The National Railways of
Zimbabwe (NRZ) should
have been sold for $1.
That’s the view of
transport economist
Andrew Marsay,
who spoke to FTW
following the successful
$400-million Transnet/
Diaspora Infrastructure
Development Group
(DIDG) Consortium’s bid
to recapitalise the country’s
state rail operator.
“This consortium is
pretending there is an
asset here, when in fact
there is a liability,” he said,
adding that the consortium
would have to provide a
satisfactory redundancy
package to 95% of NRZ
workers and then see what
they could do with the
network.
Recapitalisation of NRZ
involves the rehabilitation
and renewal of plant,
equipment, rolling
stock, track, signalling
and telecommunication
infrastructure – as well as
supporting information
technology systems.
NRZ has a f leet of 168
locomotives and 7 000
wagons, but only 60
locomotives and 3 512
wagons are in use.
“There is always great
interest in African
railways when there is
capex involved, but much
less interest when there is
operating responsibility to
be taken with evidence of
a business
plan and
committed
tonnages,” he
explained.
Marsay
questioned
how
Transnet or
the DIDG
could agree
to the deal
without
committed
tonnages of
freight. “If
there aren’t committed
tonnages of freight to
underpin the business, then
somebody must be pulling
a fast one somewhere.”
He said that even if 100%
of all the freight going
to Zimbabwe was on the
railway line, it still would
not justify the investment.
“To justify $400 million,
you need something
that is going to generate
$40 million of business
a year. They won’t get a
return on this investment
unless it’s a very highvolume,
commercially
optimised operation.”
Marsay speculated
that Transnet could be
considering
extending its
coal line into
Botswana,
turning
it into an
export line
for that
country
and feeding
Mpumalanga
power
stations at
the same
time.
He
pointed out that Vale had
built a coal line from Tete
through Malawi to the
Nacala port. Aiming to
export 30 million tonnes,
the company was piggybacking
on Malawian and
Zambian general freight, at
subsidised tariffs.
“That is an investment
which, at current coal
prices, is giving Vale a
lot of pain. So how an
investment of $400m
can possibly be justified
- without a business case –
requires poring over in
great detail.”
He said
wagons
moving
through
Zimbabwe
were
either
privately
or
Transnetowned.
He believes those
involved with the
recapitalisation bid have
not been honest with
themselves. “If there is
no underlying business,
somebody is going to burn
their fingers terribly,”
he said.
Transnet declined
to comment, saying
details of the bid
were still being
finalised.
INSERT & CAPTION
To justify $400m, you
need something that
is going to generate
$40m of business a
year.
– Andrew Marsay
