Andile Tshuma
THE National Railways of Zimbabwe (NRZ) says the ongoing Russia-Ukraine war had heavily impacted negatively on its operations resulting in one of its major deals with a Russian firm stalling.
In February last year, the government guaranteed the payment of an initial US$1,5 million required to facilitate the delivery of 100 wagons and 40 locomotives by a Russian firm, United Wagon Company, the second largest manufacturer of railway rolling stock in the world.
The deal was two pronged as it involved the setting up of a plant to assemble wagons and locomotives in Zimbabwe for sale to other Sadc countries and the provision of rolling stock for NRZ.
In three years, NRZ was expected to have received 300 wagons from Russia.
However, speaking to the Daily News, yesterday in an exclusive interview public relations manager Martin Banda said the deal was now hanging in the balance.
“We have been in business with a Russian firm, a supplier of rolling stock. We entered a deal with United Wagons for the supply of wagons and the deal was disrupted by Covid-19, and then we faced forex challenges, but now everything was well on track and we were at the final stages, but then came the war.
“It has thrown spanners in this deal, therefore it has stalled and we are just hoping for the best,” Banda said.
He said the European crisis was having drastic effects in the freight business and said the prolonged war situation may further affect future plans and current operations of the NRZ.
“Our locomotives are powered by diesel and as it is, fuel prices are soaring due to the war in Ukraine. We have contracts with our clients to transport their goods. But now we may need to start going back to contracts and adjusting prices otherwise we will operate at a loss.
“But that will not be good business practice and some contracts are binding. This war may seem far off and not directly affecting us, but it is heavily costing us and industry in general. We will continue feeling the impact of it. It is bad”.
Banda revealed that NRZ was preparing for talks with the Russian partner on how business can move forward despite the war disruptions.
“We are making arrangements for an engagement on how we can move forward despite this unfortunate situation and we are angling for the best outcomes.
“We are not able to get anything from Europe at the moment. As long as the war persists, it’s throwing spanners in the programme.”