Transnet‘s deal to recapitalise and provide technical support to the struggling and dilapidated National Railways of Zimbabwe (NRZ), scuttled by succession fights in Zanu-PF, is now expected to be finalised following the swearing in of new Zimbabwean Prezident Emmerson Mnangagwa last week.
The rail and logistics firm won the bid to recapitalise the Zimbabwean railways parastatal to the tune of $400 million recently. However, it faltered after politicians under the Zanu-PF G40 faction scuttled it because it was deemed to be a project under Mnangagwa’s Lacoste faction.
NRZ chairperson Larry Mavima, a close confidant of Mnangagwa, said on Monday that the deal will now be finalised. He expects it to get off the ground by the first quarter of next year.
“Things (developments on the NRZ recapitalisation by Transnet) will move faster, if you remember the first submission of the recapitalisation deal of NRZ to Cabinet was scuttled by G40 people because they thought it was a Team Lacoste project, but it was a project for Zimbabwe and the people of Zimbabwe,” Mavima was quoted saying by the NewsDay publication in Zimbabwe.
He said “the new cabinet will expedite the processes” under Mnangagwa’s leadership. The new Zimbabwean president is expected to announce a new cabinet this week, with sources saying Zimbabwe’s 2018 budget will be announced next week.
‘Hit the ground running’ to right economy
Mnangagwa last Friday said he welcomed investments, and that he would make them safe and prioritise investment promotion. He also said he was aware that he had to hit the ground running in terms of righting an economy that is struggling and urgently requires key policy decisions.
“We are almost there in terms of the agreement as we have structured with DIDG (Diaspora Infrastructure Development Group) Transnet and we hope that by the beginning of the first quarter that project will be implemented,” highlighted Mavima.
NRZ has struggled for viability amid dilapidated infrastructure and outdated signal equipment. The parastatal aims to move 3.1 million tonnes this year while it expects to ship about four million tonnes in 2018.
In the year to end-December 2016, NRZ incurred a net loss of $59.7 million compared to a loss of $40.8 million in 2015. This bloated the NRZ’s cumulative loss for the period to $336.2 million after its net current liability position widened to $219 million.
Zimbabwe Auditor General Mildred Chiri said in a report on NRZ in June that it has long outstanding prepayments made to suppliers amounting to $1.4 million, which raises the risk of financial loss for the company.