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We will be guided by government on DIDG deal: NRZ

The National Railways of Zimbabwe (NRZ) has said it would remain guided by the government on the way forward regarding the US$400 recapitalisation deal with a South African firm cancelled last year.

The much-awaited recapitalisation of the state entity is set to drag further, with the government yet to retender the project following the cancellation last October, of the deal signed more than two years ago.

In abandoning the contract with Diaspora Infrastructure Development Group (DIDG)-Transnet the government cited failure by the former to provide proof of funding and to comply with contractual timelines.

The cancellation, however, came after DIDG had as part of the deal, delivered 13 locomotives, 200 wagons and six passenger coaches on a lease arrangement.

On the other hand, DIDG-Transnet has threatened to sue the government, should they go ahead and retender the deal.

Notwithstanding that, Cabinet last November ordered the retendering of the project.

NRZ board chairman, Martin Dinha, told CITE, their hands were tied as both board and management on the way forward.

“NRZ is a government-owned company so government sets the tone and direction as well; these processes are government processes,” said Dinha.

“The tender processes are done through what is called PRAZ (Procurement Regulatory Authority of Zimbabwe), so we will stand guided by the government on that issue.”

The recapitalisation of NRZ remains key in the resuscitation of the country’s economy which contracted by -6, 5 percent last year but projected to grow by only three percent this year.

A vibrant railway system is pivotal in the transportation of minerals from the mines and agricultural produce to ports such as Beira.

Meanwhile, a wagon deal between NRZ and a Russian company is hanging in the balance, with the cash-strapped national railway carrier now struggling to raise an initial deposit of US$1.5 million before the latter could deliver the first consignment into the country.

In October last year, NRZ signed a deal with Union Wagons of Russia in that country for the supply of 5 000 wagons, with the first batch of 100 expected to arrive in the country in January 2020 at a cost of US$10 million.

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