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Oliver Kazunga Senior Business Reporter
NATIONAL Railways of Zimbabwe (NRZ) board chairman Larry Mavima says discussions on the recapitalisation of the troubled parastatal would be completed by year end. NRZ performance remains negative as it struggles to clear a legacy debt of about $144 million owed to different creditors. The parastatal requires about $1,9 billion in the long-term to be fully revitalised and transformed.

Mavima told Business Chronicle that the firm’s recapitalisation has started with unsolicited offers that the board and management were considering.

“Our turnaround strategy basically relates to recapitalisation. There’s no doubt that we’ll be able to add value to NRZ to turn it around through recapitalisation so that for example, its infrastructure relating to signal equipment and our workshop is upgraded,” he said.

“The recapitalisation has already started with unsolicited offers, which we’re also considering but we want something methodical and transparent. By end of the year, we should have significantly moved in to conclude the recapitalisation of NRZ.”

Mavima said options available for NRZ recapitalisation include Public Private Partnership, joint venture and a loan or a combination of the above strategies. At present, the national railways is engaged with the Development Bank of Southern Africa for a $650 million package.

Mavima said part of their turnaround strategy also relates to rightsizing in terms of employees in relation to business available. Last month, over 4,000 NRZ employees embarked on industrial action demanding their 15-month unpaid salaries.

The industrial action has spilled to the courts and judgement in terms of the show cause order is expected today. The railway company, which is facing challenges such as ageing infrastructure and equipment that has surpassed its designed span, vandalism, huge debt and lack of cheap credit lines for retooling reportedly owes workers about $68 million.