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Rail investment fuelled by PPPs and Chinese loans

06 Feb 2025 - by Ed Richardson
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The Zimbabwean government has signalled it is willing to enter into more public private partnerships (PPPs) to get rail moving again.“In order to reduce pressure on the already overloaded road infrastructure, focus will also be on upgrading the rail infrastructure through a combination of private sector funding as well as leveraging on budget and parastatal own resources,” states the 2025 Zimbabwe Infrastructure Investment Programme.From a 1990s peak of 12 million tons of cargo a year, National Railways of Zimbabwe (NRZ) now hauls less than three million tons.It cannot respond to increased demand, mainly from Chinese chrome and lithium mines, due to a shortage of locomotives and poor infrastructure maintenance.There is a precedent in the Beitbridge Bulawayo Railway (BBR), a Grindrod subsidiary.BBR has a concession to build and operate a rail link between Beitbridge and Bulawayo for 30 years before transferring it to the NRZ, which has a 15% share in BBR.The 317km direct route replaced a 200km diversion through Botswana and was opened in July 2019 after an 18-month construction period. In 2024 NRZ provided open access to BBR, which in March started operating three locomotives and around 150 wagons.Open access is considered important for Grindrod, which controls the bulk terminals in the Port of Maputo, as well as the Matola coal terminal.The agreement gives it access via rail to Mozambique via the newly upgraded Machipanda line to complement the Beitbridge link.“Open access has proven beneficial as private players can bring in more investment, modernise infrastructure, introduce new technologies, and enhance customer experience and satisfaction, leading to retention and loyalty,” said NRZ when it announced the agreement.According to NRZ, it owns 68 mainline locomotives and 73 shunt locomotives. The mainline f leet is aged between 30 and 48 years and shunt locomotives between 40 and 60 years.Only 39 of the locomotives are operational. In September, the NRZ and China Rail International Group signed a framework agreement to undertake the implementation of the first phase of the Zimbabwe National Railways Rehabilitation Project. The agreement includes the purchase of 17 locomotives, 200 wagons, supporting workshop equipment, and maintenance equipment such as tampering machines and trolleys, electrical and lighting equipment. It also covers emergency repairs to the track structure of the most severely damaged sections, and the rehabilitation of five stations and yards.The estimated completion time is two years, at a cost of $257 million for Phase 1. Not all PPP attempts have, however, been successful.In October 2019, the Zimbabwean government announced that it had cancelled a $400m investment deal with a consortium consisting of Transnet and the Diaspora Infrastructure Development Group due to performance issues. ER

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