The Sunday News
Dumisani Nsingo, Senior Business Reporter
THE National Railways of Zimbabwe (NRZ) has been forced to revise downward its annual freight movement target by 10 percent this year following a significant drop in business owing to a myriad of challenges it faced the previous year.
NRZ public relations manager Mr Nyasha Maravanyika told Sunday News Business last Friday that the rail entity failed to achieve its last year’s target of hauling 4,2 million tonnes of cargo, only managing to transport 2,8 million tonnes.
“Unfortunately, we did not achieve the target of 4,2 million tonnes. We actually had a 66,7 percent performance, which is 2,8 million tonnes, which again is actually 17,6 percent less compared with the 2018’s achievement of 3,4 million tonnes . . . ,” he said.
Sugar producing company Tongaat Hullet was the biggest contributor of the 2,8 million tonnes moved by the company last year accounting for more than one million tonnes with the other players to move large volumes of cargo being the Zimbabwe Power Company and Zimbabwe Mining and Smelting Company (Zimasco).
“Last year we have to give a thumbs up to Tongaat Hullet. They have a lot of material under their belt and this includes molasses and sugar. Tongaat Hullet contributed above a million of our tonnages, so this was our biggest contributor . . . ,” said Mr Maravanyika.
He attributed the failure by the company to attain its set target to numerous challenges it faced in the year under review, chief among them being the suspension of one of its biggest and busiest freight services routes to Beira, Mozambique due to the devastative destruction caused by Cyclone Idai.
“We did not achieve our target as an organisation but there were a number of issues that affected us. Chief among them was the Cyclone Idai, it really affected NRZ because it led to the closure of Beira. It meant that a lot of freight traffic that was coming through Beira had to be suspended, that definitely had a serious effect on our tonnages,” he said.
Mr Maravanyika added that falling prices on the international market for minerals also had an adverse effect on the company’s freight business as players in the mining industry were reluctant to move their commodities to export markets.
“We were also affected by the drop in the international prices, especially prices of chrome ore, coal and granite. This drop in the international prices meant that, the producers of these commodities had to play a wait and see attitude, whereby sometimes they would not release the business because of that drop in prices and therefore it affected us again,” he said.
Mr Maravanyika also cited that part of the challenges were largely to do with the company’s dilapidated rail infrastructure and obsolete equipment, which includes locomotives, coaches and wagons.
“We had continuous derailments that also affected us, which meant that we had a lot of delays in terms of pulling customer’s cargo. In some instances, we had to probably close the lines for three to four days and it affected us in terms of business . . . our rail network system is very old and it needs constant attention but constant attention is not enough, that’s why we eventually ended up talking about recapitalisation. The whole system needs to be recapitalised so that we can do our work efficiently,” he said.
Owing to lack of adequate rolling stock, NRZ entered into an Interim Solution Equipment agreement with South African rail utility, Transnet in February 2018, which saw it leasing 13 locomotives, 200 wagons and seven coaches.
The leased equipment was part of the US$400 million recapitalisation framework agreement with the Diaspora Infrastructure Development Group (DIDG)/Transnet Consortium.
Although NRZ witnessed an increase in its freight business in 2018 largely due to the Interim Solution Equipment agreement, Mr Maravanyika said last year it was difficult to fully utilise the equipment as it was constantly towed back to South Africa and would take long to come back thus impacting negatively on the company’s operations.
The Interim Solution Equipment was a stop gap measure put in place to capacitate the NRZ.
“We also have to look at our own capacity as NRZ. You find that in 2018 we received interim machinery in the form of locomotives and wagons but our power is in the locomotives. For the greater part of 2019 you will take note that sometimes we had to take back the locomotives that we had got from Transnet during the interim solution period and they would take long to come back and that again affected us . . . ,” said Mr Maravanyika.
He said the other challenges, which hampered the company from attaining its freight movement target were power shortages and currency reforms, which had an impact on their clients’ production and operations subsequently affecting business.
Mr Maravanyika said owing to the myriad of challenges the company faced last year it was prudent for it to consider lowering its target this year.
“Considering the challenges that I have spelt out . . . there is a possibility that we will still have those challenges so this year we have realistically set a target of 3,8 million tonnes which is a drop from our 4,2 million tonnes,” he said.
At its peak in the 1990s, the company used to move about 14,4 million tonnes of freight against an installed capacity of 18 million.
