Business / Companies
UK company suing NRZ over a £2,7 million debt
15 Jun 2011 at 03:27hrs | Views
RAILWAY Wheelset and Brake, a British firm, is suing the National Railways of Zimbabwe over a £2,7 million debt, according to legal documents.
NRZ owes the money for spare parts supplied to the struggling State-owned company.
But NRZ is challenging the claim, accusing the British firm of overpricing and supplying sub-standard parts for its electric locomotives.
In papers filed at the Bulawayo High Court last week, Railway Wheelset and Brake argue that the NRZ accepted its indebtedness in June 2009, and had undertaken to pay half of the debt by August 2009, followed by monthly payments of £100 000.
In the court papers, the lawyer representing Railway Wheelset and Brake, said:
"The NRZ has breached the agreement in that it has not paid on due date or at all one half of debt and has failed to pay the agreed £100 000 monthly instalments and remains indebted in the sum £2 688 943,42, which sum, despite demand, the NRZ fails to pay."
The NRZ is disputing the amount owing.
The parastatal says that at a meeting on March 4 last year, the British firm agreed upon provisional figures that were yet subject to confirmation of compliance "with specifications before acceptance".
"The NRZ has carried out an audit which has shown, under delivery, poor quality, incorrect com- pliance and specifications and gross and unlawful overpricing of goods delivered," said NRZ in opposing papers.
The company also insists that it has been paying the monthly instalments pending the resolution of the exact amount owed to the British company.
Notwithstanding the huge financial constraints that NRZ is facing, it has indicated plans to rehabilitate the rail infrastructure after it recently secured 12 000 tonnes of rail from China.
The NRZ has said it intends to acquire 14 locomotives worth an estimated US$29 million from the same source.
This is despite huge short-term recapitalisation requirements of at least US$274 million.
Meanwhile, the African Development Bank has estimated that the NRZ needs US$490 million for replacement of locomotives, and around US$355 million for replacement of wagons and passenger cars in the decade from 2011.
NRZ owes the money for spare parts supplied to the struggling State-owned company.
But NRZ is challenging the claim, accusing the British firm of overpricing and supplying sub-standard parts for its electric locomotives.
In papers filed at the Bulawayo High Court last week, Railway Wheelset and Brake argue that the NRZ accepted its indebtedness in June 2009, and had undertaken to pay half of the debt by August 2009, followed by monthly payments of £100 000.
In the court papers, the lawyer representing Railway Wheelset and Brake, said:
"The NRZ has breached the agreement in that it has not paid on due date or at all one half of debt and has failed to pay the agreed £100 000 monthly instalments and remains indebted in the sum £2 688 943,42, which sum, despite demand, the NRZ fails to pay."
The NRZ is disputing the amount owing.
The parastatal says that at a meeting on March 4 last year, the British firm agreed upon provisional figures that were yet subject to confirmation of compliance "with specifications before acceptance".
"The NRZ has carried out an audit which has shown, under delivery, poor quality, incorrect com- pliance and specifications and gross and unlawful overpricing of goods delivered," said NRZ in opposing papers.
The company also insists that it has been paying the monthly instalments pending the resolution of the exact amount owed to the British company.
Notwithstanding the huge financial constraints that NRZ is facing, it has indicated plans to rehabilitate the rail infrastructure after it recently secured 12 000 tonnes of rail from China.
The NRZ has said it intends to acquire 14 locomotives worth an estimated US$29 million from the same source.
This is despite huge short-term recapitalisation requirements of at least US$274 million.
Meanwhile, the African Development Bank has estimated that the NRZ needs US$490 million for replacement of locomotives, and around US$355 million for replacement of wagons and passenger cars in the decade from 2011.
Source - TNZ
