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Business Reporter
Recapitalisation and turnaround efforts at the National Railways of Zimbabwe (NRZ) recapitalisation may be bearing fruit after the company recorded a rare profit of $270 billion in 2021 from a net loss of $3,4 billion the prior year.
This emerged at the company’s Annual General Meeting last week, where the organisation’s 2021 annual report was presented, although no updates were given on the firm’s more recent financial performance.
NRZ is among a long list of State-owned companies that have for years survived on bailouts from the Government due to poor performance despite their critical role in supporting the economy.
“The company continued to operate below break-even point due to a decline in tonnage and resultant revenues generated thereof, however during the period under review, the company realised a comprehensive profit of $270 billion compared to a net loss of $3,4 billion in the previous year,” said NRZ general manager, Ms Respina Zinyanduko.
The entity is targeting to increase the capacity of its freight from the current 2,5 million annually to 6,5 million by 2025 to ensure the ailing railway giant optimally plays its role as a key economic enabler.
“The critical role of NRZ as an economic enabler will entail increasing capacity of freight from the current 2,5 to 6,5 million tones by 2025 and improvement of the passenger train services,” noted Transport and Infrastructural Development Deputy Minister Mike Madiro at the AGM.
The Government is convinced that the revitalisation of NRZ is central to ensuring the organisation becomes the dominant logistics player in the region by 2030.
“The Government’s commitment towards revamping NRZ from the highest office is beyond doubt. The objectives are to improve the rail infrastructure quality index to 68 percent by 2025 from the current 57 percent and increase freight volumes to 6,7 million tonnes per annum from the current 2,3 million tonnes as well as increase passenger services.
“The Government is eager to see the success of NRZ and hence our emphasis to make good the NRZ vision: To be the dominant logistic player in the region by 2030, ” he added.
The country’s railway giant has so far managed to refurbish 257 wagons against a target of 300.
NRZ and ndian Railways Infrastructure Consultancy and Engineering Company, (RITES) Limited recently signed an equipment deal worth US$81 175 500 for the supply of rolling stock wagons.
The rolling stocks to be provided in the RITES deal include 3 000 horsepower diesel-electric locomotives and high-sided open wagons.
In a statement in May 2023 RITES said, “The provision of advanced locomotives and wagons is set to revolutionise the country’s rail network, facilitating the efficient and seamless movement of goods and passengers across Zimbabwe.”
However, the filing by RITES noted that the contract agreements were subject to the approval of funding by the funding agency.
“The successful allocation of funds will pave the way for the commencement of this ambitious project, further reinforcing the partnership between RITES and NRZ,” RITES said in a statement.
NRZ and RITES, have been working with the African Development Bank on an engineering, procurement, construction, and funding contract for two years now.
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