PRESIDENT Emmerson Mnangagwa this week moved to rein in
Transport minister Joel Biggie Matiza over his bid to scuttle the US$400
million National Railways of Zimbabwe (NRZ) recapitalisation project by
“becoming a real pest in official circles” over the funding issue, the Zimbabwe
Independent can report.
This comes as it emerged that Mnangagwa and cabinet on
Tuesday slammed the door on Matiza’s face as he attempted to intensify his
frantic manoeuvres to derail the Diaspora Infrastructure Development Group (DIDG)
deal and smuggle in through the back door an obscure Dubai-based firm,
Feonirich Investments LLC, which was not even involved in the tender process.
“President Mnangagwa summoned Matiza over the issue on
Monday and told him to explain himself and write a report proving his claims
that there is no money to finance the project. And then cabinet intervened to
stop the minister on his tracks over the issue,” a senior government official
said.
“As far as authorities are concerned, Matiza has now become
a real pest or an annoyance; a nuisance if you like, on this project. Instead
of working with others properly, he seems determined to derail the project and
bring in his preferred consortium which did not even participate in the tender
or bidding process.”
Informed sources said Mnangagwa intervened after it became
clear Matiza was unrelenting in his push to muscle out DIDG from the
multi-million dollar deal.
Following the Independent’s series of exclusive reports
about Matiza’s activities, including his last-dicth effort to block the project
last week on Friday in a meeting with the NRZ board, Mnangagwa summoned Matiza
for a meeting to decisively deal with the issue.The NRZ board meeting in Harare
on Friday last week was also attended by NRZ
chairperson Martin Dinha and his deputy Major-General
William Dube (not Major-General Hlanganani Dube), and NRZ and Transport
ministry officials.
Mnangagwa met Matiza with senior officials in the Office of
the President and Cabinet on Monday to listen to the minister and ask
questions, before telling him what the way forward was.
During that meeting, which was held at President’s
Munhumutapa offices, Mnangagwa listened to Matiza’s issues before asking him to
write a report on that. Matiza insisted to Mnangagwa that DIDG has no money to
fund the project to revamp the moribund rail operator and the associated
infrastructure.
Sources have always pointed out that Matiza’s campaign is
designed to bring onboard Feonirich which even failed to submit its papers
before the bidding process was closed in 2017 by the State Procurement Board,
now the Procurement Regulatory Authority of Zimbabwe.
Feonirich made desperate efforts to submit its papers after
missing the deadline and continued to push to be involved in the deal. Matiza
is said to be working with some few ministers and businesspeople, as well as
transaction and legal advisers who have vested interests in the deal.
Matiza claims DIDG has no money even if the company has
presented the NRZ board and authorities with evidence of funding by African
Import-Export Bank (Afreximbank) as the mandated lead arranger of the
transaction. Afrexim will also inject US$100 million into the project.
A number of big South African banks have also indicated
they have money to fund the project, by providing term sheets of close to US$1
billion.
However, the funders have not released the money pending
the signing of relevant agreements, particularly the Joint Venture (JV)
Agreement needed to establish a new concesion company to implement the project.
A team from Finance ministry and the Resreve Bank of
Zimbabwe is currently working on that process. Sources said after meeting
Matiza on Monday, Mnangagwa then met Dinha on Tuesday to get his side of the
story in relation to the row over funding. While Matiza says DIDG has no money
and insists that the funding must first to deposited to government or NRZ
accounts, Dinha has provided his board and authorities with funding details
showing that the money is there. Afrexim itself has confirmed to authorities
that they will fund the project.
Mnangagwa and NRZ officials, sources said, have told Matiza
that it was not serious for him to expect a technically insolvent entity like
NRZ, saddled with a US$500 million debt overhang, to directly receive any
capital injection through its structures or accounts.
The sources said Matiza has been told that the money will
only come through after the JV Agreement has been signed. The money will go to
the new concession company tasked with implementing the project.
“During the Monday meeting, the President emphasised that
NRZ, crippled by a US$500 million historical debt, would not get any money
transferred directly to them. No-one in his/her right mind will put his money
there. So to have the minister telling the President that DIDG has not proven
it has money because he wants a proof of payment or deposit and US$400 million
reflecting in the NRZ account is utterly ridiculous,” one source said. “It
clearly demonstrates the minister’s lack of understanding of how projects of
this nature are financed. If you have term sheets, you now have proof of
funding capacity. Banks are not stupid to issue term sheets for something not
worth funding. In this case, DIDG has attracted the interest of banks with well
over US$1 billion when only US$400 million is required to implement the
project.”
Matiza was yesterday not answering his phone and neither
had he responded to WhatsApp messages, although he read them.
Dinha’s secretary said the NRZ chairperson was not
available as he nursing a heart ailment.
After the Monday meeting with Mnangagwa, sources said,
Matiza was persistent as he attempted to use the cabinet meeting on Tuesday to
further the “narrative that DIDG had failed to provide proof of funding crucial
towards rolling out the multi million project.”
However, sources said during the cabinet meeting Matiza was
reminded by International Trade and Foreign Affairs minister Sibusiso Moyo and
Chief Secretary to the President and Cabinet, Misheck Sibanda, that Mnangagwa
had the day before resolved the funding row.
“Matiza has been contradicting the President, his
appointing authority, and has been seeking to mislead cabinet. For the deal to
progress, Treasury and government need to move swiftly and allow NRZ to sign
the JV Agreement so that implementation can begin. DIDG has demonstrated the
funding capacity that it is ready to move,” a source said.
“So what else does Matiza want? Feonirich? Only in Zimbabwe
can a minister try to get away with such murder.”
Sources said implementation of the deal, being scrutinised
by Treasury for due diligence and approval, would start once the JV Agreement
between DIDG and NRZ is signed.
Once formed and incorporated, the new concession company
will receive money Afrexim and other regional banks waiting in the wings with
well over US$1 billion to bankroll the project.
According to funding term sheets and proposals seen by the
Independent and presented to the NRZ board on August 30, over US$1 billion is
available for the project with Afrexim having tabled a solid funding proposal,
the sources said.
Mnangagwa underscored the urgency of implementation of the
project during his state-of-the-nation address and official opening of the
second session of the 9th parliament last week. Zimbabwe Independent
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