Sunday, February 18, 2018

NRZ rebound: The big picture

Trevor Shiri
President Emmerson Mnangagwa is expected to commission 157 rail wagons, seven locomotives and seven passenger coaches in Bulawayo this week.
The consignment was delivered by a consortium comprising the Diaspora Infrastructure Group and Transnet under a lease arrangement as part of a broader US$400 million deal aimed at reviving the ailing National Railways of Zimbabwe.
Restoration of Zimbabwe as a stable and emerging economy is truly underway.
Operation Restore Legacy set the tone via political reconfiguration. A cursory look at one of the Zimbabwe Defence Forces’ key concerns during transition talks with former President Robert Mugabe is instructive.
The ZDF command element noted that the “dire economic situation” that obtained then was untenable as it was suicidal going into this year’s harmonised elections “without evidence of real economic recovery by way of completion of flagship projects, or pointers to the general amelioration of the socio-economic conditions of an expectant voting populace”.
Cognisant of the foregoing reality, the new Government has prioritised resuscitation of the NRZ – a vital cog in Zimbabwe’s new economic trajectory.
Capital injection into the parastatal was long overdue. The NRZ had become a white elephant, decimated. It was in a coma, semi-conscious and on life support.
A burden on the fiscus.
Leasing locomotives, wagons and passenger coaches is the first step towards resuscitating the parastatal.
In the meantime, new locomotives, coaches and wagons are being constructed.
It takes about 18 to 24 months to complete building rolling stock from the order date, and that necessitated the lease agreement.
The question is: where was Government supposed to start from? Purchasing high-speed trains? No.
A patient recuperating after a coma requires minimal feeding until he or she regains all their faculties.
The same analogy is true of the NRZ.
The lease agreement should not be viewed as a permanent investment, but as the kiss of life.
At full capacity, the NRZ carries 18 million tonnes per annum, but only managed a measly 2,7 million tonnes in 2017.
It is reeling under a US$68 million salary arrears bill, which Government has now warehoused.
The parastatal should learn how to walk on its own, and Government has set the tone in that regard.
Zimbabweans must awaken to the reality that the economy was on the brink.
However, in less than 100 days of President Mnangagwa’s Government, the NRZ is showing flickers of life.
The latest consignment, in addition to payment of outstanding salaries dating back 17 months, is the trigger the parastatal requires.
The resuscitation effort’s impact is immeasurable. Cost drivers are many, with transportation topping the list.
This explains why Zimbabwe’s pricing regime is a tad higher than other regional countries’ regimes.
Business is over-reliant on road transport, which is expensive both to consumers and the country due to various factors, principally fuel, smaller carrying capacity and damaged roads that wear out vehicles quickly.
Rail transport is safer, cheaper and moves bulk cargo at one go.
Critics could argue that much of Zimbabwe’s 3,427 km rail network has gone for years without rehabilitation.
True, but the railway lines are still usable with a bit of maintenance.
The signals system needs revamping to minimise the possibility of accidents.
And downstream consumer benefits will be immense.
Prices of goods and services will decline as transport costs decrease.
It will also be easier and cheaper to transport coal to Zesa’s thermal power stations, resulting in cheaper electricity.
For instance, it requires 33 haulage trucks, which consume 10 243 litres of diesel, to transport coal from Hwange to Harare.
A train will only consume 4 000 litres of diesel to transport the same tonnage.
Zimbabweans should be patient.
What could not be done in the past 15 years is now being dealt with – earnestly.
We do not need speed trains for now, but locomotives and wagons.
Zimbabwe needs to get going with the available resources.
The immediate task is infusing efficiency throughout the system to get the economy ticking, while the modernisation project is futuristic.
Make no mistake, these locomotives and wagons are the first step towards modernisation.
The NRZ will be able to fund that modernisation project from its own coffers if it returns to profitability.