State Enterprises and Parastatals minister Gordon Moyo says the proposed unbundling of ailing National Railways of Zimbabwe (NRZ) is a “nightmare” as there are few investors that have expressed interest.
Moyo said NRZ, vital for the revival of the economy faced by several operational challenges, would be split into three entities for easy management.
He said the parastatal posed a major headache to the government.
Speaking at the Zimbabwe International Trade Fair grounds in Bulawayo on Friday, Moyo said though unbundling plans were in place, they had not generated much interest in the market.
“The thinking in the government is splitting NRZ into three entities. We are looking at splitting it into infrastructure, passenger and freight companies. That it would be easy to manage it,” said Moyo.
“For now that’s our plan, but we still have a nightmare because we have not made meaningful attraction.”
Under the 2010-2015 Medium Term Plan (MTP), which the government is using to benchmark economic recovery, the State intends to review current regulatory policies governing railways in a move that could bring competition to the loss-making NRZ.
The plan says the government is considering “a separate body to own/operate infrastructure while the rail services are opened up to a number of sector players for a fee”.
The move would end the ailing company’s monopoly which NRZ has been enjoying for decades despite facing numerous challenges.
MTP proposes a massive rehabilitation of all railway infrastructure, which has been paralysed by obsolete communication systems, worn-out rail lines and theft of more than three-quarters of copper wire lines, which has effectively paralysed the signal and communication systems across the country.
The rail infrastructure has deteriorated markedly over the past decade when the country experienced economic meltdown leading to sharp decline in service levels from a design capacity of 18 million tonnes per year to around 5,3 million tonnes currently.
Zimbabwe’s rail network, once a hub of the regional transport network, stretches for 3 077km.
So dilapidated is the network the World Bank in December recommended the closure of some lines.
When asked on major problems dragging down the parastatal, Moyo said: “NRZ is a big entity and problems are huge. The equipment and infrastructure is dilapidated. There is a big debt overhang which is affecting operations.
“The other issue is of employees. There is no synchronisation between the work at hand and number of people employed. Management is also an issue.
“NRZ has been operating without a properly constituted board, so who is making decisions?
“The board makes decisions that apply immediately and without it there is micro-management of the entity.”