…as firm pushes NRZ project
THE Diaspora Infrastructure Development Group (DIDG)-Transnet, a business consortium which won the US$400 million recapitalisation tender for the local state-owned rail operator, is moving to pool together offshore funds to allow other Zimbabweans living abroad to inject capital into the firm, a company official has said.
By Hazel Ndebele
This comes as the company expects to conclude legal processes for the multi-million dollar railway deal by June 30 before rolling out the project the following month.
DIDG executive director Donovan Chimhandamba told the businessdigest this week that the National Railways of Zimbabwe (NRZ) recapitalisation project should gather steam during the second half of the year, adding his company is also scouting for other investment opportunities locally.
At its peak, NRZ employed nearly 20 000 workers and moved 18 million tonnes of freight annually. Just before DIDG moved in, NRZ was moving less than 100 000 tonnes per week as the economy floundered while rail infrastructure also collapsed.
“The NRZ recapitalisation deal is going according to plan and the legal negotiations are expected to end by June, while other works on the project will commence in July,” said Chimhandamba.
“No one will put money in Zimbabwe if we Zimbabweans do not put equity investment in our country. We are currently working on a collective investment scheme whose details I cannot divulge at the moment, but will involve other Zimbabweans in the diaspora who will be welcome to buy what we call a policy equity cheque allowing them to invest.”
According to the DIDG inaugural report sent to its shareholders this week, different roles and responsibilities for the partners involved in the joint venture are also outlined.
DIDG will be responsible for the execution of the following work: “Permanent way rehabilitation, installation of signalling and telecommunication systems, refurbishment of rolling stock, ongoing maintenance and other work to be carried out locally,” the report says.
“It is envisaged that an estimated 40% of the capex programme will be spent on locally procured goods and services. This ensures DIDG and locals participate in the rehabilitation programme that will run for a period of three to five years.”
Transnet’s primary responsibility, according to the report, is to the manufacture and supply of rolling stock and train operations management. lt will also provide technical advisory support to DIDG and NRZ in areas such as procurement of signalling systems, per way rehabilitation and other design related works.
“Joint Venture One which is a vehicle owned by the DIDG-Transnet consortium, will raise US400 million and also act as the engineering, procurement and contractor who will deliver against the agreed scope of work.
In terms of the funding infrastructure, the consortium partners are expected to provide an equity injection of US$60 million while banks and development financial institutions (DFIs) fund the balance of US$340 million,” reads the report.
Joint venture one, according to the report, will on-lend the debt to joint venture two which is the concessionaire through delivery of an agreed scope of work and a budget funded from draw downs on the US$400 million.
“Joint Venture two (JV2), which is a vehicle co-owned by Joint Venture one (DIDG-Transnet and NRZ with a shareholding of 60% and 40 % respectively, will be the concession operator replacing the current NRZ rail operations. On a see through basis, DIDG rail will own 29,4 % of the concession operator, while Transnet and NRZ will own 30,6% and 40% respectively”.