Oliver Kazunga, Senior Business Reporter
IMPROVED efficiency by the National Railways of Zimbabwe (NRZ) is expected to see industries that transport bulk cargo reducing logistics costs by 15 percent to 20 percent, an official said yesterday.
In an interview ahead of the commissioning of rail equipment from South Africa by President Emmerson Mnangagwa in Bulawayo today, the Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe said:
“If we are talking of bulk movement of goods by industry, rail is the way to go. We are waiting for the recapitalisation of NRZ, a programme which will see the railways company being rehabilitated.
“As the NRZ launches some rail equipment, this will have a direct bearing on our members (companies) that move bulk cargo as they would be able to reduce their transport costs by margins of between 15 percent and 20 percent.”
The equipment, which comprises 13 locomotives, 200 wagons and 34 coaches, is being leased from South African rail utility, Transnet, under a clause in the framework agreement between NRZ and the Diaspora Investment Development Group (DIDG)/Transnet Consortium.
Last week, NRZ said seven locomotives, 150 wagons and seven coaches have arrived in the country with the remainder of the equipment expected to be delivered in due course.
Mr Jabangwe said due to the inefficiency by NRZ, industries were burning from high cost of doing business including logistic charges largely emanating from bulk transportation of goods by road.
“We have in the past through our (CZI) transport and infrastructure development committee engaged NRZ over the need to capacitate its operations so that we cut down on logistics by utilising rail transport.
“Now that the new rail equipment from South Africa will be launched this week, we hope the equipment will go a long way in capacitating NRZ, which is relatively cheaper in moving goods compared to road,” he said.
The railways firm’s system has a capacity to carry over 18 million tonnes of freight annually but was presently moving less than four million tonnes due to operational challenges it was facing.
Over the years, concerns have been raised by different stakeholders that long-haul road freight was damaging Zimbabwe’s road network as well as causing congestion at border posts.
Transport and Infrastructural Development Minister Dr Joram Gumbo is on record as saying there was a need to prioritise the resuscitation of NRZ before a policy to ban bulk transportation of cargo by road can be enacted.
Last July, NRZ identified DIDG/Transnet consortium as a suitable investor to recapitalise the parastatal. The two parties are expected to reach financial closure for the $400 million NRZ recapitalisation deal by mid-year. The $400 million recapitalisation project involves the rehabilitation and renewal of plant, equipment, rolling stock, signaling and telecommunications infrastructure and the supporting information technology systems. It is also hoped that the project will see the repairing and rehabilitation of infrastructure and equipment such as locomotives, wagons and coaches as well as phased modernisation of train control system.