Forex shortages stall NRZ/Russia deal

BY MTHANDAZO NYONI

FOREIGN currency shortages have reportedly stalled a deal between the National Railways of Zimbabwe (NRZ) and Union Wagons of Russia (UWR) for the supply of wagons and locomotives, an official has said.

Last year, NRZ board chairman Martin Dinha told the State media that NRZ had signed the deal with UWR for the supply of 5 000 wagons and 70 locomotives, adding that the first batch of 100 wagons was expected to arrive in the country this month.

However, Dinha was singing a different chorus last week.

“So our dilemma is that we must quickly look for foreign currency to pay for the wagons, the down payment. That’s where we are at the moment. Once we raise the money and pay US$1,5 million, we will secure our first consignment of 100 wagons.”

The deal, according to Dinha, was meant to capacitate NRZ, which currently has only about 3 500 wagons.

At its peak in the 1990s, the company used to move about 14,4 million tonnes of freight against an installed capacity of 18 million.

Last year, it moved a paltry 2,8 million tonnes of freight.

The parastatal requires about US$1,9 billion for its recapitalisation programme and rehabilitation of its track, information communication technology and acquisition of new wagons and locomotives.

Previous efforts to revamp the rail transporter failed to bear fruit due to lack of seriousness on the part of the major shareholder — government.

Last year, government cancelled a US$400 million NRZ recapitalisation programme signed two years ago between NRZ and the Diaspora Infrastructure Development Group after the latter reportedly failed to comply with contractual timelines.

Meanwhile, NRZ general manager Lewis Mukwada said the parastatal grossed more than $400 million in revenue in 2019 after moving about 2,8 million tonnes of freight.

“In terms of volumes, we have been on an upward trend. We did 2,7 million tonnes in 2016; 3,1 million in 2017 and 3,4 million in 2018 and last year we had expected to maintain that trajectory, but we ran into a number of challenges,” he said.

“Our performance is down to about 2,7 or 2,8 million tonnes. We are still finalising the figures, but we have regressed in terms of the previous trajectory that we have been following. Financially, in terms of our projections, subject to confirmation by external auditors once our accounts have been audited, on total revenue we are looking at over $400 million,” he said.

Mukwada said total expenditure, without exchange losses, was $388 million.

“Previously, we have been trading in the negative in terms of gross profit. Last year we had a gross profit rate of 27%, but there are quite a number of distortions that come with inflation.”

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