Editorial Comment: Key considerations in Zimasco-NRZ deal

07 Jul, 2020 - 00:07 0 Views
Editorial Comment: Key considerations in Zimasco-NRZ deal The resumption of operations at Zimasco is a welcome development for the NRZ (File Picture)

The Herald

The uncomfortable truth about last week’s announcement of a partnership between the National Railways of Zimbabwe (NRZ) and chrome ore miner, Zimasco, is that it exposes the parastatal.

Zimasco, realising that its business would be affected by the potential of erratic deliveries to markets and that the market does not wait for it — because competitors abound — decided what any alert and competitive operator would do. That is explore alternative solutions.

In this case, the solution was hiring locomotives from South Africa.

These would be dedicated to transporting the chrome miner’s ore, domestically and to markets abroad.

Zimasco does not own railway lines, and is not in the business of running railways. Therefore it sought “partnerships” with the NRZ.

The outcome of the partnership will result in Zimasco increasing its capacity to move chrome ore exports from the miners’ operations in Mutorashanga, in Mashonaland West province, to the ports.

Zimasco and NRZ entered into the deal early this year after the chrome miner realised that the rail operator was having challenges transporting Zimasco’s ore destined for the export markets.

But herein lies what could be the problem; as the backbone of the national transport system, the NRZ should have been at the forefront of exploring ways of meeting the requirements of companies or organisations that require its services or those with a potential for needing its services.

This can be established by conducting a market needs assessment survey.

Approaching mining companies and industries that require movement of their raw materials throughout the country and to and from the sea ports ought to be part of the NRZ’s brief.

It should not be the other way round.

The reason why today there are so many haulage trucks on the country’s road network is precisely because of the NRZ’s failure to anticipate and put in place systems that answer to the needs of industry.

The substantial migration of business from rail to road clearly speaks, in part, to issues of unreliability and inconsistency in delivery.

In hiring locomotives from South Africa, Zimasco realised that in order to meet export orders consistently, it needed dedicated transport to ship the chrome ore to the seaports.

The point is that because the parastatal is in the business of providing transport for the various industry needs, an assessment of the industry’s requirements would have brought to the fore areas requiring focus and then re-equipping the parastatals to meet the demands of its existing and potential clients.

While it might mean spending in order to gear itself up to meet customer needs, the NRZ would still be able to make money from billing industry for transporting orders domestically and for exports.

Issues of reliability, consistency and security are among key considerations that have driven industry to road transportation instead of depending on the NRZ.

Even as Zimasco entrusts the locomotives to the NRZ, it is on the understanding that deliveries to export markets will be on target, every time.

Failure to observe these could prove costly for Zimasco as there is a risk of losing export orders due to breach of contractual agreements on delivery schedules.

In this instance, it is Zimasco that has demonstrated strategic leadership.

In putting together this arrangement, the expectation is that NRZ will be able to consistently provide the logistics required for exporting the high-grade Zimasco exports that earn the country much-needed foreign currency.

NRZ is presently transporting 45 percent of Zimasco’s exports. It cites shortage of locomotives. So there is enormous scope for reclaiming the remaining 55 percent that is presumably being transported by road.

So far this year, Zimasco has exported 160 000 tonnes of ore from Mutorashanga and is targeting to ship 300 000 tonnes by the end of the year.

To place matters in perspective one has to ask: Where is the NRZ when the country is reeling from failure by the Zimbabwe United Passenger Company (ZUPCO) to move the public to and from their places of work?

Even during this lockdown phase, the NRZ would be moving the bulk of workers who are struggling to get to and from work every day if, in the case of Harare for example, there were passenger trains running on time from Inkomo Barracks/Nyabira/Mt Hampden; Norton; and Marondera.

The same could be said of Bulawayo and other cities where there is scope for passenger trains.

Yet evidence abounds that during the period January-June 2019 the NRZ moved more than half a million passengers.

That level of demand for transport by the public should have informed the parastatal on how to anticipate and plan a response to public transport requirements.

Members of the public are having to pay exorbitant fares because of inadequate transport.

The NRZ would offer value for money for the majority of people, if it was up to the task.

Railway reduces the cost of doing business.

But efficiency, consistency and reliability will attract more business to the NRZ and in the process, remove a lot of the haulage trucks on the country’s roads, thus contributing to reduction in road traffic accidents.

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