Tendai Mugabe, Harare Bureau
Cabinet has ordered the retendering of the National Railways of Zimbabwe recapitalisation project following the cancellation of the US$400 million deal last month.
The deal, involving the Diaspora Infrastructure Development Group (DIDG) and Transnet was cancelled after DIDG failed to provide proof of funding for almost two years.
Already as Zimbabwe moves ahead, a firm deal with a Russian company to provide wagons and locomotives has been signed, with the first 100 wagons expected to arrive in January.
The DIDG-Transnet deal with NRZ was cancelled after the consortium failed to meet contractual timelines two years after winning the tender, principally failing to provide proof of funding despite repeated enquiries from Government.
DIDG was given a six-month grace period to provide the proof of funding which again lapsed, leaving Government with no option except to cancel the tender.
It also emerged that DIDG had won the tender using the financial books of Transnet but they later presented a funding structure based on funds sourced internationally, which excluded Transnet. The exclusion of Transnet complicated the deal, raising legal issues to the initial contract.
Several foreign investors are already expressing interest in Zimbabwe’s rail sector.
Last month NRZ signed the new deal with Union Wagons of Russia for the supply of wagons and locomotives while Indonesia had also expressed strong interest to invest in the same sector.
Under the Russian deal, NRZ is expecting to boost its capacity utilisation through the supply of 5 000 wagons.
The first 100 wagons are expected in January next year at a cost of US$10 million.
Transport and Infrastructural Development Minister Joel Biggie Matiza said that the recapitalisation tender would be flighted soon.
He said recapitalisation of NRZ was key to the revival of the industry as it would facilitate bulk movement of goods and people.
“We are going to retender the project as directed by Cabinet. Processes are already underway to ensure that we flight another tender. By next week, I will have full details on how much ground has been covered in this regard.
“Recapitalisation of our national railway is key to the revival of our industry. It is also in line with the attainment of the targets that we have set for ourselves in line with Vision 2030,” said Minister Matiza.
He said a vibrant railway system was key in the transportation of minerals from the mines and agricultural produce to ports such as Beira.
Information gathered showed that DIDG was trying to circumvent Government processes in implementation of its deal with NRZ.
It is reliably understood that DIDG by-passed the parent Ministry of Transport and Infrastructure Development and Government financial advisors Deloitte and Touche to validate its funding structure with Treasury.
The funding structure that DIDG wanted Treasury to validate excluded Transnet and had no input from the Ministry of Transport and Infrastructure and the Government financial advisors.