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Oliver Kazunga, Senior Business Reporter

THE National Railways of Zimbabwe (NRZ) has engaged Government seeking the retirement of a US$500 million legacy debt to enable the parastatal to attract investors and promote the turnaround initiative.

In 2017, the parastatal signed a US$400 million deal with the Diaspora Infrastructure Development Group (DIDG)/ Transnet consortium aimed at recapitalising operations and rehabilitating the parastatal’s infrastructure.

However, financial closure of the US$400 million project is yet to be finalised and Government has extended the framework agreement of the deal to DIDG/Transnet by six months to August though without the initial exclusivity clause.

In a recent interview after a tour of NRZ workshops and infrastructure by Transport and Infrastructural Development Minister, Joel Biggie Matiza, the parastatal’s board chairman, Advocate Martin Dinha, said: 

“Primarily, Government must retire our debts as has been done with Air Zimbabwe and others so that we start on a new slate. We hope if we are able to remove from our balance sheet money that has accumulated over time amounting to US$500 million that will allow us to attract investors and this is one of the issues that we have discussed with the Minister (Biggie Matiza) during our meetings.”

For many years, since 1980, Adv Dinha said NRZ has not received an investment or input from Government as shareholders of the parastatal although there has been “very marginal” support in terms of the Public Sector Investment Programme.

The NRZ recapitalisation strategy aims to avoid dependence on Government and the funding structure being negotiated with DIDG/Transnet does not call for Government sovereign guarantees and neither does it depend on the railways company’s balance sheet to secure borrowings. — @okazunga