National Railways of Zimbabwe expects financial closure on $400 million deal

The National Railways of Zimbabwe (NRZ) is expecting to reach financial closure on the $400 million deal with Transnet/ Diaspora Investment Development Group (DIDG) consortium by June 2018, chairman Larry Mavima has said.

The South African logistics firm and DIDG, a group of Zimbabwean investors living abroad won the tender to recapitalise the government-owned National Railways of Zimbabwe (NRZ) with $400 million in July last year but ran into delays caused by what officials said were losing bidders trying to muscle in on the deal with the blessing of the previous regime of former president Robert Mugabe.

Mugabe was forced to resign by the military in November last year after 37 years in power.

Under the deal, the Transnet/DIDG consortium will provide funding to acquire and refurbish wagons, upgrade the company’s information communication technology and signalling systems and increase NRZ’s capacity to move goods.

“I am pleased to report that the framework agreement that set out key principles along which the deal would be structured has been completed by both parties. We are now working on the joint venture agreement and other agreements with a target of reaching financial closure by June 2018,” said Mahima during the commissioning of the NRZ equipment today.

The locomotives, wagons and coaches delivered by the consortium were leased but new equipment was expected soon, Gumbo said.

NRZ general manager, Lewis Mukwada said the equipment was not part of the $400 million deal.

“The $400 million will only be released after we conclude the financial structures when we reach financial closure,” he said

Mukwada said once all the equipment has been received they would be able to uplift an additional 100 000 tonnes a month of chrome ore and ferrochrome, which will generate an additional $1.1 million a month as revenue to NRZ.

Mnangagwa said under the deal, NRZ would receive 13 locomotives, 200 wagons and 34 passenger coaches to address key resource gaps in its operations, as an interim solution while negotiations for the recapitalisation programme are being finalised.

Mnangagwa today commissioned seven locomotives, 150 wagons and seven coaches at NRZ.

More equipment will be delivered into the country by April 2018.

He urged all parties involved to move swiftly to conclude outstanding matters for a win-win outcome.

“I urge all concerned parties to move swiftly, and meticulously to conclude outstanding matters for a win-win outcome,” Mnangagwa said. – The Source

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