Turkish firm makes headway in NRZ deal

The NRZ’s facilities have outlived their lifespan

THE National Railways of Zimbabwe (NRZ) says Turkish investor Yapi Merkezi, which plans to recapitalise and modernise its railway system, has completed a feasibility study on the project.

In 2021, the two sides signed a memorandum of understanding to work together in the recapitalisation and modernisation of the rail network.

According to the agreement, Yapi Merkezi will bankroll the project and provide expertise for repairing rail tracks with the line linking Hwange to Harare getting priority.

Most industries’ coal-fired plants get their coal from several mines in Hwange.

The firms agreed that the funding would also be used for acquiring new coaches and wagons.

There had been reports that Yapi Merkezi had developed cold feet and the deal had collapsed.

But in an interview with Standardbusiness, NRZ spokesman, Andrew Kunambura said the deal was on track and that Yapi Merkezi would be submitting the study soon.

“The Turks did not pull out,” Kunambura said.

“They conducted a feasibility study, which has since been completed and is awaiting presentation to NRZ for consideration.”

The NRZ facilities have outlived their lifespan and officials say a complete overhaul would be vital to rebuild operation.

NRZ last acquired wagons over 30 years ago.

The government, according to a report compiled by parliament, has not been funding NRZ through the public sector investment programme (PSIP).

It said PSIP funding had been devoted to bankroll Zimbabwe’s highways and the aviation sector at the expense of NRZ.

Government controls full shareholding in NRZ.

The report notes that the NRZ received a $200 million PSIP budget for 2021, but it was not distributed until the fourth quarter of that year, by which time inflation had eroded its purchasing power.

The NRZ railway network spans 2 760 km.

The report said about 10% of the distance is covered by 67 cautions which affects the flow of traffic.

“The lack of recapitalisation in both equipment and infrastructure has affected the company’s performance, which has seen business volumes coming down, from the 12 million tonnes annually in the 1990s to current level of 2,3 million tonnes,” it said.

Kunambura declined to comment on a legal suit filed by previous suitor Diaspora Infrastructure Development Group (DIDG) over the cancellation of a deal that was expected to provide funding for recapitalisation.

Cabinet cancelled the US$400 million deal, which had been clinched in 2018.

Authorities said at the time that DIDG had no capacity to fund the project.

Donovan Chimhandamba chairman of DIDG, told Standardbusiness that the group will evaluate the country's economic climate to decide whether it is still wise to pursue its US$236 million case against NRZ over the termination.

“As you are aware, we filed a declarator in the High Court for an order declaring that the conduct of the NRZ was unlawful,” he said.

“The lawsuit is still pending in our courts. It must be highlighted and understood that we did not seek damages claim against the NRZ.

“We don't believe in a litigious process especially against our own government or the NRZ, when it rather needs support to rebuild into the modern era of rail logistics.

“We definitely don't believe one can implement the NRZ project while at the same time in court.

“In fact, a lot of things have since changed; Covid-19 happened, ministry leadership has changed, regional logistics infrastructure surrounding Zimbabwe has also since changed and the rail industry has seen some consolidations, rationalisations while rail majors have changed their strategic outlook and business strategies.

“So, DIDG has to consider these and assess whether it is still strategic for it to pursue the lawsuit and also consider at the end of the day what's best in the interests of our beloved country and NRZ in particular.”

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