By Prosper Ndlovu
The National Railways of Zimbabwe (NRZ)’s passenger service is operating at an “unsustainable” loss of $7 600 daily at a time when the company’s mainline bulk cargo transportation business is constrained by weak capacity.
While acknowledging that the passenger rail transportation is a social service that should derive its sustenance from viable bulk freight operations, NRZ board chair, Advocate Martin Dinha, recently said the overhead costs incurred on this service are a heavy burden to the ailing firm.
The company operates commuter trains in selected suburbs in Harare and Bulawayo at a fare of $16 for a single trip. The NRZ also used to offer passenger service for intercity routes linking major cities before they were suspended.
“The burden we are carrying alone for the passenger railway is that we make a $7 600 loss daily, which is not sustainable but it’s a social service that we must provide,” said Adv Dinha.
“As we are moving people from Emganwini to town and Luveve to town we make a loss every day but it’s a social imperative. We have to move people under Covid-19 and now there is the imperative to move people to go to work and do shopping and so forth.
“As we move people from Bulawayo to Harare or Mutare, every train ride we make is making a loss.”
The board chair said the ageing equipment was too costly to maintain with the repair of a single locomotive costing an estimated US$1 million. The company has a lot of business potential and orders from clients “but we are failing, we have no capacity generally, we are at 30 percent capacity utilisation, we earn enough to service the fleet, not enough to break even,” says Adv Dinha who has repeatedly appealed for increased Government-capitalisation support.
“Capitalisation is the priority, rail is an economic enabler because transport costs have to be so low for the industry to move chrome, grain, coal etc. We need 41 locomotives, 300 minimum wagons and 300 coaches,” he said.
The board chair revealed that a normal locomotive requires fuel to the tune of about 200 000 litres of diesel in less than a week. He said the company consumes about two million litres of diesel per month and 20 million litres of diesel per year in addition to regular and labour costs, which gobble the little income generated.
“We are barely breaking even and we continue to be in deficit and continue to be borrowing and living beyond our means. We need to change the whole path but the business is there, I must emphasise,” he added.
“We have customers who need coal to be ferried to various destinations, we have chrome miners, coal miners, nickel miners and copper miners from Zambia to Zimbabwe because Zimbabwe sits on a strategic position, that’s our advantage.”
Adv Dinha and his board recently met Finance and Economic Development Minister, Professor Mthuli Ncube, and a delegation of independent commissioners led by senior officials from the Office of the President and Cabinet.
The board used the engagement tours in Bulawayo to explain the company’s urgent needs for recapitalisation and the potential for viable business.
Prof Ncube has said that in addition to budgetary support, the Government was committed to avail guarantees for capitalisation including granting national project status, key joint venture initiatives that will help revive NRZ.
The company has said it is pursuing strategic partnerships with peers from countries such as Indonesia, Turkey, Russia and China. The Chronicle