AMID unresolved questions surrounding the controversial termination of the US$400 million National Railways of Zimbabwe (NRZ) recapitalisation deal with the Diaspora Infrastructure Development Group (DIDG), Transport minister Joel Biggie Matiza has ordered the board chairperson to swiftly implement the cabinet decision and open the project to new suitors.
This comes as DIDG, the consortium which had won the tender to recapitalise the moribund rail operator, is exploring legal options in light of the termination of its bid.
As revealed by the Zimbabwe Independent in a series of exclusive reports, the termination of the NRZ multi-million dollar deal, which has divided cabinet and sucked in the millitary, has sparked questions, with Matiza accused of manipulating cabinet decisions and outcomes.
It has since emerged that Matiza wrote to NRZ board chairperson Martin Dinha on October 30, instructing him to expedite implementation of the cabinet decision to overturn the DIDG bid while advising the entity’s board to come up with a fresh proposal on reviving the embattled rail operator.
Following the cancellation of the DIDG proposal which had attracted the interest of the African Export-Import Bank (Afreximbank) as the mandated lead arranger as well as various regional banks which had mobilised well over US$1 billion, government dramatically decided to re-tender the project. “I wish to advise you that on 15 October 2019, following consideration of the memorandum by the Minister of Transport and Infrastructural Development on the status of the NRZ-DIDG-Transnet recapitalisation project, cabinet, amongst others, directed that the agreement for the recapitalisation of the NRZ involving DIDG-Transnet be terminated and a fresh tender flighted for the equity participation in the project as matter of urgency,” the letter reads.
“Given the urgency of the matter, I hereby invite the NRZ board and management to come up with revised draft RFP (request for proposal) and TORs (terms of reference), including action plan for the implementation of the cabinet directive taking into consideration the lessons learnt from the DIDG-Transnet project to date, the prevailing situation in the railways sector as well as the general economic and financial environment in the market.”
The correspondence was also copied to Attorney-General Advocate (AG) Prince Machaya, Transport and Infrastructural Development secretary Amos Marawa and NRZ acting chief executive officer Lewis Mukwada.
Although the NRZ board has been advised to ditch the revival plan with the South African consortium, DIDG has not been informed in writing of cabinet’s decision to cancel its bid to pave way for re-tendering the multi-million dollar project. Subsequently, DIDG has accused Matiza of throwing spanners in the implementation of the deal, which was being assessed by Treasury prior to cabinet’s decision to block the project.
Matiza has been pushing hard for a Dubai-based firm, Feonirich Investments LCC, to be awarded the tender. He has also informed Dinha of his intention to meet with the board with the aim of discussing how the October 15 cabinet decision will be executed, among other issues. Feonirich failed to meet the bidding requirements in 2017, but tried to submit its bid behind the back door.
“After consultations with the Attorney-General, I shall invite board and management to a meeting with the ministry and the Attorney’s-General Office to consider your proposed draft RFP, TORs and action plan and map out and agree on the way forward in implementing the cabinet directive,” the letter reads.
As reported by this newspaper, the cancellation of the DIDG bid has sharply divided cabinet, with battle lines drawn between ministers opposed to how Matiza has handled the South African consortium’s proposal to revamp Zimbabwe’s rag-tag rail network. The fight over the deal pits rival groups of officials led by Foreign Affairs and International Trade minister Sibusiso Moyo and Matiza. Senior security service chiefs — from the military and intelligence — had vetted and endorsed the deal. The Zimbabwe Defence Forces’ Major-General William Dube has been sucked into the issue as the NRZ deputy chair.
The aborted DIDG proposal, which had already passed through critical stages of implementation, including provision of interim rolling stock to the NRZ, had courted the interest of various banks that were waiting in the wings with over US$1 billion with Afreximbank injecting US$100 million in its role as the mandated lead arranger.
Indicative funding term sheets seen by this newspaper show that Standard Bank was ready to shell out between US$100 million and US$137 million, Absa (US$200 million), Nedbank (US$200 million) and Nedbank Zimbabwe (US$17,5 million), while the Industrial Development Corporation of South Africa was waiting in the wings with US$100 million.