NRZ-DBSA $650m loan talks still on

Oliver Kazunga Senior Business Reporter—
NEGOTIATIONS for a $650 million package for the recapitalisation of the National Railways of Zimbabwe (NRZ) by the Development Bank of Southern Africa (DBSA) are still on, an official has said. There has been speculation that the talks with DBSA had collapsed following the Cabinet reshuffle last year and ouster of former board chairman, Alvord Mabena, who was spearheading the negotiations.

Mabena has since been replaced by Larry Mavima with Joram Gumbo coming in as the Minister of Transport and Infrastructural Development after taking over from Obert Mpofu.

The chairperson of the Parliamentary Portfolio Committee on Transport, Dexter Nduna, said the DBSA deal was still on. “There has been a few changes on the board of the NRZ as well as a change of ministers within the Ministry of Transport and Infrastructural Development. The issue of a power shift and change of leadership has led to a slow down as far as the conclusion of the deal is concerned,” said Nduna.

“As a committee, we hope the discussions will come to a conclusive end as there’s now a new NRZ board chairperson (Mavima) and a new Minister of Transport and Infrastructural Development (Gumbo). Those are the two people that can also answer as to when the deal will be concluded.”

Mavima also confirmed the $650 million DBSA loan facility was still work in progress.

“I’m here (Bulawayo) for a few days not only for this issue (strike) that we’ve experienced a few days ago, but also for a recapitalisation plan to see as a board and management how we can recapitalise NRZ,” he said.

“Regarding the DBSA deal, we’ve not thrown them out of the window but we’ve asked them to sharpen their pencils so that we get an attractive package in terms of interest rates and tenure of the facility and soon we’ll be concluding the negotiations.”

On the industrial action by NRZ workers, Mavima said: “It’s regrettable that the workers have downed their tools without notice of the industrial action. “What it means now is that we’re not going to be getting the little income that we’ve been receiving before the strike. It’s not correct to say they’ve not been paid for 15 months.

“As management, we’re meeting with the workers’ committee representatives to resolve the matter,” he said. The ailing NRZ is saddled with operational constraints due to ageing infrastructure, lack of access to funding and a $144 million debt with workers owed over $68 million.

Against this background, NRZ employees, who are reportedly owed 15 months salaries, last Tuesday went on strike. The NRZ requires about $1.9 billion in the long-term to be fully revitalised and transformed.