Grindrod plans $5m Zim railway upgrade

via Grindrod plans $5m Zim railway upgrade – Sunday News Mar 13, 2016

Senior Business Reporter
SOUTH African integrated logistics service provider Grindrod Limited will inject $5 million in the next three years towards upgrading of rail infrastructure in Zimbabwe, an official has said.

The company through its subsidiary, New Limpopo Project Investments that provides a rail link in Zimbabwe between Beitbridge at the South African border and Zimbabwe’s second city Bulawayo runs the Beitbridge-Bulawayo line after it bought an 85 percent stake in Beitbridge-Bulawayo Railway (BBR) company in 2014.

BBR chief executive officer Ms Tembi Moyo said the company was satisfied with its Zimbabwean operations despite the economic challenges that continue to haunt every business in the country and the region as a whole.

“We enjoy a close relationship with the National Railways of Zimbabwe that has seen us collaborate on the maintenance and operation of what is commonly referred to as the North line, which is a critical part of the Regional North-South Corridor.

“We have injected new locomotive power on this line by way of six GL locomotives with a trail load capacity of 1 800 tonnes. Major upgrading works were carried out on the Esigodini-Bulawayo section of the line. Further upgrade works worth $5 million are planned for the period 2016-2018,” Ms Moyo said.

She said the company was anticipating to move low volumes this year compared to last year largely due to the depressed economy and business.

“Last year we moved one million tonnes. Our target for this year is 800 000 tonnes, much less than what would have been ordinarily expected. The organisation takes a long-term view of its business and hence anticipates better times ahead,” she said.

BBR is part of NLPI which runs rail investments and projects around the African continent including in South Africa, Mozambique, Zambia, Sierra Leone, Cameroon, Nigeria and the Democratic Republic of Congo.

The BBR project is a Build-Operate-Transfer (BOT) project that has shortened the distance between Bulawayo and South Africa to 317 kilometres.

Prior to its inauguration, rail service between South Africa and Bulawayo used to be routed through Botswana that is about 200 kilometres longer.

The shorter line has been used primarily for freight transportation.

The BBR was inaugurated on 15 July 1999. After 30 years of service the BBR will be handed over to the NRZ at no cost. It has had a profound negative impact on the profitability of Botswana Railways that saw its Zimbabwe-related freight volume drop by 90 000 to 10 000 tonnes.

The rail sector in Zimbabwe is in dire need of recapitalisation as the wagons, locomotives, tracks and signalling systems are all antiquated and in need of replacement. It is estimated that an initial investment of $635 million is required urgently.

The company’s biggest rail operator, National Railways of Zimbabwe has been on a downturn resulting in most of its operations crumbling. This has seen BBR picking up the pieces especially in the Beitbridge to Victoria Falls line which is one of the most lucrative due to coal mines in the Hwange area.