Mnangagwa, minister cross swords over nrz 

Source: Mnangagwa, minister cross swords over nrz – The Zimbabwe Independent October 4, 2019

Joel-Biggie-Matiza.jpg

TINASHE KAIRIZA

PRESIDENT Emmerson Mnangagwa is on a collision course with Transport minister Joel Biggie Matiza over the US$400 million National Railways of Zimbabwe (NRZ) recapitalisation project, as it reaches critical stages ahead of full-swing implementation, the Zimbabwe Independent can report.

While Mnangagwa has thrown his weight behind the project which he commissioned in February 2018, Matiza has been throwing spanners in the works as he pushes for a Dubai based firm, Feonirich Investments LLC, to come in through the back door.

Sources said the fight over the deal is expected to intensify today as Matiza has called for an emergency NRZ board meeting at 10am today in Harare to pressure the directors and management to reserve their recent resolutions and implementation roadmap.

The meeting will be also attended by the transaction and legal advisers, Deloitte & Touche and Dube, Manikai & Hwacha (DMH) law firm respectively, as well as the NRZ management, the sources said. The transaction and legal advisers are seen as the minister’s allies.

This emerges against a backdrop of raging fierce clashes between NRZ chairman Martin Dinha, a lawyer, and Matiza on the funding and the implementation of the project.

“Letters have been flying back and forth between Matiza and Dinha of late and this has reached a crisis point. After the NRZ board recently passed funding and implementation resolutions following the Afrexim funding proposal, Matiza has been trying to get the broad to meet to reverse those resolutions, claiming he had not been briefed,” a senior government official said.

“So at a meeting will be held today at 10am to deal with the matter. The issue is the minister seems to have a vested interest and prefers a different consortium from the one involving DIDG and its partners. We have repeatedly heard that Feonirich is in the background and the minister has not denied those reports. The President supports the project, but his minister is undermining him. How is that possible? Something must be done decisively to realign the process to allow full implementation given that Africa Import-Export Bank (Afrexim) has provided the money.”

The NRZ board, deputised by Major-General Hlanganani Dube, is expected to escalate resistance to Matiza’s coercion and pressure in today’s do-or-die meeting.
Afrexim has been appointed the mandated lead arranger of the multi-million dollar transaction, with the primary responsibility of mobilising funding from a number of banks which have shown interest in the deal. Under the arrangement, the continental bank will inject US$100 million into the project widely seen as Mnangagwa’s showcase of parastatal reform and economic recovery.South African banks will shell out the balance.

In a bid to speed implementation, Mnangagwa met Afreximbank president Benedict Okey Orama in the United States, New York, on the side-lines of the United Nations General Assembly last week where they discussed funding for various projects, including NRZ.

During the meeting, Mnangagwa urged Afreximbank to release resources for the project, while Orama expressed commitment to mobilise the required funding.
The continental bank chief, however, said to the President that the only the last step of creating a Joint Venture (JV) agreement between the consortium and NRZ was remaining.

Mnangagwa highlighted that the US$400 million required to revamp the country’s shambolic rail network had been secured through Diaspora Infrastructure Development Group (DIDG) and its partners during his State of the Nation Address (Sona) and the official opening of the 2nd session of the 9th parliament on Tuesday.

However, this is in sharp contrast with Matiza’s pronouncement in parliament in May, when he suggested that DIDG had failed to secure funding for the project, even though he had been furnished with indicative bank term sheets by the consortium totalling over US$1 billion.

Since then Matiza has been fighting with the NRZ board and management which recently passed resolutions and came up with a roadmap towards implementation.
On August 30, DIDG, in the company of Afrexim regional director Humphrey Nwugo, presented their proposal to the NRZ board, indicating their financial capacity to undertake the project.

Now the process is with the Ministry of Finance for approvals.But Matiza has been belligerent towards the NRZ board and management over their recent resolutions to push the deal forward.

As reported by this newspaper on September 20, Matiza is leading a syndicate of top ministry officials and NRZ management manoeuvring to muscle out DIDG and smuggle into the deal through the back door, Feonirich, even if the Dubai based firm failed to meet the tender bidding requirements for the project.

An appeal by Feonirich to be given preferential treatment to submit its proposal after the bidding process was closed was thrown out in 2017 by the State Procurement Board now the Procurement Authority of Zimbabwe.

Through spirited plots to derail the project, Matiza has roped in the transaction and legal advisers of the project to disrupt and seize control of the deal.
As part of that pressure, the minister has of late called for board meetings to pressure directors to change their resolutions and implementation strategy. The meetings have been resisted until today.

Matiza is today expected to use the meeting to try to change the resolutions and create an opportunity for Feonirich at the expense of DIDG and its partners.
At the time of going to print, Matiza was not answering his mobile phone and had not responded to questions about these issues and Feonirich. He has repeatedly neglected or ignored to answer queries on Feonirich.

After today’s meeting, the minister is expected to address a press conference putting a spin on the project and developments so far as he prepares for a cabinet briefing to help Feonirich.

But sources said Dinha has warned Matiza that his actions amounted to working against the NRZ board resolutions and the project.
Dinha has also underscored that he stood guided by terms of his appointment by Mnangagwa, through the Office of the President and Cabinet, not the minister’s directives.

This was after Matiza had confronted Dinha, demanding a progress update report on the recapitalisation deal and pushing for meetings to discuss board resolutions.

Sources said Dinha has also defended the manner in which the NRZ board had presided over the recapitalisation process, while giving Matiza a chronology of events that have shaped the transaction process until now.

Insiders say Dinha has made it clear that Deloitte were appointed as the transaction advisers by NRZ not the ministry. He said DMH, which Matiza is also trying to leverage to secure his position and interest, was only subcontracted by Deloitte.

As a result, Dinha made it clear to Matiza that it was irregular, and in violation of sound corporate governance principles for the transaction and legal advisers to report directly to him.

Sources told the Independent that Dinha further told the minister that through the transaction advisers, he had now established “a parallel communication” structure which has created conflict and clashes.

Dinha did not respond to questions sent to him by the Independent as he was reported to be ill.Efforts to get comment from Feonirich failed.

A number of regional banks have been waiting in the wings with close to US$1 billion to bankroll the multi-million dollar project.

The project has already been unfolding with the provision of an interim rolling stock solution which comprises 14 new-age locomotives, 200 high-side wagons and seven passenger coaches. The solution structure entails full lease of rolling stock at below market cost, leveraging existing interchange agreement between South African rail, pipeline and ports utility Transnet and NRZ, and provision of spares, support and maintenance for leased fleet

COMMENTS

WORDPRESS: 1
  • comment-avatar
    Nyoni 1 month ago

    Mr Ed. Fire the nyamazan.