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Govt to extend NRZ deal by 6 months

Africa Moyo Senior Business Reporter
Government is understood to have agreed to extend the framework agreement for the US$400 million recapitalisation of the National Railways of Zimbabwe (NRZ) by a further six months, to enable finalisation of outstanding issues.

Yesterday, Foreign Affairs and International Trade Minister Dr Sibusiso Moyo, acknowledged in his welcome remarks during the plenary opening ceremony of the Ministerial Meeting of Third Session of the Zimbabwe-South Africa Bi-National Commission (BNC); that the extension of the framework agreement would clear the way for the NRZ recapitalisation project to pace up.

Dr Moyo, who was the Head of Zimbabwe’s Ministerial Delegation, said both parties are keen to conclude the US$400 million deal whose tender was won by the Diaspora Infrastructure Development Group (DIDG) and Transnet of South Africa.

“Their (DIDG and Transnet) anxiety to receive official confirmation that the Zimbabwean side will give the required six months extension of the framework agreement . . . shall finally pave the way for work on the project to progress smoothly,” said Dr Moyo.

Close sources have told The Herald Business that DIDG and Transnet applied for the extension on February 12 this year.

While six months is seen as a “tight” deadline, there is a feeling among DIDG and Transnet officials that “reasonable ground” could be covered, or potentially have the process concluded.

The sources said the main objective for seeking an extension is to get to “irrevocable binding term-sheets and usher in the Joint Venture Agreement”.

DIDG and Transnet head honchos were recently in Zimbabwe to engage Government officials with a view to exploring avenues that would lead to closure of the NRZ recapitalisation deal.

Said Dr Moyo: “They have met just last month in Harare to iron out the hurdles that are impeding the conclusion of the recapitalisation project of the National Railways of Zimbabwe.

“And I am aware that the DIDG and Transnet board of directors (South Africa) accompanied by the Ambassador to Zimbabwe, His Excellency (Mphakama) Mbete, recently visited Zimbabwe to testify to the fact that they were committed to seeing out the transaction.

“I am happy to hear that also the Minister of Transport (of South Africa Dr Blade Nzimande) is ready to confer in writing the commitment of the South African government to the fact that Transnet is authorised and mandated to undertake this project.”

The NRZ recapitalisation deal involves delivery of 34 new locomotives, refurbishment of 28 locomotives, procurement of 200 new wagons and refurbishment of 768 wagons.

DIDG and Transnet have cobbled an interim solution aimed at providing 14 locomotives, 200 wagons and 34 passenger coaches. In the first four months of last year, NRZ moved 771 000 tonnes of freight compared to 679 000 tonnes in the same period in 2016, as benefits of recapitalisation kicked-in.

Source:The Herald

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