October 17, 2019 / 7:52 AM / 2 months ago

Zimbabwe cancels deal with Transnet JV to recapitalise state rail firm

HARARE, Oct 17 (Reuters) - Zimbabwe has cancelled a deal struck with South African logistics group Transnet and its partner to recapitalise state-owned National Railways of Zimbabwe (NRZ), citing a failure to meet timelines and funding issues, a government official said.

The joint venture of Transnet and Diaspora Infrastructure Development Group (DIDG), a consortium of Zimbabwean investors living abroad, won the bid to recapitalise the financially struggling NRZ with $400 million in August 2017.

Nick Mangwana, permanent secretary in the information ministry, said the consortium had missed several timelines to provide proof of funding.

Mangwana also said differences had emerged between the consortium partners, which led to DIDG presenting a funding structure that excluded Transnet.

“(The) government indulged the consortium by working with them outside the framework agreement. Regardless, they failed to present a common position,” said Mangwana.

“The exclusion of Transnet had a legal impact on the tender which had been awarded to them as a consortium. In light of the foregoing, (the) government took a position to issue a new tender.”

DIDG chairperson Donovan Chimhanda told Reuters that the group had not been informed of the government’s decision.

Transnet was not immediately available to comment.

NRZ was one of the single largest employers in Zimbabwe, but its fortunes waned after an economic crisis between 2000-2008 that nearly halved the southern Africa country’s economy. (Reporting by MacDonald Dzirutwe; Editing by Jan Harvey)

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