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Tuesday, June 18, 2024
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NRZ Scales Up Recapitalisation Efforts

The National Railways of Zimbabwe is scaling up its recapitalisation efforts, leveraging on its vast swathes of land which will be subdivided into residential and commercial stands for disposal at market value to raise funds to procure new locomotives and waggons

The current fleet has outlived it economic life.

NRZ has 68 mainline locomotives, of which 14 are in service.

It has another 73 shunt locomotives but only 25 are in service.

Of the 5 811 general purpose wagons, only 3 065 are in service while 2 761 need to be repaired or upgraded.

NRZ Public Affairs and Stakeholder Relations Manager Andrew Kunambura confirmed the development saying said disposal of the land, once approved by the shareholder, would go a long way in funding the NRZ recapitalisation efforts.

“NRZ has valuable vacant land. It was realised that serviced land is at least five times more valuable than unserviced. It is against this background that Management is submitting this proposal to have some of its land for sell as residential and commercial stands, proceeds of which would be used to recapitalise NRZ,” Kunambura said.

“We did a pre-bid assessment wherein we approached potential reputable companies that have handled such big projects before to check if they will be amenable to servicing the land and be paid using land. The companies were very much willing to partner NRZ,” he said.

The NRZ owns huge tracts on land in Bulawayo, Kadoma and Rugare in Harare which are being targeted for sub-division and disposal.

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The company has identified about 4 000 hectares of land to be sub-divided. The bulk of the land is at Wollendale Farm near Bulawayo with 3 800 hectares.  Some stand at the farms would be reserved for NRZ employees.

The NRZ expects to get about US$400 million from the targeted land sales after deduction of servicing costs.

Kunambura said some of the serviced land would not be sold but retained for future needs.

“The NRZ will only sell stands to meet its immediate needs and retain some of the serviced stands for future use. The immediate requirements include infrastructural rehabilitation, procurement of wagons, locomotives and signalling system. The company will also use some of the money to modernise its workshops and clear some of its existing debts,” he said.

NRZ Contributory Pension Fund chairman Takunda Madanha said the fund, which was owed millions of dollars by the company, could benefit from the arrangement.

He said the NRZCPF was negotiating with NRZ on offsetting the debt owed by NRZ through land and these negotiations were at an advanced stage.

“Our interest as NRZ Pension Fund is to see the amortisation of the arrears of NRZ. I am happy that NRZ is open to offsetting what we have been owed through a land offset,” he said.

“We are also excited about the recapitalisation effort because it implies that NRZ would be able to remit to the pension fund, thereby allowing us to increase pay outs to our pensioners, something which we have not been able to do over the past few years,” Madanha said.

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Acting Secretary General of the Zimbabwe Amalgamated Railway Union Mr Nhamo Bepete weighed in saying workers were excited about the proposed land disposal as they would also benefit.

“Employees are happy and excited to hear that they are going to benefit from the land being developed. One of the major issues we have been crying for is the recapitalisation of the organisation now that there are plans re recapitalise it through this arrangement where employees are also set to benefit from the stands to be reserved for them, I think that’s the best way to go,” he said.

“We would encourage the board and management to move with pace and implement the process. We love NRZ and we would like to see it doing better. We need new locomotives to improve our turnaround time. We are supporting the process and we will give it all so that it comes into fruition,” he said.

The programme will be undertaken by leading property developers in the country.

An independent estate valuer last year indicated that NRZ has an undeveloped land portfolio worth over US$300 million

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