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Business Reporter
THE National Railways of Zimbabwe (NRZ) and DIDG/Transnet are expected to reach financial closure on the $400 million railways firm’s recapitalisation deal by mid next year.

In July, the NRZ, whose infrastructure includes rail and locomotives, identified an investor DIDG/Transnet to recapitalise the parastatal.

In a presentation to delegates attending the Ministry of Transport and Infrastructural Development strategic planning workshop in Bulawayo this week, NRZ general manager Engineer Lewis Mukwada said:

“We are negotiating (with DIDG/Transnet) and we are expecting that by mid-year next year we should have concluded everything (financial closure) and we should be implementing.

“In so far as the recapitalisation itself is concerned, you may be aware that we were granted formal approval to go out on open tender by Cabinet on 4 April and we floated the tender . . . finally on the 16th of October we got Cabinet approval to negotiate with the shortlisted bidder”.

Eng Mukwada said after the negotiations, they still need to go back to Cabinet to report on progress about the deal before final approval by Government.

He said part of the initiative was for NRZ to approach the Government for warehousing of the firm’s legacy debt amounting to about $140 million.

“We owe Zimra (Zimbabwe Revenue Authority), employees, pension fund and a number of other bodies some money and we felt the investor could not come from such a scenario so the Government agreed to warehouse the debt. They didn’t agree to take-over the debt,” said Eng Mukwada.

Within the recapitalisation structure of NRZ, Eng Mukwada said the railways firm was planning to liquidate the debt Government has agreed to warehouse over a period of time.

“Currently, we are now working on a framework agreement which we hope to submit for approval before the end of November,” he said.

The recapitalisation process was initiated to restore NRZ’s operational capacity and to ensure it returns to profitability. The NRZ system has a capacity to carry over 18 million tonnes of freight annually but is currently moving less than four million tonnes.

The NRZ has a fleet of 168 locomotives, with 60 locos in service and more than 7000 wagons of which 3 512 are in use.