News / National
NRZ / DIDG deal hits a funding snag
16 May 2019 at 06:49hrs | Views
TRANSPORT minister Joel Biggie Matiza yesterday told the National Assembly that the $400 million National Railways of Zimbabwe and DIDG Transnet deal which President Emmerson Mnangagwa commissioned last year, had hit a funding snag.
Matiza said the problem was a contractual issue, where DIDG Transnet was awarded the deal to refurbish NRZ under the condition that they would raise money within 12 months, but they failed to do so.
"We said if the money and proof of funding were not there, then we cannot expose ourselves because the fundamental issue was of proof of funding," he said.
"The information on funding was not given and the final 12 months agreement expired and we had to give them another extension of six months, but we removed the exclusivity clause to allow other external investors to come in."
Matiza said now government was coming up with a policy framework to ensure there is a sustainable rail system in the country.
But MPs were not impressed with his responses, with Norton MP Temba Mliswa (independent) demanding to know why government failed to get rid of DIDG/Transnet immediately after they failed to honour the contract in the first 12 months.
Kambuzuma MP Willias Madzimure (MDC Alliance) also asked: "What due diligence was done on DIDG and Transnet before awarding them the contract?"
Matiza said after they failed to invest in the first 12 months, government then removed the exclusivity clause. He said due diligence was done during negotiations of the contract.
Dangamvura Chikanga MP Prosper Mutseyami (MDC Alliance) accused the government of lacking seriousness, adding that the DIDG contract should not have been extended.
"Outside the norms of doing due diligence on the contract, you then give them another six months yet we have seen challenges in this country of clear failure and a company that has failed is given another chance to extend the contract. The minister is on live television and he is telling us about failure," Mutseyami charged.
Matiza said the problem was a contractual issue, where DIDG Transnet was awarded the deal to refurbish NRZ under the condition that they would raise money within 12 months, but they failed to do so.
"We said if the money and proof of funding were not there, then we cannot expose ourselves because the fundamental issue was of proof of funding," he said.
"The information on funding was not given and the final 12 months agreement expired and we had to give them another extension of six months, but we removed the exclusivity clause to allow other external investors to come in."
Matiza said now government was coming up with a policy framework to ensure there is a sustainable rail system in the country.
But MPs were not impressed with his responses, with Norton MP Temba Mliswa (independent) demanding to know why government failed to get rid of DIDG/Transnet immediately after they failed to honour the contract in the first 12 months.
Kambuzuma MP Willias Madzimure (MDC Alliance) also asked: "What due diligence was done on DIDG and Transnet before awarding them the contract?"
Matiza said after they failed to invest in the first 12 months, government then removed the exclusivity clause. He said due diligence was done during negotiations of the contract.
Dangamvura Chikanga MP Prosper Mutseyami (MDC Alliance) accused the government of lacking seriousness, adding that the DIDG contract should not have been extended.
"Outside the norms of doing due diligence on the contract, you then give them another six months yet we have seen challenges in this country of clear failure and a company that has failed is given another chance to extend the contract. The minister is on live television and he is telling us about failure," Mutseyami charged.
Source - newsday
