FINANCIAL closure for the National Railways of Zimbabwe (NRZ) $400 million recapitalisation deal has been deferred to end of the year, general manager, Engineer Lewis Mukwada, said yesterday.

Following the signing of the recapitalisation agreement between NRZ and the Diaspora Infrastructure Development Group (DIDG)/Transnet last year, it was anticipated that financial closure of the deal would be concluded by July this year.

In an interview, Engineer Mukwada said when they finalised the tender adjudication, they had hoped the whole process would be done within nine months.

“When we went more into the deal, the nature of the transaction was so fundamental in that it entailed restructuring the NRZ to form a new unit and as such there are a lot more issues than what we had anticipated because it’s not just a straight loan where we get the loan as a company,” he said.

“We also had to do due diligence and it took quite a bit of time than we had anticipated. So, we had to reset our time lines as we felt that for us to get to a point where we would have submitted something to Cabinet and get approval, it will take us up to the end of the year.”

The $400 million NRZ recapitalisation project involves renewal of the parastatal’s plant, equipment, rolling stock, track signaling and telecommunications infrastructure as well as information technology systems.

Eng Mukwada said DIDG/Transnet also visited NRZ and inspected the firm’s infrastructure and equipment such as locomotives and wagons. In the long-term, NRZ requires about $1,9 billion to fully recapitalise its operations.

Asked about what impact the restructuring exercise would have on NRZ employees as a result of the $400 million recapitalisation deal, Eng Mukwada said it was premature to start talking about that matter.

“Once we get to the stage where we discuss the structures, the numbers of people and so on, then perhaps I can then comment further on that,” he said.

Of late, Eng Mukwada said, NRZ has been on a business growth trajectory with the volume of freight improving from 2,7 million tonnes in 2016 to 3,1 million tonnes last year.

In February, NRZ took delivery of railway equipment from DIDG/Transnet on lease terms comprising locomotives, wagons and passenger coaches, as an interim solution to its challenges.

The equipment is meant to boost the NRZ’s capacity to move freight whose volume had plummeted due to obsolete equipment.

“This year we are projecting to move between 3,6 million tonnes and 3,7 million tonnes of freight. We have been on a growth path and even our revenues have been growing in line with that,” he said.

In the 1990s, the strategic logistics entity was moving 18 million tonnes of freight annually.

- Chronicle