Duty on NRZ spares scrapped

train_partsThe Government has scrapped duty on the importation of locomotive spares in a bid to revive the cash strapped National Railways of Zimbabwe (NRZ).This comes as government recently waived import duty on air craft spares, a development which indicates that government may be moving to resuscitate moribund parastatals, including national airline Air Zimbabwe.

NRZ is currently saddled by a $176 million debt.The troubled parastatal has asked government to develop strategies to deal with the debt.A Government Gazette published on Friday stated that Finance minister Patrick Chinamasa has in terms of Section 235 of the Customs and Excise Act rescinded duty on engine spares and components for NRZ.

“Subject to this section and to such conditions as the (Zimbabwe Revenue Authority) Commissioner General may fix, a rebate of duty (with effect from 1st January 2017 to 31 December 2017), be granted on engine spares, equipment and components for the NRZ,” reads the gazette. It further lists numerous engine spare tariff headings which have been approved by Chinamasa to benefit from the rebate. The ailing rail transporter desperately needs $400 million to turn around its waning fortunes and get back on track.

Giving oral evidence before a parliamentary portfolio committee on transport in February this year, NRZ board chairperson Larry Mavhima said the situation was so dire that they were now relying on letters to communicate with train operators, risking derailment and collisions. Mavhima bemoaned that the State owned company had not had any meaningful capital injection in the past 25 years, resulting in poor service delivery and failure to compete effectively. NRZ currently owes its workers $99 million.

The parastatal’s fleet of 166 locomotives is down to 60, with the fleet aged between 33 and 50 years against a 25year lifespan. Out of a fleet of 283 passenger coaches for different classes, only 106 are in use but in very bad state.

Mavhima said the possibility of derailments had become higher due to the recent heavy rains which washed away track ballast — crushed stone which form the track bed upon which railroad is mounted, and the train operator has to negotiate the line at a very slow speed.

Learn more about other duty Free products get the Zimborderguide 

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