Oliver Kazunga, Acting Business Editor
SECURING an investor to fund the US$400 million recapitalisation of the National Railways of Zimbabwe is not an easy task in light of the illegal economic sanctions the country is reeling under.
Responding to questions from journalists during a media briefing soon after their engagement with officials from China Mining Logistics Holding Company in Bulawayo last week, NRZ board chairman Advocate Martin Dinha said raising US$400 million under an environment characterised by sanctions was a mammoth task.
“When we’re talking of recapitalisation, we’re talking of figures that are very monumental. The figure of US$400 million is not an easy figure in terms of raising it and churning it out against a background of an economy that has official sanctions from states like America and the European Union,” he said.
China Mining Logistics Holding Company has proposed to set up its iron ore extraction project in Zimbabwe and was courting NRZ to transport two million tonnes of iron ore per year over 10 years from Zimbabwe to the Asian country.
Zimbabwe was slapped with the illegal sanctions by the West following the launch of the Land Reform programme in 2000.
“The impact of sanctions is that anyone who wants to put his money in a country, the country risk becomes higher because he starts looking at investing or not.
“The Americans will block the money,” said Adv Dinha.
The country’s strategic transporter was scouting for an investor for its recapitalisation project after Cabinet, towards the end of last year, cancelled the US$400 million deal the parastatal had signed with the Diaspora Infrastructure Development Group (DIDG)-Transnet Consortium.
The DIDG/Transnet Consortium was awarded the tender by the then State Procurement Board in August 2017 for the revival of NRZ.
NRZ’s rehabilitation programme entails renewal of plant and equipment, rolling stock, track signalling and telecommunications infrastructure and supporting information technology systems.
In light of President Mnangagwa’s call to ensure the country from all corners, overcomes the adverse impact of sanctions, Adv Dinha said NRZ board and management have come up with initiatives to foster viability of the organisation by boosting its freight volumes from the current less than three million tonnes per year to 18 million.
At its peak in the 1990s, the company moved about 14,4 million tonnes of freight against an installed capacity of 18 million.
“Some of you think the issue of sanctions is a political issue, it’s a real issue. For instance, somebody wants to establish his plant in Bulawayo, he will look at how can he move his money, how risky the environment is in Zimbabwe and will think twice.
“So, as we look at the bigger picture, we cannot sit by. The President (Mnangagwa) was clear we must come with initiatives to make sure we survive as a nation and as entities,” said Adv Dinha.
He said their recent meeting with officials from China Mining Logistics Holding Company was part of NRZ’s strategic plan to chase after business from across all economic sectors.
The strategic entity, which needs US$1,9 billion in the long-term was also implementing interim solutions to cover its resource gaps and improve operational efficiency.
Such interim arrangements include leasing 13 locomotives, 200 wagons and 34 passenger coaches from Transnet. — @okazunga