Oliver Kazunga, Senior Business Reporter
NEGOTIATORS to the $400 million National Railways of Zimbabwe (NRZ) recapitalisation project met this week to discuss some of the hurdles stalling progress and committed to ensuring speedy implementation of the deal.
In 2017, NRZ and the Diaspora Infrastructure Development Group/Transnet consortium signed the $400 million deal meant to recapitalise and rehabilitate Zimbabwe’s ailing railways firm, which requires about $1,9 billion in the long-term to fully recapitalise operations.
In the past, some media reports have suggested that progress towards financial closure of the deal was sluggish due to an obscure legal process between NRZ and Transnet of South Africa.
Speaking by telephone yesterday, NRZ public relations manager Mr Maravanyika said the meeting, which was held in Harare on Monday, was more of a confidence booster among the parties involved in the deal.
“The meeting was mainly focusing on commitment from all parties, it was more of a confidence booster.
I understand you have heard some media reports saying the NRZ deal is in limbo. So, what happened on Monday is that all parties including the South African Minister of Transport (Mr Blade Nzimande) also came, the board of Transnet and the board of NRZ and its executive as well as members of the deal’s negotiating team who are also from other Government departments here in Zimbabwe as well as the financial advisor. So it was a confidence booster for all parties,” he said.
Mr Maravanyika said the issues that were discussed during the meeting were those already on the negotiating table. “It will be folly for us to pre-empt what the negotiators have been discussing but I think for us we are all aware of the issues around the deal. The issues to do with the deal itself in terms of how it will go, issues to do with the NRZ debt, reconciliation of legal issues from both ends that is Zimbabwe and South Africa, how we can come up with a proper workable structure for the deal. The idea was to show the commitment mainly from all the parties,” he said.
On legal due diligence NRZ was making on Transnet, Mr Maravanyika said they were happy with progress that was there, adding that the fact that the negotiating teams continue to meet to scrutinise and look at issues, shows that there was progress.
“If there wasn’t any progress definitely we could have seen probably a change of action from the teams on the negotiating table. But we are happy with the progress because the negotiations are ongoing,” he said.
Asked about the appointment of a lead arranger, Mr Maravanyika said: “This deal has got the technical side and the financial side. As you heard from our General Manager (Engineer Lewis Mukwada) during a press reception in Bulawayo recently, the NRZ with its balance sheet cannot attract any investor.
“So, for us, if the negotiators have agreed to go that route (appointing a lead arranger), we understand that they know better in terms of how the funds should be sourced.
“If the financial and banking sector are focusing on that route for us I think it’s a welcome development because there will be progress for us in making sure that we have a platform where this $400 million can be sourced from.”
Meanwhile, seven financiers among them CBZ, Ecobank Kenya, Standard Bank of South Africa, and Amalgamated Banks of South Africa (Absa) have shown interest to fund the mega-investment. — @okazunga