MUTAPA Investment Fund (MIF) has tabled plans to revive the National Railways of Zimbabwe (NRZ) and ZUPCO through a hybrid approach which relies on internally generated resources and self-liquidating debt options.
Once revered as a regional transportation powerhouse, the NRZ has suffered major setbacks over the years due to neglect of maintenance, lacking spare parts, and overdue replacement of equipment.
The same circumstances have also bedevilled the Zimbabwe United Passenger Company (ZUPCO) which used to dominate most of the country's routes before plummeting to current levels of decline.
But in an update this week, MIF CEO Doctor John Mangudya unveiled plans to revive the two government-owned transport systems which are under the Fund's purview.
"With respect to NRZ, we have had an assessment of what is required. We have ascertained that four things are needed at NRZ. The first one is to sort out the cautions, which result in reduced speed of movement of cargo.
"The second part is to have the locomotives in place. To ferry cargo, say in Dinson, or any other company we need locomotives, the ones that pull the wagons, which are the third component and fourthly, we need signals," he said.
Mangudya said the NRZ needs to tap into the two major railway corridors -one covering Harare -Mutare -Machipanda -Beira; the one covers Harare -Daubuka Chicualacuala-Maputo and use the existing network to expand organically doing the feeder ones.
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He said one locomotive costs between US$3,5 million and US$4,5 million while wagons cost around US$100 000 meaning that for 10 locomotives you need about US$45 million.
"That is why we need long-term finance. But the whole idea is that we need to link the product movement to the payment because we are also trying to minimize debt to the Government and the nation of Zimbabwe.
"The debt should be self-liquidating. It means if you buy 10 locomotives and wagons, there should be enough off-takers of the service, who are the ones who will service the loan," he said.
The former RBZ governor said a similar situation applies to ZUPCO which needs more buses.
"The one division that needs a bit of support at Zupco is the urban transport. So, we are looking at using money generated from the intercity division to support the urban division and reduce the burden on the fiscus," added Mangudya.
