Chronicle Editor
Oliver Kazunga, Senior Business Reporter
THE National Railways of Zimbabwe (NRZ) is working on a framework to reduce wagons and locomotives hired from third parties as part of a broader scope to save the organisation millions of dollars in foreign currency.
Due to resource gaps NRZ faced in recent years, the parastatal had resorted to leasing equipment such as locomotives, wagons and passenger coaches.
For example, in 2018 the country’s strategic transporter entered into an interim arrangement with South Africa’s railways operator, Transnet, to lease 13 locomotives, 34 passenger coaches and 200 wagons.
NRZ acting general manager, Mrs Respina Zinyanduko, said NRZ, which is undergoing a restructuring exercise, was pushed by historic challenges to hire some equipment like locomotives from third parties.
“So, we did an analysis of the profitability of these locomotives and the analysis of each and every agreement that we have. Those that were not profitable, we terminated and we have since returned to Transnet five locomotives that were constantly breaking down,” she said.
Mrs Zinyanduko said each wagon being leased from Transnet was being paid US$32 a day and NRZ was working on terminating the lease agreement with Transnet in order to save the forex it is spending on wagons hire.
“If you do your calculations, we need a very good turnaround of those wagons for us to realise profit. In most cases some of the challenges that we face when moving cargo out of the country have to do with interchange which is beyond NRZ’s control,” she said.
For example, when moving cargo to Beira, CFM another State-owned rail operator in Mozambique would take time to offload and as a result NRZ ends up operating at a loss because of hired equipment.
“So that’s why we are looking at the option of having our own export-fit wagons and we have already started that project. We have also managed to repair about 100 fuel tankers,” said Ms Zinyanduko.
She said for the past few years NRZ has been using CFM tankers and as such was not earning as much revenue hence it decided to invest in fuel tankers.
NRZ requires US$400 million for recapitalisation in the short-term and was presently seeking a strategic partner.
In 2019, Cabinet cancelled the US$400 million that NRZ and the Diaspora Infrastructure Development Group (DIDG)/ Transnet Consortium had entered into in 2017.
This was after DIDG failed to provide proof of funding.
Following the termination of the project, DIDG filed a US$236 million lawsuit against NRZ. However, DIDG has pleaded with the Government to reconsider resuscitating its US$400 million NRZ recapitalisation project.
Mrs Zinyanduko said they expect to save a lot of foreign currency by reducing the number of hired equipment.
“Going forward, we expect that through this move (reducing the number of hired equipment) we are going to reduce significantly our indebtedness to Transnet because these locos were accruing rentals on a monthly basis,” she said.
At the moment, she said NRZ has 160 wagons that were being hired from South Africa and the rail entity has begun making its own wagons export-fit.
Mrs Zinyanduko said 30 wagons have already been made export-fit and dispatched to operations. NRZ targets to have 200 export-fit wagons by end of January next year. – @KazungaOliver.
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