8 September 2017

Zimbabwe: Govt to Assume $348m NRZ Debt

Photo: Daily News
(file photo).

GOVERNMENT has made a commitment to assume $348 million National Railways of Zimbabwe (NRZ) debt with a view of laying a strong foundation for the new investors to start on a new chapter.

The assumption of debts will free NRZ's balance sheet and enable the investors to concentrate on new projects which include the refurbishment of the current fleet and purchasing of new wagons.

Talks for possible debt takeover with the Office of the President and Cabinet, the Ministry of Finance and Economic Development, the Ministry of Transport, the State Enterprises Restructuring Agency and the Attorney-General's Office are still underway.

NRZ public relations manager Nyasha Maravanyika told The Herald Business that though the Government is yet to finalise the debt assumption deal, stakeholders are buoyant that a debt free and capitalised NRZ will go a long way in reviving the parastatal.

"Government has made a commitment to take up the NRZ debt in a bid to make sure that new partners are off to a perfect new start with no debts. Negotiations are underway and going on well.

"We need the proposed $400 million for capitalisation purposes to go to new projects to steady our ship which hasn't been stable for quite some time now," said Mr Maravanyika.

Diaspora Infrastructure Development Group (DIDG/Transnet), which intends to roll out $400 million on acquisition of new locomotives and wagons, is expected to bring their proposals from mid-September going forward to gauge the viability of the deal.

The proposed deal was that $150 million will be spent in the first year to buy 24 mainline locomotives and 13 rail shunters or shunting locomotives.

Twenty locomotives that are part of the current fleet will be refurbished. Of the 160 locomotives the NRZ has, 60 are running. Overall, only 20 are reliable.

A $100 million chunk will be used to modernise and refurbish the centralised train control and signalling system and $30 million will be deployed to equipping workshops and revamping the processing system through information communication technologies.

The remainder will be used for improving operational efficiencies as part of efforts to bring the parastatal back to its feet.

He said: "We are at a stage where we are critically looking into the proposals by the consortium where we want to get some specifics correct. We need the clarifications on some specific issues as they are stakeholders like Finance Ministry and other important stakeholders in Government.

"These proposals have to go through parliament questioning on specific issues and after this stage we will discuss contract issues and these process involves Deloitte and Touch whom were appointed our advisors in May last year.

"On September 13 we should be able to know terms and conditions of the deal in an efforts to check its viability. We expect that recapitalisation will be done by December this year."

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