adminTinashe Makichi Harare Bureau
National Railways of Zimbabwe is struggling to attract investment from the private sector because it is not bankable which has seen it failing to stem its ballooning salary debt, a senior company official said.NRZ’s salary arrears have increased to about $55,8 million as the parastatal’s fortunes continue to take a knock due to a subdued market.
In June this year, NRZ owed its 6,000 workers about $36 million in outstanding salaries and back pay with workers going for six months without salaries while it is reported that half a billion dollars was needed to recapitalise the parastatal.
In an interview with our Harare Bureau yesterday NRZ acting general manager Lewis Mukwada said if NRZ is able to recover (with the necessary support of the international investors), it would be a vital national asset.
He said further investment, particularly from the private sector will remain an issue as NRZ is “not quite bankable.”
“Whenever we try to get loans the banks want collateral and they look at your assets and balance sheet so in terms of our assets generally we don’t have the ones that’re good enough to be used as collateral.
“The infrastructure that we have isn’t movable and on the locomotives some can be used but they belong to the state. This is the reason why as NRZ we normally rely on government guarantee instead of using our own assets,” said Mukwada.
He said “NRZ also owes employees and the Zimbabwe Revenue Authority some money therefore the balance sheet isn’t strong at the moment. So for somebody to give us a loan when we already owe other people such huge amounts of money becomes a challenge.”
Mukwada said currently they are working on the Development Bank of South Africa facility and the financial institution at least understands the current state of Government entities.
NRZ has received $460 million from the DBSA, which has been used primarily to support infrastructure and rolling stock.
NRZ is responsible for a national network of approximately 2,700- 3,000km, with its main line running for 1,500km.
Over the past 10 years, the organisation has received very little funding and has been able to undertake very few upgrade projects.
NRZ has a fleet of 168 locomotives, 70 of which are serviceable, although all are reaching the end of their life spans. The bulk of the fleet is over 30 years old and there has been a plan to do ‘stop gap’ rehabilitation of locomotives at approximately $750,000 per unit until finance is available to buy a new fleet.
NRZ has around 8,000 wagons, but only 50 percent of these are in working order. About 385,5km of rail track needs to be rehabilitated across the network.
Mukwada said the signaling and telecommunications network is in urgent need of repair and rehabilitation.
Currently NRZ is using a UHF system ‘just to get by’.
In the long term, NRZ has identified a number of new lines it would like to construct the majority of which need detailed feasibility studies.
NRZ plans to undertake on a commuter rail service between Harare and Chitungwiza, a 1,067mm gauge, 26km double track line at an estimated cost of $440 million.
Lion’s Den to Kafue a line to provide shorter transport links between Mozambican and South African seaports is among the projects.
Harare/Bindura to Moatize (Mozambique) is also another project to be churned out to facilitate the transportation of granite from Mutoko and agricultural produce between Zimbabwe and Malawi via Mozambique.
Mukwada said NRZ’s system was designed to transport 80 million tonnes per annum but it is currently moving only six million tonnes due to depressed market, and its reduced capacity.
Londile Moyo
Bongani Ndlovu