via NRZ to ink $650m deal | The Herald 9 December 2014 by Martin Kadzere
THE National Railways of Zimbabwe is on the verge of concluding a $653 million loan with the Development Bank of South Africa for recapitalisation. “The rail network signals rehabilitation are 60 percent complete while negotiations for a $653 million loan with DBSA for recapitalisation of NRZ are an advanced stage,” according to a progress report on the implementation of Zim-Asset.
In an interview yesterday, Minister of Transport and Infrastructural Development Dr Obert Mpofu said the deal was “almost complete”.
The deal was structured in a similar way to the model used for funding of thew rehabilitation of Plumtree-Bulawayo-Mutare highway where the loan would be repaid using revenue collected from toll gates. The $653 million loan to the NRZ would be repaid using revenue from rail services.
The DBSA provided about $206 million loan for the rehabilitation of the 823-kilometre Plumtree-Bulawayo-Mutare highway and project is almost 95 percent complete. Minister Mpofu said almost all regulatory approvals required to “consummate” the NRZ loan have been obtained.
The rail network is critical to the growth of the country’s domestic, regional and international trade as it provides bulk transport for raw materials and finished goods.
The decline in capacity from 18 million tonnes to the current 3,8 million tonnes has meant that goods that should have been transported more conveniently by rail are being moved long distances by road, thereby increasing their cost.
Finance and Economic Development Minister Patrick Chinamasa said while the 2015 Budget would support the NRZ rehabilitation programmes with $3 million from tax revenues, the bulk of the money would be mobilised from the private sector. He said NRZ would leverage its assets to mobilise funding for upgrading infrastructure maintenance which require $388 million and operating assets ($265 million).
Minister Chinamasa said the company was also engaging private investors to expand the rail network to new economic settlements not serviced by the NRZ.
COMMENTS
Why is the Chirundu Beitbridge road being neglected in all this?
Beitbridge- Bulawayo-Vic Falls and Beitbridge – Chirundu were given to our friends from the East before the South Africans were given the Plumtree-Mutare project.
So our Chinese friends are not very keen to invest in a country where they are uncertain they will get their return on investment. Check how many other project are on hold that are supposed to be funded and implemented by Chinese.
They are uncertain about Zanu puff’s political life and significance in Zimbabwe in the event old mad Bob is called by Warren Hills.
$652 million is for backdated salaries and other expenses. What a waste of a once viable proud entity.
10% is mine. So project cost is actually approximately 600 mirrion. I have no access to diamonds so this is the least I can do keep it flowing. Your ever obedient stealing son.