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NRZ projects growth

THE role of the National Railways of Zimbabwe (NRZ) as a key enabler in the country’s economy cannot be overstated. Standardbusiness reporter Mthandazo Nyoni spoke to NRZ public relations manager Nyasha Maravanyika (NM), who gave insights into the state of affairs at the parastatal and what plans are in place to turn it around.

Below are the excerpts from the interview.

MN: How did NRZ fare in the just-ended financial year?

NM: For us, as National Railways of Zimbabwe, the year 2018 was fruitful because in terms of production, we managed to achieve our targeted tonnage of 3,4 million tonnes of cargo. This was mainly due to the interim equipment solution that we got in February where we received 200 wagons, seven coaches and 13 locomotives. So, I think this went a long way in aiding us in our capacity and we managed to achieve our target. So, basically, this was a fruitful year for us in terms of production because we managed to serve our priority customers. We believe it was a far much better year than 2017.

MN: What challenges did you experience during the year?

NM: The major challenges that we encountered have to do with our equipment, which is now old. When I’m talking about equipment, I’m also talking of the tracks. Time and again we have encountered derailments where the flow of goods, especially our freight, was actually disturbed by these derailments. We also had challenges of not meeting some of the business orders. There was huge business for the NRZ, but because of limited resources, we could not meet some of the demands. You know, the road network is not that good at the moment, which makes it ideal for customers and businesspeople to favour rail. And besides, rail is cheaper than road. We also had challenges in terms of the sudden economic changes like, if you look from September or October last year, we had volatility in terms of prices. It was a challenge because here and there, at some point, we had to agonise over how we were supposed to then charge our exporting customers. We then had to go back to our 2006 policy where we said for any exports and imports that are coming into the country, we definitely need to charge in foreign currency. At these ports, they want foreign currency, so we definitely needed to do that. It was a challenge in trying to balance the three-tier pricing system. Locally, we were then working with the RTGS [real time gross settlements] and bond notes and when it comes to imports and exports, we had to make sure that we used the foreign currency.

MN: Going forward, how do you think those challenges should be addressed?

NM: Our recapitalisation exercise is still giving us hope — it is still ongoing. We have the negotiations going on and we believe that the only way to circumvent the issue of our old equipment is to recapitalise, as this will allow us to rehabilitate the tracks and other equipment; and to even get new systems for us. So we believe the recapitalisation route is the way to go. So we expect that should this deal be closed, we should be much hopeful and be able to progress in terms of reviving equipment and our system. Then when it comes to the issue of failing to get excess business, this is again the same issue where we are saying we need more equipment and resources. We need more wagons. Yes, our teams are working on refurbishing wagons, but that’s not enough. In the long-term, we expect to even get these coaches so that we can fulfil any business and customer demands.

MN: Ideally, for you to operate at full capacity, how many wagons do you need?

NM: At one time, we used to have over 2 000 to 3 000 wagons. I think we need to go back to those figures or even more so that we can fully capacitate the economy. You will also see that right now, if you look at the economic system in Zimbabwe, the transport sector is struggling to carter for the transporting of commuters. Right now, the government is looking to NRZ for capacitation, but again we don’t have enough resources. We have only managed to put a train on the Cowdray Park City route and it’s not enough for Bulawayo. People still expect us to put a train at Emganwini and Cement Siding, but because of constraints in terms of resources, we can’t do that. We also have the Passengers’
Association of Zimbabwe which is calling for us to put “freedom trains” from Ruwa and Mabvuku to town, but we can’t do that at the moment because our fleet is limited. Right now, our teams are working on refurbishing some of the old coaches so that if we get enough of those, we can try and see which route we can service. Then again in terms of economic volatility, we are just like in the same situation like everyone else. Our hope is that we have a stable economic playground and pricing system and once we have that, I think we shouldn’t have problems.

MN: How many tonnes of freight are you targeting to move in 2019? How about revenue?

NM: In 2019, we have actually increased our projection. Like I told you, we managed to achieve our 2018 target, which was 3,4 million tonnes. In 2019, we are looking at upping it to around 4,2 million tonnes and for us this is an increase of 25,6% on cargo that we transported in 2018. We expect that we will be able to do that, especially if the recapitalisation deal comes out well; then it will be a boost to us. In terms of revenues, we are still working on the figures because of the instability in terms of the pricing systems that we are having at the moment. Our teams are working on proper figures so that we work with a figure that is feasible.

MN: What are your plans for the current year?

NM: We expect to ensure that we can manage to cover a lot of ground in terms of our 4,2 million tonnage of freight that we want. We expect that should everything go according to plan, by May, June and July, we should be able to declare probably half of the freight tonnage that we have ferried. Then in terms of equipment, our teams are working on refurbishing coaches. We are also looking at making sure that we can get one or two service level agreements with any partners so that we can increase our equipment like wagons.
We might fail to get service level agreements, but what we want is to ensure that our fleet will be in condition and enough to ensure that the projection of 4,2 million tonnage is not disturbed. So we expect that one way or the other, we should be able to make sure that we replenish our equipment. Our long-term plan is recapitalisation even if it doesn’t get done in the period that we want. To revive the NRZ and freight system for the railways, we need recapitalisation.

MN: What is your outlook for 2019?

NM: We have a positive outlook for 2019, but we hope it would be further enhanced by a stable pricing system. If we have that in place, we believe that 2019 can actually be a better year. Our hope is on a stable pricing system that will ensure that we can have a better 2019 than what we had in 2018. Remember, we have already increased our tonnage. So we are looking at a very much positive 2019.

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