NRZ lays recovery plan

NRZ lays recovery plan
Published: 30 November 2017
THE National Railways of Zimbabwe (NRZ) says it will sign more service level agreements with major customers next year to boost business.

NRZ general manager Lewis Mukwada told NewsDay that the parastatal was looking forward to sign more service agreements with major customers after it successfully signed with Zimasco and CFM of Mozambique last month.

The deal will see NRZ moving about one million tonnes of chrome annually from the Great Dyke to the ports of Beira and Maputo along the Mozambican rail network.

"This is a model that we are going to be using with each of our major customers. So we have done those two, we are working on a number of other customers in the coming year so that we perpetuate that model," Mukwada said.

The service level agreement makes business efficient and sustainable, he said.

"The idea, previously, we used to quote our customers on a tariff from where they were up to the border. For example, we would quote up to Beitbridge and beyond Beitbridge, the South Africans will quote. Or if we are going to Beira, we would quote up to Machipanda and then outside that the Mozambicans will quote. But our competition, road, pick from origin right up to the port and they will quote the full distance," Mukwada said.

"So we realised that for us to regain the business we needed to sit down with our colleagues and negotiate jointly on a tariff that is competitive with the customer so that we would quote on a through rate. The idea of signing an agreement is that customers are now demanding service," he said.

He said NRZ undertook to deliver goods in prescribed number of days and they agreed to target the volumes that they are going to move.

"Then there are penalties in the agreement. If we fail to move the volumes or fail to deliver in the time they want, we are penalised by them."

"If they in turn fail to give us business, we also then penalise them so that at least we mobilise resources knowing that business is guaranteed. They also give us the business knowing that we are guaranteeing the resources," he said.

NRZ is finalising a $400 million recapitalisation deal with a consortium led by the Diaspora Infrastructure Development Group and South Africa's Transnet. It anticipates to move 3,2 million tonnes of freight by year end.

Next year it targets to move 4 million tonnes.
- newsday
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