GOVERNMENT has removed the exclusivity clause for the
US$400 million National Railways of Zimbabwe (NRZ) recapitalisation deal after
investors for the project failed to provide proof of funding within 12 months
of the framework agreement.
In 2017, the Diaspora Infrastructure Development Group
(DIDG)/Transnet consortium won a tender to recapitalise and rehabilitate the
strategic railways firm.
Under the framework arrangement, investors (DIDG) were
required among others to provide Government with proof of funding of the
project.
And as part of an interim solution to NRZ resource gaps,
the parastatal is leasing 13 locomotives, 200 wagons and 34 passenger coaches
from Transnet. Responding to questions in Parliament over the issue, Transport
and Infrastructural Development Minister, Joe Biggie Matiza, said although the
framework agreement had been extended by six months to August this year, the
exclusivity clause has been removed in order to allow competition from
potential investors to the project.
The exclusivity clause empowered the consortium with
exclusive rights to negotiate the US$400 million NRZ recapitalisation deal. And
it is also understood that Government has started working on various proposed
frameworks and models to resuscitate the parastatal, if the envisioned suitors
fail to come up with a lucrative deal.
“We have many of our people who are either here or in the
Diaspora but the fundamental issue is that of proof of funding that did not
come.
“The final agreement within the 12 months expired and we
had to give them an extension of another six months. We actually should not
have done that,” said Minister Matiza.
“We removed the exclusivity clause to allow other people,
we could have had serious contractors who could have our rail ticking.”
The removal of the exclusivity clause means that the
proposed recapitalisation and rehabilitation of NRZ is now open to competition
from other potential investors. In February, Cabinet extended the framework
agreement period of the US$400 million recapitalisation project to August to
finalise outstanding issues.
Min Matiza said the framework agreement was extended after
South Africa’s ambassador to Zimbabwe Mr Mphakama Mbete together with a
delegation from DIDG/Transnet pleaded with Government to ‘relook” at the matter
and give them an additional six months to produce the desired results.
“In give-and-take situations, we looked at the environment
in which we were discussing these issues and we granted them the six months but
without the exclusivity clause,” he said.
“After that (expiry of the 12 months framework agreement),
we removed the exclusivity clause and we also wanted to give them that
opportunity to do that (finalise outstanding issues) and allow other
competitors to come in. So, it does not prejudice anybody,” he said.
Minister Matiza said the US$400 million deal was above
board and DIDG/Transnet consortium won the contract to refurbish NRZ
infrastructure as well as raise money for the project after a due diligence was
done.
“On the issue of due diligence; it was done and that is how
they managed to get the contract in the first place,” he said.
Under the arrangement, the minister said: “There was a
framework agreement in which they were given 12 months to raise that money,
negotiate and bring all the relevant information that would give confidence to
the Government.
“Within the 12 months, the consortium could not provide the
information required or proof of funding and if those things are not there, we
cannot expose ourselves to things that are not correct.”
Minister Matiza said as Government they could not delay the
recapitalisation and rehabilitation of NRZ as the entity was strategic to the
country’s economy.
The parastatal requires about $1,9 billion in the long-term
to fully recapitalise operations. Chronicle
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