Subscribe for Updates

Read Endeavour Magazine

Business Profiles

National Railways of Zimbabwe: Back on track

When Zimbabwe’s economy hit a crisis in the early 2000s, it had affects to the country that are still being reversed today. However, with new government initiatives, investing companies and drive, revival and innovation is able to thrive. We spoke with Nyasha Maravanyika, the Public Relations Manager for the National Railways of Zimbabwe (NRZ) about the exciting, wide-scale changes that the country’s railways are finally undertaking, and the huge impact this could have on not only Zimbabwe, but its southern African neighbours as well.

At the start of the millennium, Zimbabwe’s economy experienced extreme difficulty, and for some industries, this had long-lasting consequences that have only recently begun to change. After the year 2000, the country fell victim to widespread poverty, with a 95% unemployment rate – a situation that was then compounded by hyperinflation ravaging the economy from 2003 to 2009, which hit a peak of 231 million % hyperinflation in 2008. This unthinkable situation began, in part, due to the expenses of Zimbabwe’s participation in the 1998-2002 war in the Democratic Republic of Congo, and was re-set in 2009 when the company abandoned its currency. However, the aftermath still had its challenges, but more dramatic turns towards improvement began from 2017, when Emmerson Mnangagwa took over presidency of the country.

“The industry has been slow because of what the country has been through. The National Railways of Zimbabwe’s equipment has been running out on a regular basis, so it meant that our capacity was being reduced each year, and we didn’t have the capacity to purchase new equipment because of the fiscal situation of the country.”

Zimbabwe’s railways were laid down in 1890s, and many of the tracks have not been updated since then. Now, finally, the entire rail system is receiving a major overhaul, including not only the tracks but also the signals system and the locomotives themselves. This is a giant undertaking, and was only recently made possible through the security of an investor:
“The changes began to happen in 2014, when the government allowed us to recapitalise the National Railways of Zimbabwe. Previously, they had been looking for part-players to come in to do piece-jobs for the railways, but this time the government has allowed us to go all-out to look for investors. However, our balance sheet, which was not very attractive to investors, so the government allowed us to rope in a financial advisor.” In 2016, this financial advisor assisted NRZ in putting together a business strategy that it could take to investors to show the railway’s true financial potential, and in 2017, the company held a conference to this effect in Bulawayo. This conference was a great success, attracting 82 possible investors from around the world, including Russia, China, South Africa, the UK, Switzerland and also some local groups. In August 2017, these 82 names were whittled down to six candidates, and from there, NRZ chose its investor: DIDG-Transnet, which was formed with a group of Zimbabweans teamed up with South Africa’s Transnet Rail Group to pursue this investment.

Negotiations with DIDG-Transnet are still underway, but the first injection of support has already been delivered. “At one time, we had over 3,000 wagons, close to 1000 locomotives and over 2000 coaches. These numbers have now dwindled, and we need to get more equipment.” As a part of their negotiations with their sponsor, NRZ requested and received an initial contribution to re-boosting these numbers, taking delivery of 200 wagons, 13 locomotives and 34 coaches in February 2018. The first injection of funding that NRZ has asked for is US$400 million, but achieving everything that it wants to do could total up to US$ 1.7-1.9 billion, with work taking as long as 25 years for everything to be complete.

As a part of this work, as well as replacing the country’s railway tracks and locomotives, NRZ also wants to restore its communication and signals system, which has been vandalized in many places. This vandalism has also taken its electric rail lines out of commission. “Zimbabwe was among the first countries in Africa to have electrically powered locomotives, and we had an electric track from Gweru up to Harare. Due to vandalism of the track, where people wanted copper cables and aluminum, among other things, that track is no longer working electronically, so we have reverted back to our diesel locomotives.”

Restoring this is a key goal for NRZ. In terms of short-term goals, NRZ is aiming to increase its business tonnage from the 3.4 million tonnes it achieved in 2018 to 4.2 million tonnes in 2019. “We have also lined up proposed rail routes to connect the region with Harare-Kafue (Zambia) rail and Harare-Moatize (Mozambique) being the notable routes which are ear-marked for the next five years.”

Zimbabwe’s railways is beneficial not only for movement within the country, but also to enable the country to efficiently act as the southern African hub that it is: for countries such as the Democratic Republic of Congo, Zambia and Malawi, Zimbabwe provides a route to the coastline, and therefore to the ports in Mozambique, South Africa and Namibia. This opens the entire region up for trade, and whilst Zimbabwe currently plays a part in this, an overhauled rail system would greatly improve the part it plays.

Improved transportation should also, NRZ and its investors hope, help to open up tourism areas, which in turn could open up Zimbabwe’s real estate potential in these areas. “Zimbabwe is endowed with great tourist resort areas, among them the Victoria Falls – one of the eight wonders of this world. We have a railway line from Victoria Falls up to Mutare, and in Victoria Falls, we have land that is suitable for hotels and shopping malls. We want to lure investors who can develop this land – we are opening it up for business.”

Easy and direct transportation will be a great boon to Zimbabwe’s tourism industry. However, simple transportation to these locations alone is not enough for NRZ: the company is seeking to truly utilize what it has, and despite its current focus on updating its entire rail system, is has realised that some of its older locomotives do hold value. Namely, its steam trains. “We have found potential in our steam locomotives, which are popular with train enthusiasts, so we started diversifying into the ‘steam train experience’.”

Nyasha believes that Zimbabwe is one of the few countries left in Africa that still possesses and operates its steam trains, and as the NRZ has discovered, these can have a strong draw factor, especially to foreign holiday makers. “They attract a lot of foreigners from the US, the UK, France, Germany, Japan and other countries: a lot of these foreigners are enthusiastic about the steam trains – they want to board them and spend time in them. Our local people are warming up to it now as well.” The railway is now putting its steam trains to use with special trips on days such as Mother’s Day, Father’s Day or the Easter Holiday, in runs setting off from Bulawayo and Harare. The popularity for this venture is starting to take off, and the government’s tourism association is now starting to take interest and support the attraction, such as coordinating steam train rides to mark events such as Bulawayo’s 125 years anniversary for the city.

NRZ currently employs 4,800 members of staff. On the most-part, the company seeks to promote from within, with only a few of the top positions open to recruiting form the outside; to support this, the company also offers extensive training, to the extent that it operates its own training centre. Only a handful of railway companies in African can say that they have a centre like this – at it, not only does NRZ train artisans and other necessary skilled people for their own company, but it offers wider engineering training to the people of Zimbabwe.

This training centre is of great benefit not only to NRZ but the country at large, helping to “unlock the engineering potential” of the country, as Nyasha put it. However, this is only one of the ways in which the NRZ is going beyond the railway system to help Zimbabwe flourish. During the economic difficulties that beset the country in the early 2000s, many businesses were forced to close under the financial pressure. The cities of Bulawayo. Harare and Gweru saw many of their engineers go out of business, and with this came a slowing and incapacitation of industry. Thankfully, NRZ saw this need and stepped forwards with a solution:

“We have massive mechanical engineering workshops which have the potential to develop and establish equipment for the various industries like mining, manufacturing, agricultural and engineering. Our workshops were originally used for the maintenance of our equipment, and the building and developing of our equipment, but since the economic meltdown in the 2000s we decided that we should unlock value in our mechanical workshops, and to do this we created a brand called Interrail Tech.”

Interrail Tech applied NRZ’s railway engineers towards the other industries that needed their expertise, and through developing on their skills and expanding their knowledge, they were able to fill this need for all of the industries that had suddenly been left wanting. “Interrail Tech is there to unlock the potential of our engineering expertise and to do something for the Zimbabwean communities that lost a lot of companies that were doing things in terms on engineering.”

Through Interrail Tech, NRZ supports many companies through its services, but the company has also benefited from many strong partnerships from other companies throughout Zimbabwe. These ties include Pretoria Portland Cement, Lafarge Cement, Makomo Resources, the Zimbabwe Power Company, and steel producers Zimasco, who focus on the production of ferrochrome.

Together, support of the railways should boost and assist Zimbabwe as a whole, through the benefits and ease leant to trade, the boost in tourism, the unlocking of real estate, and on top of that, the additional support that NRZ is able to give to a wide spectrum of industries within the country. This ambitious 25-year project will develop in stages, along with the wider developments happening throughout Zimbabwe as it continues to recover and flourish; we look forward to keeping our eye on the industry as it evolves, and watching how farthe dominoe effect of that new strength goes.