NRZ open recapitalisation tender

Source: NRZ open recapitalisation tender | The Sunday Mail April 21, 2019

NRZ open recapitalisation tender
Minister Matiza

Debra Matabvu
CABINET has extended the framework agreement period for the US$400 million recapitalisation of the National Railways of Zimbabwe (NRZ) tender won by the Diaspora Infrastructure Development Group (DIDG) and Transnet of South Africa to August this year to finalise outstanding issues.

This comes as various suitors have thrown in proposals to take over the recapitalisation deal after Government removed an exclusivity clause which had empowered DIDG with exclusive rights to negotiate the deal.

It is also understood that Government has started working on various proposed frameworks and models to resuscitate the parastatal if the envisioned suitors fail to come up with a lucrative deal.

DIDG penned the $400 million deal in 2017 with the aim of recapitalizing and rehabilitating the troubled railways entity.

By coming up with various options simultaneously, Government says it seeks to avoid the scenario of the Beitbridge- Harare-Chirundu road which remained untouched for years despite Geiger having won the tender to rehabilitate the road in 2016

The Geiger deal was subsequently cancelled last year.

In an interview, Minister for Transport and Infrastructural Development Joel Biggie Matiza said Government wanted to come up with a strategic road map for NRZ that would yield results in the shortest possible time.

He said Government was now looking at various options on how to resuscitate the parastatal to avoid stalling of the project.

“Cabinet agreed to extend the framework agreement to August so that outstanding agreements can be made, but we have removed the exclusivity clause and now anyone can come,” he said.

“This means we are now looking at other options, which include coming up with some framework to make NRZ profitable and sustainable.

“The deal is now open, which means if someone comes in with a better option than what Transnet wanted to do, we will give it to them. Before it was just for them (DIDG).”

“We are looking at other options, even within ourselves, to see if we have any models that we can come up with which can make the rail system sustainable. By August there will something concrete.”

Speaking from his South Africa base, DIDG chairman, Mr Donovan Chimhandamba said a lot of progress had been recorded on the NRZ recapitalization deal.

He said the consortium was working on getting the term sheets, funds transfer and regulatory approvals.

“We have up to the end of August to conclude. We have a lot of work that needs to be done. It may seem easy but it is a lot of work. For instance, we need to chart a way forward on issues such as NRZ employees, clients and customers,” said Mr Chimhandamba.

“We also have to work on regulatory approval from the South African Public Fund Management Act. It is quite a lot of work, but we are making progress.”

University of Zimbabwe lecturer Mr Smart Dumba, who specialises in traffic planning, public transport and transport-land-use interaction, said it was important for Government to improve its tendering system.

“Transport is the lifeline for any economy; thus, efforts to rehabilitate and construct railway network should be highly commended,” he said.

“However, it is important for Government to relook at its tendering systems as some of the projects take long to be completed because of the contractors (who have no ready capital).”

The NRZ recapitalisation deal involves delivery of 34 new locomotives, refurbishment of 28 locomotives, procurement of 200 new wagons and refurbishment of 768 wagons.

DIDG and Transnet have cobbled an interim solution by providing 14 locomotives, 200 wagons and 34 passenger coaches.

In the first four months of last year, NRZ moved 771 000 tonnes of freight compared to 679 000 tonnes in the same period in 2016, as benefits of recapitalisation kicked-in.

In the 1990s, the strategic logistics company used to move 18 million tonnes of freight annually.