GOVERNMENT has injected US$4 million into cash-strapped National Railways of Zimbabwe (NRZ) towards the rehabilitation of the rail network throughout the country, The Financial Gazette’s Companies &Markets (C&M) has established.The funding would help restore viability at the railways company which has struggling for over a decade due to undercapitalisation, ageing equipment and a decline in business since the turn of the millennium.
Public relations manager, Fanuel Masikati, said the funding was from government’s Public Sector Investment Programme (PSIP).
The NRZ was allocated US$9 million to fund capital projects but has received US$4 million.
Masikati said the NRZ was expecting to receive the balance of US$5 million before the end of the year.
“Yes, so far we have received US$4 million from government from our 2012 Public Sector Investment Programme,” Masikati said.
“We now expect to get the balance of US$5 million from our US$9 million allocation before the end of December.”
The NRZ requires about US$2 billion for its short, mid and long-term recapitalisation programme.
Several manufacturing companies, the backbone of NRZ’s business, have closed and shipment of coal from Hwange Colliery Company, which sustained NRZ, has declined significantly.
The company is also in serious debt, making it impossible to turn the corner without government or external help.
Currently, NRZ, which provides passenger and freight services, is operating below 30 percent capacity due to lack of capitalisation and has been failing to pay salaries.
In June this year, the financially troubled parastatal owed more than US$40 million to its workers in unpaid salaries.
The NRZ’s goods transport business, which at its peak was raking in about 95 percent of the company’s revenue, has declined to an average of one million tonnes of cargo annually from 18 million tonnes shipped in 1998.
A number of Chinese investors are keen to partner the parastatal but no deal has been finalized due to an absence of government guarantees.
Currently, the company is in partnership with private companies through the Public Private Partnership programme to finance the refurbishment of its fuel tankers in an effort to capacitate the organisation and enable it to play its role in the economy.
Some companies have participated in the refurbishment of wagons and locomotives. So far 100 wagons and 10 locomotives have been refurbished through the PPP programme.
In 2011, the parastatal had 168 locomotives of which only 71 were serviceable and out of the 8682 it owns, only 3 427 were operational.
The company has also deposited US$2,9 million to purchase 14 locomotives from China’s biggest train maker CSR Corporation Limited. The total cost of the locomotives from China is US$29 million.