12 September 2012

Zambia: New Management Takes Over ZRL

NEW management has formerly taken over the running of Zambia Railways Limited (ZRL), formerly Railway Systems of Zambia (RSZ) with a pledge to start overhauling the railway network within the next two weeks.

The new management, led by Managing Director Knox Karima, has also assured that the 902 workers that had been taken on board by RSZ would be retained under ZRL and all other formalities relating to this would be handled administratively.

Management has since pledged that it will deliver to the expectations of President Michael Sata and the people of Zambia.

In a boardroom meeting yesterday that lasted over two-hours, Mr Karima announced that the company's head office would immediately revert to Kabwe. All other logistics including workers, that were in place before the concession agreement would be positioned so that Kabwe runs efficiently as the new headquarters.

Mr Karima convened a meeting with his team to map out a strategy following the long-awaited but anticipated revocation of the agreement barely 24 hours after Finance Minister, Alexander Chikwanda announced Government's compulsory acquisition of the concession rights of RSZ.

"We shall not disappoint and we shall not fail. The decision taken by the Government is not political but economical. ZRL was sinking, we have to revive its operations and we should not fail the President who has entrusted us with this responsibility and the Zambians at large. We need to show even to the outside world that we can manage our affairs," Mr Karima said.

He said the railway network needed, as an immediate measure, an urgent overhaul which exercise should have been done just after RSZ took over management of the company in 2003.

Mr Karima revealed that four locomotives, out of which two where in the Democratic Republic of Congo (DRC) and another two in Zimbabwe, would have to be brought back to Zambia and that all arrangements should start immediately.

He further directed that no ZRL assets should be allowed to exit the country following Government's decision to revoke the concession agreement.

He further directed that ZRL should ensure that none of the customers under RSZ were lost as business transactions had already been entered into and deliveries would be met under the new management.

The meeting also agreed that all contractual obligations including those entered into with suppliers would have to be borne by RSZ.

He said a smooth transition as was the case when RSZ took over operating rights in 2003, would also apply, except that this was merely a reversed action.

Mr Karima, accompanied by Company Secretary, Nathaniel Inambao, met at the railway station office in Lusaka yesterday with other senior officials before addressing junior employees and assured them that "it was business-as-usual" but with a deeper determination to improve railway services.

On the background of Government assurance of support, Mr Karima said the railway operations would be resuscitated as the company was highly viable in view of increased tonnes of cargo that was entering the country and using road transport.

The concession of ZRL assets and operations was awarded to RSZ for a 20-year period in respect of freight business, and seven years for the passenger business. It covered the whole inter-mine railway network on the Copperbelt as well as the long haul railway from the Copperbelt to Livingstone.

Under RSZ, railway transportation had become costly to use as compared to road transportation, resulting in minimal or non-utilisation of rail transportation.

The ZRL management was scheduled to hold a meeting with RSZ management to agree on further details of the handover and a follow up was scheduled with Ministry of Transport, Works, Supply and Communications officials.

Mr Chikwanda said when announcing the revocation of the concession that Government's decision had been necessitated by the fact that RSZ had "blatantly" disregarded the provisions of the agreement and that further delays to take immediate action could have led to further destruction of the railway assets and making it even more costly to carry out the planned upgrade.

Government has since prepared resources for the continued operations and rehabilitation of the railway line.

Mr Chikwanda stated that the overall cost to the Government had been enormous and the sustainability of the railway transport of Zambia, had been generally been put at great risk as a result of the unsatisfactory performance of the concession.

Meanwhile former Works and Supply Minister, Andrew Kashita has welcomed the revocation of the concession agreement, saying the decision was long overdue.

Mr Kashita said in an interview in Lusaka yesterday that President Sata's Government had taken a bold decision which was in the interest of many Zambians.

"This decision has been long overdue, it is a timely and long overdue decision, I wonder how the MMD government, for almost 10 years failed to seek the loopholes in the arrangement," he said.

Mr Kashita said RSZ was a company of high standard with international recognition and it was not possible that they could fail to revamp the railway system since they were given the concession rights.

"It is good that the rot, has been stopped before it got worse, I agree with the decision taken. It is observed that Zambia's railway is the worst in the region. Moneys that have been spent to repair roads could have been diverted to other sectors," Mr Kashita said.

The Private Sector Development Association (PSDA) also backed the revocation saying the agreement did not work for the benefit of the country.

PSDA chairperson Yusuf Dodia said separately that RSZ hardly recapitalised the railway industry during the period they managed affairs on behalf of Zambians.

Mr Dodia called for a renewed plan to fully revive the railway business to benefit the country's economy.

He said lessons learnt from the exercise should place Government at a better stage of ensuring serious investors were brought in the country to help drive-forward national growth and not to slow it.

He said development of the country should not be slowed only because of a sluggish performance by one investor.

"This shows that we need to be serious with investors that we bring in to run national assets for us, as the case for RSZ, it showed that this agreement did not work for Zambia and they failed to manage. We are in a hurry to develop and we cannot allow to be slowed down just because of a non-performing investor," Mr Dodia said.

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