News / National
NRZ, Beitbridge Bulawayo Railwayink open access deal
22 Jul 2024 at 07:47hrs | Views
The National Railways of Zimbabwe (NRZ) has signed an open access agreement with its subsidiary, Beitbridge Bulawayo Railway (BBR), to enhance rail capacity and expedite deliveries by allowing private operators to utilize its network. This initiative is expected to generate additional revenue and new business opportunities for NRZ, potentially increasing its 2024 traffic projections from the budgeted 2.685 million tonnes to around four million tonnes. NRZ owns a 15 percent shareholding in BBR.
The open access model aims to foster competition, increase efficiency, and bring innovation to the railway sector by involving private entities in the operation, management, and development of railway infrastructures and services. NRZ management highlighted the benefits of private investment, such as modernizing infrastructure, introducing new technologies, and improving customer experience.
NRZ is currently facing challenges due to declining revenue and outdated infrastructure. While it transported 12 million tonnes of freight annually in the 1990s, it now struggles with just 2.3 million tonnes. The company’s fleet consists of 68 mainline locomotives and 73 shunt locomotives, but only 39 are operational, with the rest being well past their expected lifespan of 25 years.
To revitalize its operations, NRZ is seeking external help for locomotive refurbishments and plans to adopt a fixed-cost, supply-inclusive outsourcing model to address internal inefficiencies and high costs. Despite having workshops for maintenance and overhauls, NRZ faces cash flow limitations and lengthy procurement times for spare parts, often taking eight to 12 months.
The open access model aims to foster competition, increase efficiency, and bring innovation to the railway sector by involving private entities in the operation, management, and development of railway infrastructures and services. NRZ management highlighted the benefits of private investment, such as modernizing infrastructure, introducing new technologies, and improving customer experience.
NRZ is currently facing challenges due to declining revenue and outdated infrastructure. While it transported 12 million tonnes of freight annually in the 1990s, it now struggles with just 2.3 million tonnes. The company’s fleet consists of 68 mainline locomotives and 73 shunt locomotives, but only 39 are operational, with the rest being well past their expected lifespan of 25 years.
To revitalize its operations, NRZ is seeking external help for locomotive refurbishments and plans to adopt a fixed-cost, supply-inclusive outsourcing model to address internal inefficiencies and high costs. Despite having workshops for maintenance and overhauls, NRZ faces cash flow limitations and lengthy procurement times for spare parts, often taking eight to 12 months.
Source - The Herald
