Online Reporter
Sikhulekelani Moyo [email protected]
NATIONAL Railways of Zimbabwe (NRZ) is banking on the National Development Strategy 2 (NDS2) to recover freight volumes from the current 2,5 million to three million tonnes to 12 million tonnes through urgent railway revitalisation, an official has said.
Speaking during a plenary session at the Zimbabwe Economic Development Conference (ZEDCON), NRZ engineer Richard Gurure said the parastatal’s decline was an open secret, caused by a cocktail of issues, but Government had now elevated its revival to a national objective.
“If you look at where we are right now, it’s an open secret. We have had the decline in the volumes. But when we look at it from inside, outside, we have put it under NDS2 to be able to be assisted in terms of recovery, so that we are able to move our volumes back from the decline volumes, which is around 2,5 to 3 million, back to the 12 million. That is what is captured in NDS2,” said Eng Gurure.
“To just summarise what we basically require, which is also enshrined in that strategic document, is the railway revitalisation. That is very key.”
He said while there was a proposal for a corridor-by-corridor approach, NRZ’s immediate submission was to address precautions which account for about 10 percent of the entire network and are contributing to lengthy transit times and delays in the delivery of goods.
“So the investment basically will then be spread over the entire network, because we are seeing these situations all over the network. That was our first approach to say, let us address this, because we are carrying goods and services all over the network,” he said.
“The submission is noted. I think it is appreciated. We will definitely also be looking at that in the medium to long term corridor-by-corridor approach.”
Eng Gurure said NDS2 had shifted responsibility for NRZ’s revival from the parastatal alone to a national objective requiring a team effort, including the private sector.
“This is basically our effort, team effort that is required basically to bring it up to strength. So you will then see the end game is to address the ever-widening gap in terms of providing this logistic solution. Someone spoke about the domino effect, where you are saying once you get it right, the cost of doing business goes down. So everything that you are providing then becomes very attractive to the market, it becomes affordable to the customers,” he said.
Responding to questions on NRZ’s role as a conduit for continental trade from Cape Town and Durban in the south to as far as Kenya, and its potential to attract private capital through Public-Private Partnerships (PPPs), Eng Gurure said NRZ was well placed but currently viewed as a bottleneck due to capacity constraints.
“We have had a decline in terms of volume from what you were basically calling the north-south corridor. So we had some recent engagements with Transnet for the movement and revitalisation of that corridor. Because it is very key for us,” he said.
He said due to the boom in the mining sector, specifically chrome movements, there had been a lot of activity on the Rutenga-Beitbridge-Mozambique line, known as the Rutenga line and the Maputo corridor.
“Because of our central location, you then see that there is a lot of transit traffic that we are supposed to be handling. But because of these capacity issues, we are basically being viewed as a bottleneck. That’s why if you see what is happening around us, you then see the other countries that are bordering us, they are coming up with alternatives in terms of other trade routes. But we are working very hard to keep them within reach and also to improve on the volumes,” he said.
On attracting investment, Eng Gurure said work was being done through the shareholder and parent ministry, the Ministry of Transport and Infrastructural Development.
“What we are having right now, we have got a facility that we are closing. It has been mentioned in the press and in the print media. You then see this is a US$150 million facility with Afreximbank.
“This is project financing. We are supposed to actually anchor it with some ring-fenced business volumes, which is basically our chrome, which is our highest, which is going to export to Maputo. This is our anchor business,” he revealed.
He said NRZ had had PPP arrangements over the years, with the most recent being the commissioning of three locomotives and 100 wagons under a deal with CMAG.
“This was for the capacity side. It was not addressing the infrastructure side. The last PPP that we had in terms of infrastructure development was for the development of the Beitbridge Bulawayo Railway, which is from, I think, 1999. That was the last time. So this is something that we also need to look into and be able to leverage on,” said Eng Gurure.
He confirmed the China Railway International Group deal estimated at US$600 million was a sovereign initiative being driven by Government as shareholder.
“These are the two biggest investments that we’re currently looking at, and their biggest components are also addressing the state of the infrastructure. Of course, there is the component of the capacity. These are the two major inputs into these investments. So we still seek more.”
Eng Gurure said NRZ’s balance sheet had not been performing, making it difficult to attract investment on its own.
“Remember, it’s an open secret. Our balance sheet hasn’t been performing for quite some time, although through MIF (Mutapa Investment Fund), there are sizable strides to actually work on cleaning this balance sheet. Because as an entity on our own, it’s very difficult to attract that investment. So we need the guarantees from the shareholder,” he said.
He welcomed suggestions to leverage NRZ’s vast land holdings across the country to create a proper balance sheet that could be used to borrow.
