politics & economy

Zimbabwe: Six Firms Bid for NRZ Recapitalisation

Wednesday, 05 July 2017

The State Procurement Board (SPB) yesterday unveiled six investors interested in the recapitalisation of the state-owned, National Railways of Zimbabwe (NRZ).

NRZ infrastructure, which includes the rail and locomotives, has deteriorated in the last two decades, a situation made worse by a slump in economic activity that translated into low volumes for the rail transporter.

From moving over 12 million tonnes at peak in 1998, the parastatal in 2016 transported less than three million tonnes. Due to the reduction in volumes and failure by its shareholder to inject new capital, the parastatal has struggled financially and has over the years even failed to pay its workers and has a huge debt of over $140 million.

NRZ requires a minimum injection of around $400 million to revamp its operations and went to tender seeking a partner to recapitalise. While over 20 firms had expressed serious intentions to invest in the company in a debt or equity deal, last week only six bids were unveiled. Of the six, only three appeared to have met the tender requirements.

The three are a Swiss firm, Crowe Horwath Chartered Accountants, which said it could secure funding amounting to $2,5 billion, a local firm, Croyeaux Private Limited which proposed to inject about $700 million.

South Africa's Transnet partnered with a local firm, Diaspora Infrastructure Development Group submitted a tender in which they said they could provide $400 million.

China's Sino Hydro only submitted what was referred to as a "regret", while China Civil Engineering asked for a late submission. The sixth firm, SMH Rail of Malaysia, said it could re-manufacture some of the infrastructure and submitted a tender with a funding proposal of about $101 million.

NRZ board chairman, Mr Larry Mavhima, who attended the opening of the tender documents, said they would within the next 10 days come up with a recommendation on the winner.

"What we are going to do now is to go through an adjudication process in which we will eliminate those that have failed to meet the basic requirements and we should be able to do (that) within the next 10 days," he said.

"Basically looking at the list that has been submitted, I can see that there are only about three serious bidders who have submitted in compliance with the request for proposals."

He said NRZ was looking for "total recapitalisation, and of course rearrangement of its balance sheet".

Credits: New Ziana(The Herald)