THE National Railways of Zimbabwe (NRZ) will defend the US$236 million lawsuit filed by the Diaspora and Infrastructure Development Group (DIDG) following the termination of a US$400 million recapitalisation deal.
Last year, Cabinet revoked the recapitalisation deal that NRZ and DIDG/Transnet Consortium signed in 2017 on the basis that the group lacked financial capacity to implement the project after DIDG and Transnet parted ways.
DIDG, through their lawyers, Atherstone and Cook, were last week reported to have filed a lawsuit claiming damages to the tune of US$235 984 757 split in two parts namely project costs and “reasonable profits”, which DIDG anticipated to secure had the deal materialised.
NRZ board chair Advocate Martin Dinha said they had resolved to defend the lawsuit that DIDG had filed against NRZ.
“The board met yesterday (Saturday) with regards the lawsuit that has been filed by DIDG in South Africa who basically are making a claim of US$236 million against NRZ for breach of contract and damages, arising out of a cancellation of a tender that Government as the shareholder and NRZ as a parastatal cancelled on grounds of non-performance and inability of the bidders (DIDG) to meet conditions that had been agreed on,” he said.
“The entire NRZ board has taken the view that we will defend the lawsuit and we have prospects of winning the case because the records by Government and NRZ point to the fact that there was no breach of contract on the part of NRZ.”
Adv Dinha, who was appointed last year to lead the NRZ board, said the US$400 million rehabilitation tender was won by a consortium comprising DIDG and Transnet and not by an individual entity.
“They (DIDG/Transnet) won the bid as a consortium, now the other party was going alone, so on that basis and many other grounds NRZ is saying we are not in breach,” he said.
The planned NRZ rehabilitation programme among other critical works entails revamping of rolling stock and installation of traffic signals.
He said they were also going ahead with implementing a management restructuring programme as recently directed by Transport and Infrastructural Development Minister Joe Biggie Matiza.
“The other issues we are seized with are issues of restructuring, we are continuing to change the environment at NRZ to bring in efficiency to recruit capable staff,” said Adv Dinha.
“We concluded our negotiations with the outgoing general manager Engineer Lewis Mukwada.”
Last month, NRZ board in line with the Government’s directive to restructure the parastatal fired Eng Mukwada and three other senior executives namely; director corporate services Mr Misheck Matanhire, director operations Mr Samson Bhuza and director marketing Mrs Elector Mafunga.
The NRZ management restructuring programme is ongoing.
One of the parastatal’s board member Mr Joseph Mashika has been appointed acting general manager effective last month.
“We are also concluding our negotiations with the other directors,” he said.
“We have submitted to the Office of the President and Cabinet (the Corporate Governance Unit) the packages, we have agreed with them (fired senior executives).
“They are not golden handshakes as many people think, Government will determine at the end of the day what they should get because disposal of public property like motor vehicles, land and so forth, it’s Government by law.”