SI 142 hits NRZ operations
© THE National Railways of Zimbabwe (NRZ) has written to the government requesting permission to collect revenue from exporters in foreign currency after recording a sharp decline in freight cargo volumes last year.
Through Statutory Instrument (SI) 142 of 2019 gazetted in June, the government outlawed the use of multi-currencies and reintroduced the Zimbabwean dollar as the sole legal tender. The law compelled businesses to charge services in local currency.
Appraising the media on the NRZ’s performance in Bulawayo recently, NRZ general manager Lewis Mukwada said the statutory instrument dealt a huge blow to the transport entity’s plans.
“At the beginning of 2019, we sent back five locomotives for servicing. The arrangement then was to plug the gap with hired resources from elsewhere while those were being serviced.
“Unfortunately, SI 142 was introduced. Previously, we had an arrangement where exporters, because they charge for their products including railage in foreign currency, they would remit to us the railage portion of the total cost of the product in hard currency.
“With SI 142, we were now required to collect payment from exporters in local currency. That scuttled our plans to hire the locomotives and that left quite a huge gap in terms of our fleet,” Mukwada said.
He said lack of foreign currency also impacted on NRZ’s ability to purchase spares.
“We had expected to refurbish 10 locomotives. In 2017, we refurbished seven locomotives. Last year, we were only able to do two because we could not access foreign currency to buy spares,” he said.
Mukwada said it was important for the NRZ to be allowed to collect revenue from exporters in foreign currency, saying this would facilitate the acquisition of wagons from Russia as well as the rehabilitation of locomotives and wagons.
He said the NRZ urgently wanted to raise US$1,5 million down payment towards the purchase of Russian wagons which the supplier is insisting on.
NRZ entered into a wagons and locomotives deal with Union Wagons of Russia in October last year and the first batch of 100 wagons was expected to arrive in the country this month.