Picture: ISTOCK
Picture: ISTOCK

Harare — South African logistics group Transnet has won a bid to recapitalise the government-owned National Railways of Zimbabwe (NRZ) with $400m, NRZ chairman Larry Mavhima said on Thursday.

Mavhima said the financially struggling NRZ would begin contract negotiations with Transnet next week.

Transnet made the bid jointly with Diaspora Infrastructure Development Group, a consortium of Zimbabwean investors living abroad.

Transet is expected to help turn around the fortunes of NRZ by providing funding to acquire and refurbish wagons, upgrade the company’s information communication technology and signalling systems, and increase NRZ’s capacity to move goods.

"Basically the winning bidder is coming in as a joint venture partner to work with NRZ to turn around the situation," Mavhima told Reuters.

Mavhima said the government had created a special purpose vehicle to warehouse NRZ’s $348m debt, which the railway company would repay over time once it was financially sound.

NRZ, which owes more than a year’s salary to workers, 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 country’s economy.

Reform and privatisation of loss-making parastatals is one of the major conditions agreed between President Robert Mugabe’s government and the International Monetary Fund to unlock any future funding.

Reuters

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