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NRZ courting Turkey, Indonesia investors

by Staff reporter
27 Nov 2020 at 17:29hrs | Views
The National Railways of Zimbabwe (NRZ) is courting investors from Turkey, Russia and Indonesia as it continues with efforts to restructure its operations.
 
Despite demand for its services, management and the board say the giant railway company is facing viability constraints due to an ageing fleet and lack of capitalisation. Constant equipment breakdowns coupled with a tired railway system have forced the company to continuously incur higher overhead costs that bleed the little revenue generated.
 
Railways by their nature are capital intensive and increasingly need to attract financing from the private sector to be successful. However, prospects of successful recapitalisation have remained dim since the collapse of the US$400 million Diaspora Infrastructure Development Group (DIDG) Transnet deal last year.  But now the Advocate Martin Dinha-led NRZ board is pushing to restructure the company and hopes to ride on partnerships with counterparts in countries such as Turkey, Russia and Indonesia to turn around its fortunes.
 
While still pursuing increased Government support for NRZ, Dinha, who was in Bulawayo on a tour of the railway's mechanical workshops on Tuesday by independent commissioners, said they were expecting significant mileage from foreign business alliances. The NRZ board was in Istanbul, Turkey last week to explore partnership opportunities on an invitation by the Zimbabwe Ambassador to Turkey, Alfred Mutiwazuka. Dinha said the Turkey engagement was a low-hanging fruit in their pursuit of modernising and transforming NRZ.   
 
"The Turkish visit brought with it very exciting opportunities. We will be going there to sign MoUs. Very soon the Turkish businesspeople would be coming to Zimbabwe and we will be hosting them as the National Railways of Zimbabwe," he said.
 
"They have far advanced railway systems. Turkey Railways has a very developed system. They have travelled our journey; they went  through what we are going through and so they have tailor-made solutions to our problems.
 
"They have a whole industry that manufactures coaches, locomotives, wagons and everything and they are very experienced in rail construction. So, we went there to tap into that aspect and what we want is to have a quantum leap."
 
Dinha said the NRZ was also pursuing other engagements with Indonesia, Russia and China where the company is discussing partnerships with peers in those countries.
 
"We have acquired wagons from Russia, and we are awaiting payment of US$1.5 million to be able to get our delivery," he said.
 
"We also have partnerships in China. So, it is a whole package, but we are looking at friendly countries that can assist us on government to government deals or private sector joint venture deals."
 
The board chair appealed for increased Government support saying NRZ must move with speed to redeem years of stagnation. A railway transformation is not a small matter, he said adding: "It's critical for the economy to take off in line with the President's vision 2030".
 
Due to inadequate capacity Dinha said NRZ was losing a lot of business. The company is only operating at around 30 percent of its full capacity and needs support to acquire new 41 locomotives, 300 wagons and 300 coaches, which costs an estimated US2bn. Under its strategic development plan, the NRZ board is targeting to have transformed the company by 2025.
 
"What we need for railways basically are the tools for trade, wagons, locomotives and coaches. We also need a complete overhaul of the railway system. The 2700km of our permanent railway needs upgrade," he said. As a result of weak operations, Dinha said NRZ is failing to service its clients effectively with its passenger train service also making losses.

Source - finx

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