The National Railways of Zimbabwe (NRZ) recapitalisation project is now back on track after the utility’s board yesterday approved a US$420 million funding offer from the Diaspora Infrastructure Development Group (DIDG) and referred it to Treasury for consideration.
DIDG/Transnet Consortium won the tender for the NRZ recapitalisation project in 2017 and the investors were required, among other conditions, to provide proof of funding.
In May, Transport and Infrastructural Development Minister Joel Biggie Matiza told Parliament that Government had removed the exclusivity clause for the US$420 million deal after the investors failed to provide proof of funding for the project within 12 months of the framework agreement.
A Special Joint Plenary meeting was held in Harare recently to establish whether or not DIDG/Transnet had capacity to fund the project.
The NRZ recapitalisation and rehabilitation project involves acquiring rolling stock, signalling equipment and information communication technology (ICT) equipment.
A statement signed by NRZ board chairman Advocate Martin Dinha after yesterday’s meeting indicates that the board approved the proof of payment that DIDG has given to Government as evidence that it has obtained funding from Afreximbank.
A meeting of the NRZ board was held on 9 September 2019 (yesterday) to consider the report from the Special Joint Plenary meeting and resolved to recommend to Government that; the offer/proof of US$420 million funding from the DIDG through Afreximbank be referred to Treasury to pursue and consider, inter alia, the availability of the said funding.
“The NRZ should await guidance from Treasury, on the availability of the funding where after, subject to such guidance as may be given by Treasury, the project be progressed in terms of the provisions of the Joint Ventures Act as previously directed by Cabinet communicated to NRZ through the letter from the Minister of Transport and
Infrastructural Development dated 16 October 2017 to the NRZ,” reads Adv Dinha’s statement.
DIDG/Transnet had been given an August 14 deadline to furnish the NRZ board with proof of funding for the project, amid indications that there were hawks working with some officials in the Ministry of Transport to torpedo the deal.
Adv Dinha said the board was excited that it had delivered on its mandate and has been able to “progress the transaction” towards implementation.
The NRZ board unanimously approved and recommended that parties should proceed to sign a Joint Venture Agreement to allow consummation of JV2 or the new railway concession company with DIDG backed by Afreximbank.
The Afreximbank has become the country’s all-weather friend as it has supported Harare when other financiers especially from the West, withheld their funds.
“As NRZ we now wait for National Treasury and JV Unit under Ministry of Finance to lead the engagement with DIDG and Afreximbank and conclude the necessary agreements so that we start implementing the project with urgency,” said Adv Dinha.