adminInstead of companies using rail transport which is cheaper, many have resorted to costly road transport to ferry goods, resulting in them passing on the increased cost of production to consumers.
Apart from that, heavy trucks carrying huge loads are damaging our roads because there are now too many of them ferrying goods which ideally should be transported by trains.
NRZ’s problems stem from inadequate capitalisation which has seen it operate with a reduced fleet of locomotives and wagons.
While it had targeted to carry six million tonnes of freight this year, the company has revised the figure downwards to 4.3 million tonnes because of capacity constraints.
The NRZ requires $2 billion over the next 10 years while $400 million is needed in the short to medium term.
Attempts to raise money from its shareholder, the Government, have failed because the State does not have the money required to recapitalise the parastatal.
With the present state of the economy, lines of credit or loans which could have provided another source of funding are out of the question, as there are few financial institutions prepared to extend loans to government linked parastatals such as the NRZ.
This then calls for alternative ways to raise capital to ensure that the parastatal recovers from its predicament.
In a story carried in yesterday’s Business Chronicle, we reported that the Government was negotiating with a South African company for a Build-Operate-Transfer arrangement to repair the country’s railway infrastructure.
The deal, if successful, would see the unnamed company pouring in $340 million into the NRZ to acquire locomotives and repair the railway system.
The fact that a South African company has shown interest in the NRZ, an entity riddled with problems and labour strife after workers have gone for months without being paid, shows the company has potential to operate viably if adequate capital is injected.
While we are not privy to the books of the Bulawayo Beitbridge Railway, a company formed on BOT arrangement in the late 1990s, it seems to be doing well compared to the NRZ.
The success of the BBR model shows that the BOT arrangement can be crucial in providing infrastructure in cases were the Government does not have the money to do the job.
Such arrangements with the private sector need to be promoted as long as they safeguard the national interest.
With the country requiring billions of dollars to rehabilitate infrastructure, the Government needs to actively promote the signing of BOT arrangements with companies in the private sector in other sectors of the economy such as roads and water provision.
The good thing with BOT is after an agreed period, the infrastructure would be handed over to the State.
Online Reporter