…as shareholders demand answers
TINASHE MAKICHI
The Diaspora Infrastructure Development Group (DIDG) wants government and Transport and Infrastructure Development Minister Biggie Matiza to come clean on issues that culminated in the cancellation of its multi-million-dollar deal with the National Railways of Zimbabwe (NRZ).
This comes after DIDG noted with concern the confusion that has arisen from the consortium’s partners and suppliers. DIDG has continued to crank up pressure on government to come to the negotiating table.
DIDG has made several attempts to engage Matiza with the minister slamming the door on the investment group.
In a letter to DIDG shareholders, executive chairman Donovan Chimhandamba said it was critical for government to come clean on their pronouncements.
DIDG has since taken the legal route seeking recourse.
“We are aware of the concerns and confusion that has arisen among most of our shareholders and stakeholders due to the public pronouncements and media articles pertaining the status of the NRZ project and consequently what the future holds for DIDG,” Chimhandamba said.
“These pronouncements by government have caused pandemonium to DIDG’s broad coalition of stakeholders including but not limited to, DIDG shareholders.”
The letter to the DIDG shareholders comes as fresh details emerged that the investment group submitted proof of funding to Treasury, in contrast to the narrative that the investor had failed in that context.
Chimhandamba said the pronouncements made by government of late have also caused confusion among international and regional customers who need NRZ to be functional at a global performance and competitive standards as Zimbabwe is a land linking transit economy.
He said DIDG directors are of the belief that NRZ has been put in an unenviable position by Matiza who requested for the reversal of work done for the last four years and restart the entire tender preparation.
“It is DIDG’s considered view that this request is neither in the interest of NRZ nor the country as such a process undoubtedly would attract further delay, litigation and costs that neither of the negotiating parties and country benefits from.
“As DIDG, we are pursuing all options at our disposal with a singular aim of implementing the transaction. These options include direct engagements with the NRZ and government and continued engagement and appraisal of the Financial Institutions involved and the legal route,” said Chimhandamba.
DIDG has put together a legal team which comprise Innocent Chagonda of Atherstone and Cook LP to advise, pursue and protect DIDG’s legal and commercial rights.
Chimhandamba said DIDG’s broader strategy beyond the NRZ project is the ramping up of its investment efforts in South Africa and other regional and continental jurisdictions.
Matiza could not be reached for comment.
The US$420m deal was cancelled last year over DIDG’s alleged failure to avail proof of funding for almost two years.
The DIDG/Transnet consortium was chosen in 2017 as the NRZ’s technical partner in a US$400m deal which was aimed at recapitalising and rehabilitating the railway infrastructure.
Government, however, has since engaged Russia’s Union Wagons in bid to revive the rail company that requires more than US$1bn to realise a complete turnaround.
As efforts to revive the rail company are on-going, vandalism of equipment, a tanking economy and corruption, according to people with deep knowledge of the state owned firm, is said to have wrecked the NRZ, once the bedrock of the nation’s economy.
At its peak, the NRZ employed 17,000 workers in the late 1980s.
The staff compliment has dwindled to 4,600. Neglect, lack of spare parts and overdue replacement of equipment have led to a situation where only part of the railroad network is in good condition, and equipment problems have led to a reduced service.
The company is sinking in debt, making it impossible to get out of the quagmire without external help. Freight declined from 18 million tonnes in 1998 to 4 million tonnes in 2015.
Vandalism has paralysed the communications system while the geographical spread of the network made it almost impossible to adequately protect and guard it.
The NRZ operates about 3,000 km of railway, providing passenger and freight services.
The NRZ has an important transit function in the southern part of Africa and is well linked with neighbouring countries.
Towards the northwest, in Victoria Falls, the system links with the Zambia Railways, crossing the Victoria Falls Bridge.
Towards the Indian Ocean, the system links with the Beira Rail-road Corporation in Mozambique.
A second line towards Mozambique reaches Maputo. Another connecting line links up with Botswana Railways in the west to reach South Africa.
A direct line to South Africa is provided from Bulawayo by the Beitbridge Bulawayo Railway.
Elsewhere, the electrified (25kV AC) 313 km Gweru-Harare section has been seriously vandalised and the electric trains have since stopped operating.
