ is completely privatised and Government and the Zanu-PF party is totally banned from interfering with NRZ operations or staff selection, there’s little chance of any NRZ recovery no matter how much money is thrown at it.

  • Moe_Scyslack2

    Diaspora infrastructure Development Group? Another conduit to siphon money to the fat cats. The Independent reports that the entity was only formed on paper a few months ago and the address they gave is non existent. As Lumumba says, Dig deeper.

  • Rob

    The prefect combination: Zimbabwean disappears + a corporation from a fellow African country. All the best people, make it work for all of us

  • Ziyabheda

    Will the $400 million address all the challenges that the railway line is facing or the only criteria used was because some of the shareholders are indigenous Zimbabweans? We understand someone had tendered for $2.5 billion. Was that offer not going to take us into the future of rail technology instead of just addressing the current challenges? And is addressing the future not part of the modernization process we are yearning for?

  • mpengo

    Such a significant infrastructural and logistical project gets $400million, yet next door Robert Mugabe University gets $1billion!!!

    Priorities, right?!!

    • Gary WekuZviyambe

      Maybe we should first change the name to ** Railways

  • lot chitakasha

    Aiwa njanji ngaidzoke..I used to enjoy travelling by train. Massive employer too!..act!!

    • yowe

      Dont hold your breath…Maybe vazukuru vako ndovachakwora chitima kwete iwe

      • lot chitakasha

        Yowe ! …inga mahwani!

  • yowe

    Zimbabweans with own funding type dzanaWicknell??? Hahahaha another dead project VIVA ZANU PF

  • masvukupete

    The debt was to enrich (mismanagement) and now it becomes the burden for the tax payer. The previous managers should pay for the debt, why let them go scott free. These parastatals have been the conduit for milking the wealth of the country to a few people. (RBZ mechanisation being a notable case)

  • Common Sense

    Tell me then, how are Transnet and Diasporan’s ‘Indigneous’ ??? !

    Last week ED told us even white people from the Diaspora in SA were willing to invest… Is this the same people in the DIDG??!

    Ooops, does that make whites indigenous ? :)

  • Enry

    What is debt warehousing?

  • enry

    we are in election mode…

  • YemenPapaT

    You must be an idiot! Of course you need engineers, duh!

  • natural nyasha

    $190 million in salary arrears