Friday, 19 April 2019

NRZ BOSSES SABOTAGE DEAL TO PROTECT JOBS


SENIOR managers at the National Railways of Zimbabwe (NRZ) are trampling on and changing through the back door the terms and conditions of the US$400 million recapitalisation deal with South African railway utility Transnet and the Diaspora Infrastructure Development Group (DIDG) in a bid to throw spanners in the works to save their jobs and other interests, it has surfaced. 

Various sources from NRZ, Transnet and official circles said this week after being beset by hurdles from transaction and legal advisers, the deal is now facing internal obstacles: NRZ top management’s vested job preservation interests.

Sources said as part of their bid to undermine the project, NRZ managers, working with transaction and legal advisers, had influenced Minister of Transport Joel Biggie Matiza into changing the exclusivity clause following the expiry of the framework agreement in February. The agreement has been renewed for six months upon which full implementation must start rolling out on the project now a bilateral matter between South Africa and Zimbabwe dealt with at ministerial and presidential levels.

Documents seen by the Zimbabwe Independent from local sources show that the exclusivity provision was removed from the framework agreement on the advice of law firm Dube, Manikai & Hwacha (DMH), the legal advisers, and Deloitte & Touche Zimbabwe, transaction advisers, as well as NRZ managers.

DMH had recommended in their update report on the deal: “It is, therefore, our opinion that any extension should exclude the exclusivity undertaking in the expired framework agreement.”

This did not go down well with Transnet and DIDG who still feel this has created room for interference and sabotage by those who want the deal to fail to bring in through the back door their preferred NRZ partners.

A Transport ministry official said: “NRZ managers who fear losing their jobs and want to cut underhand deals are now taking advantage of the new non-exclusivity clause which they smuggled into the deal following the expiry of the framework agreement in February. The clause, which allows the NRZ to deal with other companies, is now being abused to change the deal’s terms and conditions.”

The Independent understands NRZ managers are now floating tenders which effectively parcel out various parts of the project to their preferred companies on terms that violate the original agreement. They are also recruiting workers, leaving the state rail utility and government exposed to litigation, sources said.

“What is happening is clearly disruptive. For instance, the notification given to Transnet by NRZ to start returning their locomotives on the basis that there is no demand or business for them, while at the same time floating a tender to lease 12 locomotives and 10 wagons from another company,” the source told Independent. “The NRZ managers are also said to have signed a contract with a local company, in which they have interests, to supply locomotives to NRZ. The local company has apparently roped in the services of a British rail company to help fulfil the contract.”

A highly-placed government source said NRZ management’s actions indicate efforts to either comprehensively restructure the deal in their favour, derail it or sabotage; the same accusations levelled against transaction and legal advisers.

The situation has created tensions between the NRZ management and the board, which is supporting the project, sources added.

The NRZ management is also accused of proposing the removal of the exclusivity clause from the framework agreement without consulting the DIDG-Transnet consortium, claiming it was Matiza’s proposal.

However, documents sent to Matiza from NRZ management indicate that the proposal was smuggled in by managers, and not the minister.

Deloitte had initially recommended to the NRZ and Matiza to amend the exclusivity clause only to allow the NRZ to procure in the short-term for up to $20 million in agreement with DIDG-Transnet so that it can be easily assimilated into the final deal, but the managers have been doing more clandestinely.

The engagement of a local company in a deal to supply locomotives to the NRZ which, in turn, roped in a British company, has raised questions around the NRZ’s managers’ seriousness in supporting the recapitalisation project.

“NRZ owes over R50 million to Transnet for the current leased fleet,” a Transnet official said. “Yet they are now saying they want to return some of the locomotives which were part of the interim solution. Nobody understands their agenda anymore. How do you return locomotives saying they are not being used, while at the same you are hiring some from else?”

Officials said NRZ risked violating the country’s procurement regulations which prohibit negotiation with other suitors when a public tender process is still open.

“It looks like NRZ management is searching for a new deal through the back door which would see most of the senior executives retain their jobs and continue to pursue self-interests at the expense of the government and employees who want to see the deal signed and implemented urgently,” the source said. “Another indication of NRZ management’s duplicity and them acting in pursuit of private interests is the recently advertised recruitment drive for engineers with not less than five years’ experience in engineering in a railway operations environment.”

As part of the deal, NRZ has already taken delivery of 13 locomotives, 200 wagons and 34 coaches leased from Transnet under the recapitalisation framework. 

Efforts to get comment from Matiza and NRZ were unsuccessful last night. Zimbabwe Independent

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