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NRZ expects to fail to achieve target again

by Staff reporter
26 Jul 2020 at 10:57hrs | Views
THE National Railways of Zimbabwe (NRZ) will for the second consecutive year likely miss its annual freight movement target largely owing to the impact of Covid-19.

NRZ public relations manager Mr Nyasha Maravanyika told Sunday News Business last Thursday that the rail entity was likely to miss its revised target of 3,4 million tonnes due to a myriad of challenges chief among them being the effects of the global respiratory disease outbreak.

Last year NRZ failed to achieve its target of hauling 4,2 million tonnes of cargo, only managing to transport 2,8 million tonnes, 17,6 percent less compared with the 2018's achievement of 3,4 million tonnes.

"We may not achieve the target we have set, especially judging by the way the economy is performing and also the stop-start situation of the Covid-19 where sometimes we think we are ready to go and then there is a spike, the Government is forced to put more measures, considering that, we may not be able to reach our target because we had targeted 3, 465 591 metric tonnes," said Mr Maravanyika.

The rail entity has already recorded a decline in the second quarter this year compared to the same period last year. Last year the company managed to haul 1 302 075 tonnes of freight as from January to June and this year it achieved 1 086 937 during the same period, a decline of 16, 5 percent.

"Just by the way of judging and anticipation, the third quarter output might be around one million (tonnes of freight) and depending on the fourth quarter output . . . which could be around 700 000 tonnes . . . so we are likely to be 71 813 short (of our annual target), which is probably 21 percent decline from last year . . . ," said Mr Maravanyika.

He said the prevailing economic pressures have had a negative impact on NRZ as it has also affected the capacity of its customers.

"There are so many challenges that 2020 have brought to fore. The performance of the economy has been bad, looking at the tail end of 2019 coming into 2020 and our performance is basically a mirror image of the economy. If the economy doesn't perform, it means we are also affected because we will not be able to achieve what we wanted to achieve since a lot of players' planned capacity utilisation and performance has not been achieved or will not be achieved. There was no capacity for most organisation to stock pile," said Mr Maravanyika.

The halting of operations at one of its biggest customers, Zimasco significantly affected NRZ's hauling business. Zimasco temporarily suspended operations at the beginning of March after the global pandemic, Covid-19, took its toll across the globe resulting in reduced demand for the product.

"Zimasco is one of our big players, big customers, Covid-19 caused them to shut down their smelter operations in Kwekwe. There was also suspension of chrome ore movements from the following places which are Shurugwi, Lalapansi, Guinea Fowl, Chomvuri, Kashambi and Hambakwe. These small places there would emit around 13 000 tonnes of chrome ore a month to Zimasco and we would usually have 6 000 metric tonnes per month going to Maputo from Zimasco but the shutdown really affected us," said Mr Maravanyika.

NRZ is also feeling the pinch from the slowdown in exports of commodities such as chrome ore, iron ore and granite.

"There was also the slowdown of exports like granite because of Covid-19, the main market for granite is Europe, mainly Italy then followed by Greece . . . so with Italy not having business, it meant that exports for granite suddenly stopped. There was also the general shrinkage in demand which affected our chrome ore, ferro chrome and iron ore. There was a general shrinkage of these three because the main player, China was hit by Covid-19," said Mr Maravanyika.

To add more woes to the rail entity, it had not realised much business from one of its major revenue earning initiatives, the moving of sugar cane to milling plants in the south eastern areas of the country as farmers are opting for road transport in their bid to ensure that their produce reaches manufacturing plant in time before losing much value.

Sugar producing company Tongaat Hullet was the biggest contributor of the 2,8 million tonnes moved by the company last year accounting for more than 1 million tonnes with the other players to move large volumes of cargo being the Zimbabwe Power Company and Zimasco.

NRZ was also pinning hopes on obtaining business from a number of national projects that had been earmarked to take off this year but could not be kick-started due to the outbreak of Covid-19.

"We had a number of public infrastructure support programmes that we were anticipating through the Government Public Sector Investment Programme. We were definitely anticipating getting something from Government, especially in the first quarter but as we all know priority then turned to the health of the nation and it meant that the Government focused on the fight against Covid-19. All the projected funds and support that we were supposed to get, we unfortunately didn't get," said Mr Maravanyika.

The company had also hoped that ferrochrome producer, ZimAlloys would restart operations this year while much was expected from fertiliser producers with regards to enhanced productivity but there was no change.

Mr Maravanyika also noted that the company was still grappling challenges of dilapidated rail infrastructure and obsolete equipment, which includes locomotives, coaches and wagons.

Source - sundaynews

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