HARARE – The National Railways of Zimbabwe (NRZ) has agreed terms with Indian engineering firm, RITES Limited to source for new locomotives, wagons and enjoy infrastructural upgrades in a US$81,2 million deal underwritten by Afreximbank.

According to a corporate filing with BSE on Friday, the company said: “RITES Limited has signed contract agreements with National Railways of Zimbabwe (NRZ) for supply of rolling stock (3000 HP Diesel Electric Locomotives and High Sided Open Wagons).

“However, the contract agreements are subject to approval of funding by the funding agency.”

The notification further discussed that, “the broad consideration and size of the order will be US$81,175,500.”

The contract was consummated during Vice President Constantine Chiwenga’s ongoing visit to India where he was quoted in the state media saying: “We discussed our railway system and there is something that will be happening to our railways because it is important that it be revamped if our economy is to grow.

“As you know, the mining industry has gone up, the agriculture industry has gone up, the manufacturing is going up and we can’t continue to use the road.”

RITES recently exported locomotives and wagons to Mozambique.

The locomotives were commissioned at an event that was also attended by President Emmerson Mnangagwa.

NRZ public relations manager Andrew Kunambura said talks about the deal started in 2022.

“The RITES of India supplied CFM of Mozambique locomotives and wagons and His Excellency, the President of Zimbabwe was invited to the commissioning ceremony.

“After the ceremony, NRZ was advised to pursue a similar deal with Rites of India which is a parastatal owned 100% by the Government of India.

“Engagements started in 2022 for procurement of 9 locomotives and 315 wagons and draft agreements were done.

“The funding model will be a loan from India Exim guaranteed by Afrexim Bank. The total amount for the transaction is US$81.2 million,” he said.

NRZ inked a Memorandum of Understanding in 2021 with the Turkish company, Yapi Merkezi for possible investment in the modernisation of its rail system to world standards.

The agreement also included Yapi Merkezi financing acquisition of new coaches and wagons but nothing has materialised yet.

In 2019, NRZ struck a deal with a Russian firm for the supply of locomotives and wagons, but it is unclear what the status of the agreement is.

A similar deal was also clinched with South Africa-based Diaspora Infrastructure Development Group, and Transnet in 2016, valued at US$420 million.

Lack of investment, particularly in freight wagons and the rail system, has affected the NRZ badly over the last two decades, reducing its cargo carrying capacity from an average 18 million tonnes per year in peak years, to just three million tonnes now.