Minister Joram Gumbo
Oliver Kazunga, Senior Business Reporter
THE Government yesterday commissioned 31 state-of-the art wagons worth $2,9 million for the National Railways of Zimbabwe (NRZ) in Bulawayo in a bold move meant to boost the parastatal’s operational capacity.
Transport and Infrastructural Development Minister Dr Joram Gumbo who presided over the colourful event said the Government procured the new wagons from China Railway Rolling Stock Company (CRRC).
“It is indeed a great honour and privilege to have been invited to commission the 31 open-top, high-sided wagons, which in my view, will immediately enhance the capacity of the NRZ,” said Dr Gumbo, adding that the parastatal was strategic in the country’s economic revival, growth and development.
“It is, however, a matter of regret that the NRZ is currently debilitated from doing so by a number of challenges. NRZ has been facing operational challenges in the past few years as its capacity has declined significantly, hence the urgent need for recapitalisation. I am therefore pleased to be commissioning these wagons as part of initiatives to immediately boost its capacity to move bulk cargo.”
In line with Zim-Asset, the minister said NRZ infrastructure needs a major overhaul to bring it to its original capacity and efficiency levels and up-to-date technological improvements.
Dr Gumbo expressed optimism that through a comprehensive recapitalisation programme NRZ infrastructure would be overhauled and rehabilitated.
He said the Government has given clear mandates to various boards of strategic State enterprises and parastatals on the need to revive them within the shortest possible timeframes.
“As the parent ministry, we are happy with the progress that the NRZ board has made regarding the turnaround programme, which is anchored on the recapitalisation of the organisation. On our part, we undertake to expedite all Government approvals, as may be required from time to time,” said Dr Gumbo.
He said the Government was concerned about issues of good corporate governance and value for money in all critical decisions taken by State entities and parastatals.
“Let me take this opportunity to commend the NRZ board and management for acquiring these wagons, out of an initial capital outlay made in 2008,” he said.
Dr Gumbo commended the Chinese government for its continued friendship and cooperation with Zimbabwe. He noted that it was out of such cordial relations between the two countries that had seen CRRC manufacturing the 31 wagons as per NRZ specifications.
As a shareholder in NRZ, he said the Government through his ministry has the unenviable task of balancing the roles of both road and rail.
“The country risks losing both rail and road capabilities through under- utilisation of rail, as a result of the diversion of rail- friendly business to road, while at the same time the road network is over-used leading to its fast deterioration, congestion, and increased frequency of accidents and loss of life.
“Through the implementation of the recently commissioned transportation master plan, we hope to shift significant portions of bulk cargo back to rail, and be able to save the costs of maintaining the road network. While this can be achieved in the long run, we are immediately faced with the challenge of attracting sound partners or financiers to the NRZ project; hence the subject of ring-fencing of certain bulk cargo to NRZ,” he said.
The minister said the ring fencing of cargo should under ordinary circumstances be enforced through moral suasion.
However, Dr Gumbo said at times it may be necessary to legislate and assured captains of industry that the Government would put in place necessary measures to guard against any monopolistic tendencies by NRZ in terms of overcharging and offering poor service.
Speaking at the same occasion, NRZ board chairman Mr Larry Mavima said the railways would go through phased restoration of operational capacity, rehabilitation, repairs and renewal of traction and rolling stock, tracks, signalling and telecommunications infrastructure, among others.
“At this stage, we are also convinced that ‘bite size’ investments will not choke the organisation when it comes to loan repayments, as they will allow business to grow concurrently with the capacity availed,” he said.
As part of efforts to recapitalise NRZ, he said the parastatal and its transaction advisor appointed in June this year, were developing a project information memorandum, a request for proposal, and a prospectus that would serve as a marketing document to attract potential financiers. “To ensure bankability of the project, bulk business volumes have become crucial — even in our preliminary discussion with the transaction advisor, self-liquidating arrangements often backed by off-take agreements or some ring-fencing arrangements are more appealing to investors, as guarantee that the loan can be paid back,” he said. – @okazunga