Manhize project to put NRZ back on track

THE National Railways of Zimbabwe (NRZ) is upbeat that the US$1,5 billion steel project by Dinson Iron and Steel Company will bring a new lease of life to the country’s bulk transporter.

Dinson, a subsidiary of China’s iron and steel giant —Tsingshan Holdings, is building Africa’s largest integrated steel plant in Manhize near Mvuma.

For more Business news visit businessweekly.co.zw

The steel project is scheduled to commence first production in April producing 600 000 tonnes of products that include pig iron under the first phase.

Production is expected to rise to 1,2 million tonnes in the second phase in October when steel billets would be manufactured before rising to 3,2 million tonnes in the third phase.

The company will ultimately produce five million tonnes annually in the last phase, supplying a full range of steel products to domestic and foreign markets.

Riding on Dinson operations, it is hoped that NRZ which recently managed to meet its financial obligations, would further consolidate itself as a going concern taking advantage of the bulk movement of freight opportunities.

Presently, the rail operator’s freight volume stands at under three million tonnes per annum against capacity to move 18 million tonnes. In the 1990s at its peak, NRZ hauled 14 million tonnes.

The rail operator’s subdued freight volume has been attributed to operational constraints NRZ has endured over the years on the back of cautions (equivalent of potholes in the road network) and dilapidated infrastructure and equipment.

Zimbabwe’s rail network covers 2 760km accounting for a total of 64 cautions extending a distance of more than 254km.

The cautions among other issues, he said, have undesirably impacted on the movement of trains by causing delays or derailments.

Speaking by telephone last week, NRZ board chair Advocate Mike Madiro said in light of the envisaged bulk movement of cargo from Dinson operations and restoring the entity to its former glory where it immensely contributed to economic growth and development, the country’s strategic transporter was seized with the “immediate” task of ensuring Zimbabwe’s rail industry becomes competitive.

So far, as a result of operational inefficiencies that have hogged the parastatal, NRZ’s customers including those in the manufacturing and mining sectors, a majority of them were opting to use the road network to move bulk goods.

“Looking at 2024, this year must be a game changer for NRZ taking into account Dinson’s steel project in Manhize who have indicated they will start to roll out their first product in April.

“We are talking of raw materials coming in and end-products going out and we’re talking of millions in terms of total tonnage moving in and out of the country. So, you can imagine the number of trucks needed in the second quarter towards the end of the year given the tonnage in terms of raw materials and end products coming as a result of Dinson’s project.

“Given that clear challenge, as NRZ we need to move with speed and make sure that exponentially we provide the pace to meet the demand,” he said.

“That’s the task which NRZ has and as chairman and my board, I am demanding management to go beyond the normal pace, people cannot sleep at all and say because we have got challenges, therefore, we have nothing we can do and we can fold our hands and look at the problems.

“I think it’s high time that people can ship out if they cannot meet the challenge. As part of the key projects to facilitate Dinson’s steel project, a 50-kilometre railway line to the steel plant in Manhize from Mvuma has to be constructed and discussions around the development of the proposed rail infrastructure are underway between NRZ and the steel manufacturer.

“We have engaged Dinson and my management is working together with Dinson to come up with solutions.

“The moment finance is identified, putting in a rail does not take long, we are talking of slightly below 50 km from Manhize to Mvuma and it’s just a question of having the resources.

“But in terms of human skill and mobilisation of material to do that rail, it’s not any issue at all,” said Adv Madiro.

NRZ has in the past engaged its various customers including mining houses in the country who have come on board to assist with funding for the refurbishment of wagons and locomotives while the rail operator offsets this with service provision to the concerned miners. For example, through such Public-Private Partnerships, four locomotives, 100 wagons, 100 tankers have been refurbished.

“We cannot wait until new locomotives are ordered and delivered when we are suffering this challenge, so we need short-term strategies to make sure that we ameliorate the current crisis.

“The amount of locomotives that we have it’s a drop in the ocean and I’m deliberately avoiding giving you specifics to say we are doing this and that because some of the strategies are still work in progress, so we don’t want to jeopardise those efforts,” he said.

Meanwhile, NRZ towards the end of last year announced that it was close to securing a US$115 million loan facility from the African Export-Import Bank (Afreximbank) from which US$81 million would be used to procure rolling stock from RITES Limited of India.

It is believed that the balance from that financial package would be used by the State-owned entity for the rehabilitation and expansion of its infrastructure. Under the RITES deal, NRZ is anticipated to receive nine locomotives and 315 wagons.

-herald