HomeBusinessNRZ to set up $14m wagon plants

NRZ to set up $14m wagon plants

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BULAWAYO — The National Railways of Zimbabwe (NRZ) plans to set up two manufacturing plants in Bulawayo at a combined cost of $14 million to revive its comatose operations laid low by debt, undercapitalisation and mismanagement.

The proposals to establish a concrete sleeper and wagon wheel manufacturing plants in Bulawayo are contained in an NRZ strategy document handed to Transport and Infrastructure Development minister Obert Mpofu recently and made available on Wednesday.

Concrete sleepers are rectangular structures that support rail tracks.

The concrete sleeper plant is estimated to cost $4 million and would cater for NRZ’s requirements “to remove all cautions through resleepering of the track system as well as reserve stock for accidents and derailments”.

It would improve track conditions to enable full utilisation of resources, reduce transit times and ensure a stable and reliable track in Zimbabwe and connection to neighbouring countries “since NRZ system is at the centre of the Sub-Saharan Africa railway system”.

The wagon wheel manufacturing plant to produce mono-bloc wheels in-house, would enable a “faster roll out of wagons and cut costs involved in the importation of the same”, the documents says.

NRZ said the wagon wheel manufacturing project would, among other benefits, result in the reduction in financial resource leakages due to importation of wagon wheels and reduce derailments on the tracks due to defective wagon wheels.

The plant’s cost is estimated at $10 million.

However, analysts point out that the NRZ’s proposals are too ambitious for a parastatal saddled by a large debt, undercapitalisation and mismanagement.

NRZ is also looking for close to $1, 4 million to purchase spares required for the refurbishment of a stabled shunt and mainline locomotives. It currently has about 65 locomotives, 3 271 wagons, nine cabooses and 158 coaches against the optimum average requirement of 83 locomotives, 4 262 wagons, 17 cabooses and 145 coaches to run viably.

In the long-term, NRZ needs $2 billion to fully recover, but has been failing to attract financiers largely due to a weak balance sheet.

The NRZ has a long history of operating losses in spite of holding a virtual monopoly over large-scale freight in the country. It has never posted an operating profit in the post independence era, relying on perennial government support.

— The Source

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