Chronicle Editor
Judith Phiri , Business Reporter
AN Open Access agreement between the National Railways of Zimbabwe (NRZ) and the privately owned Beitbridge Bulawayo Railway (BBR) has resulted in the purchasing of three new locomotives and 150 wagons just a month after it came into effect.
BBR is a Bulawayo-headquartered private railway company incorporated and registered in Zimbabwe in 1997 and it became operational in July 1999.
Its main business, is the provision of bulk transport services, over its 350 kilometres railroad link on the North-South Corridor, between Beitbridge (at the border of Zimbabwe and South Africa) and Bulawayo into the hinterland.
Last year in November, NRZ embarked on a new initiative partnering with private players who are expected to bring in their locomotives and wagons to augment the parastatal rolling stock in a bid to enhance its capacity in the face of increasing demand for its services.
The initiative being implemented under a model known as Open Access, aims to address capacity challenges and provide an efficient bulk logistics solution to the expanding Zimbabwean industries.
BBR general manager Mr Raymond Shoniwa said they started operating last month under the agreement.
“We have been seeing opportunities arising in the region and we have been awarded an Open Access agreement by NRZ just like the rest of the railway operators in the region who have now realised that there is a need for private sector participation.
“After being awarded the Open Access agreement, we started operating on 1 March. We brought in three locomotives and close to 150 wagons. The Open Access model aims to bring in increased volumes,” he said.
Mr Shoniwa who could not disclose the amount invested in the locomotives and wagons, said they were capitalising on the mining developments taking place in the country.
He said that the first cargo they were looking at was lithium but because of the reduction in the lithium prices they have now opened it up to several other commodities.
“In the month of March, we have moved chrome, copper, and clinoclase, so it’s a bit diversified the portfolio we have moved so far. In a year like this one where there is drought, governments are definitely not going to release money towards infrastructure, as most of the money will go towards drought relief. So the coming in of the private sector brings in excess locomotives and wagons that the railway operators need,” said Mr Shoniwa.
In terms of the current BBR concession, Mr Shoniwa said they feel encouraged about their operational successes and the prospects for extending their impact beyond 2029, as the region continues to open up.
He said rail continues to play a significant role in supporting the booming copper industry in the region, while there were major opportunities for the rail sector to expand its capacity and meet the rising demands of mineral transportation.
“Currently, we are moving below 20 percent, to us some might look at it as a bad thing, but from a private sector perspective, it’s an opportunity for us. There is a need for a balance between revenue and costs, the issue of transit times plays a big role,” he said.
“We are getting on tracks that need rehabilitation, so sometimes you are taking double time and it’s costing you double costs in terms of labour, and locomotives time. We have been discussing with State-owned enterprises to say factor in your formulas that there is still room for improvement on the track and also if that commitment can come to say that whatever access fee is paid goes towards rehabilitating the track that will solve in the long term the current challenges that are there.”
BBR’s shareholding comprises leading foreign, private investors and financial institutions namely, Nedbank Limited (SA), Old Mutual (SA), NLB (Mauritius), and Grindrod (SA) under the umbrella of NLPI Limited (NLPI). NLPI holds an 85 percent interest while locally the Government of Zimbabwe through NRZ holds a 15 percent stake in the company.
Bongani Ndlovu