Zimbabwe cancels R5.9bn deal with Transnet joint venture

Zimbabwe has cancelled a deal struck with SA port and rail parastatal Transnet and its partner to recapitalise state-owned National Railways of Zimbabwe (NRZ), citing a failure to meet timelines and funding issues, a Zimbabwe government official said.

The joint venture between Transnet and Diaspora Infrastructure Development Group, a consortium of Zimbabwean investors living abroad, won the bid to recapitalise the financially struggling NRZ with R5.9bn (US$400m) in August 2017.

Nick Mangwana, permanent secretary in the information ministry, said the consortium had missed several timelines to provide proof of funding. 

He also said differences had emerged between the consortium partners, which led to Diaspora presenting a funding structure that excluded Transnet.

“The government indulged the consortium by working with them outside the framework agreement. Regardless, it failed to present a common position,” said Mangwana. “The exclusion of Transnet had a legal impact on the tender, which had been awarded to them as a consortium. In light of the foregoing, the government took a position to issue a new tender.”

Disapora chair Donovan Chimhanda said that the group had not been informed of the government’s decision.

Transnet was not immediately available to comment.

NRZ was one of the single largest employers in Zimbabwe, but its fortunes waned after an economic crisis between 2000 and 2008 that nearly halved the Southern Africa country’s economy.