CABINET ministers took their fight over the $400 million National Railways of Zimbabwe (NRZ) recapitalisation deal to Zimbabwe’s bilateral economic talks with South Africa early this month, amid indications businessman Enock Kamushinda is leading a spirited rival bid for the project.
A consortium of non-resident Zimbabwean professionals, the Diaspora Infrastructure Development Group (DIDG), in partnership with South Africa’s Transnet, won the tender to revive the ailing state-owned rail company last month.
However, Cabinet has withheld approval for the deal, following opposition led by ministers Supa Mandiwanzira, Obert Mpofu and Prisca Mupfumira, who was dropped in a reshuffle this week.
Multiple sources told The Financial Gazette this week that preparatory meetings ahead of last week’s Bi-National Commission summit led by President Robert Mugabe and his South African counterpart Jacob Zuma got bogged down in a heated discussion over the inclusion of the NRZ-DIDG-Transnet transaction on the agenda.
“If you recall, there were five agreements whose signing was overseen by the presidents during the bi-national commission. The NRZ recapitalisation project was supposed to be the sixth, but it was struck off after fierce opposition from ministers Chombo and Mupfumira,” one source said.
Another source said DIDG has now written to Mugabe in a bid to salvage the NRZ transaction. The consortium has also been reconfigured to include a 10 percent shareholding to be held under the National Indigenisation and Economic Empowerment Fund (NIEEF).
DIDG, which currently has over 500 members, plans to raise $1 billion annually from about 1 million non-resident Zimbabweans for investment into the country. The group has managed to raise $1 billion for the NRZ transaction from four South African financiers.
Meanwhile, Kamushinda, whose bid is reported to enjoy the support of newly appointed Finance Minister Chombo and Mandiwanzira, among others, is reported to be pushing for a memorandum of understanding on the NRZ recapitalisation, which he hopes to use to unlock funding from unnamed Dubai financiers.
“Since the NRZ deal was pronounced dead, Kamushinda and his associates have been pushing. But NRZ is unnerved by the prospect of a lawsuit if the tender award is cancelled,” another source said.
Kamushinda was non-committal when contacted for comment telling us, “When I was young, I used to enjoy speaking to the press about my pending business deals.” The Financial Gazette