The agreement could give NRZ a route to new bulk traffic, with Grand Railway Solutions supplying the locomotives, wagons and fuel and NRZ supplying the infrastructure and train crews. If the volumes in the agreement are realised, the 1.7 million tonnes a year would add to the tonnage NRZ carries and, as NRZ describes it, move the bulk of coal traffic from Hwange from road to rail.
For coal and steel producers, rail haulage at this scale could lower transport costs, which NRZ says would help Zimbabwean products compete on the global market. Should the 50km Mvuma to Manhize line be built under the proposed build-transfer-operate model, it would also show how a private partner can finance a rail link to an industrial site and hand it over to the operator.
- NRZ has signed a Strategic Collaboration Agreement with Grand Railway Solutions covering rail traffic to and from the Manhize steel plant in Mvuma.
- The agreement provides for 1.1 million tonnes of coal a year to be moved to Mvuma and 600,000 tonnes of steel products a year to be moved to market.
- Grand Railway Solutions will provide locomotives, wagons and fuel, and NRZ will provide the infrastructure and train crews.
- A second phase provides for upgrading the railway between Gweru and Mvuma at an estimated cost of about $27 million.
- A later phase provides for a 50km line from Mvuma to Manhize under a build-transfer-operate model.
- Grand Railway Solutions will finance the Mvuma to Manhize line and transfer it to NRZ, recovering construction costs through offsets.
The National Railways of Zimbabwe (NRZ) has signed a Strategic Collaboration Agreement with Grand Railway Solutions (GRS), a local logistics company, to transport 1.7 million tonnes a year of raw materials, mainly coal, and finished steel products by rail to and from the Manhize steel plant in Mvuma.
Under the PPP arrangement, GRS will provide locomotives, wagons and fuel, while NRZ will provide the infrastructure and the crews to operate the trains.
The agreement provides for 1.1 million tonnes of coal a year to be moved to Mvuma, and for 600,000 tonnes a year of steel, including pig iron, steel billets and other products, to be moved to market.
In a second phase, the two parties will work together on upgrading the railway between Gweru and Mvuma to the required standard, at an estimated cost of about $27 million. NRZ says the upgrade will allow significantly increased traffic volumes on the line.
The phase after that is the construction of a 50km line from Mvuma to Manhize, linking the steel plant to the railway network under a build-transfer-operate (BTO) model. GRS will finance construction of the line and transfer it to NRZ, which will operate it, with the cost of construction recovered through offsets.
NRZ says the deal will significantly increase its annual tonnage while moving the bulk of coal traffic from Hwange from road to rail. It adds that the arrangement will significantly reduce the cost of production and help ensure that Zimbabwean products are competitive on the global market.
The Gweru to Mvuma upgrade and the Mvuma to Manhize line are both described as later phases of the agreement, and NRZ has not given a timetable for either, or a start date for the coal and steel haulage.
