The Sunday Mail
There was talk that NRZ would buy locomotives from China, but, again, the deal never materialised. It died silently at NRZ headquarters — like the 2012 Chinese offer.
WHEN the Chinese were in town in 2012, they fed us very big dreams and sumptuous promises.
One of the choicest promises was the commitment made by the head of China Railways Corporation, Mr Zhao Guanfa, to build a modern railway line served by a bullet train between Harare and Bulawayo.
The envisaged US$1,2 billion project would have been completed, or would be nearing completion, had the deal been finalised around that time as it was a three-year undertaking.
It would have been extraordinarily convenient for commuters who transit to destinations between the country’s two biggest cities.
At the time, experts said a bullet train would take at least two hours to service the two cities.
China Railways Corporation is by no means a small business.
It has been involved in the Tanzania-Zambia Railway Project, Nigeria’s Lagos-Kano Railway Modernisation Project, Algeria East-West Expressway Project, Hong Kong West Rail, and the Turkey Istanbul Ankara Railway Reconstruction Project.
With assets of more than US$70 billion, it is beyond doubt that China Railways Corporation was more than capable to do complete the project.
By now, the local railways company should have at least been showing nascent signs of recovery.
But four years down the line, the blood letting continues at the National Railways of Zimbabwe.
The restive worker force is only but a symptom of a deep-seated crisis which, if left unattended, will sound the death knell for an institution that was once a remarkable business in Southern Africa.
Like a critically ill patient nearing death, NRZ has been made to suffer behind drawn curtains.
As is the case with most State-owned enterprises, the NRZ no longer widely publishes annual reports so that the nation knows what is going on behind those drawn curtains.
Wherever the parastatal’s statements of accounts are, they are largely hidden from the public.
So, while no one really knows the exact state of health of the business and what is going on there, everyone suspects that it is in dire straits.
Available statistics from scholars show that by January 2006, of the 175 locomotives available, an estimated 118 were overdue for service.
During the period, it also became increasingly difficult to replace most of the aged locomotives as sanctions made it impossible to replace the assets that were predominantly supplied by American industrial behemoths in the name of General Motors and General Electric.
It can only be assumed that the available fleet of locomotives has since dropped further.
There was talk that NRZ would buy locomotives from China, but, again, the deal never materialised. It died silently at NRZ headquarters — like the 2012 Chinese offer.
Also, a survey that was conducted in 2003 showed that a total of 2 744 wagons from a fleet of 10 713 were out of service at the time, while 1 823 high-sided iron wagons from a fleet of 6 837 were out of service.
Overall, it was generally noted than an estimated US$338 million was needed to replace the 4 500 wagons that had life-expired.
The same can also be said of passenger coaches.
One can therefore only assume that the current statistics of the parastatal are even grimmer.
But it is difficult to imagine how NRZ can fail to attract investors for such a viable business that can ably compete with other modes of transport.
The mining sector, which has been key to the economy, would obviously prefer to use rail over the expensive option of using road trucks, which are considered to be 28 percent more expensive than rail.
The fact that NRZ’s former customers such as Stuttafords, Glens and Inter Trans Mover, the Zimbabwe Power Company, Zimbabwe Sugar Sales, Ziscosteel and New Limpopo Projects Investment, Bindura Nickel Corporation, Zimasco, Triangle and Hippo made an undertaking to assist through paying for services using the US dollar during the hyper inflationary period before 2009 provides compelling evidence for a business case for rail operators.
For Zimbabwe to strategically position itself, especially in a region where economic blocs such as the Common Market for East and Southern Africa and the Southern African Development Community provide a market that is almost half the size of the continent, it has to leverage on its centrality in Southern Africa.
Observably, the country can be a logistics hub in Southern Africa and beyond by virtue of being a gateway to Africa’s second biggest economy – South Africa.
However, it must be considered that this status is not permanent.
Just like what some countries are doing in the region to create an alternative road thoroughfare through Kazungula, the same initiatives are also being considered for rail.
So, the work to rehabilitate NRZ must begin in earnest. First, the hygiene issues that pertain to the health of the parastatal must be considered.
Government has to bite the bullet when it comes to parastatals’ debt.
One can only guess that just as in the case of Air Zimbabwe and Ziscosteel, among other state-owned enterprises, the question of debt has been very sticking point in negotiations with investors.
Government played a part in the accumulation of the debt by sometimes insisting on sub-optimal price structure of the entities and it must do the right thing by seriously considering inheriting some, if not all, of this debt.
By being relieved of this burden, companies can be able to engage investors from a position of strength. It is an issue that has to be seriously considered.
Current reforms that are designed to improve the doing business environment, particularly the Corporate Governance Bill, should be expeditiously pursued for time is of the essence.
Such key institutions cannot be allowed to flounder and die.
The appetite shown by the Chinese in 2012 to invest in the country’s rail infrastructure shows that there is still hope for the entity.
Our challenges can be our salvation.
New board chair Mr Larry Mavhima appeared to hit the ground running. The nation waits to see what his vast business experience, locally and internationally, will do to revive this key national economic asset.
For a start, the very infrastructure deficit that we have is a drawcard for investors and a potential growth node for the local economy.
Feedback: darlington.musarurwa @zimpapers.co.zw
