1. PRACTICAL SOLUTIONS TO CHALLENGES FACED BY RAILWAYS IN THE REGION The Case of NRZ Harare, 15 October 2015 THERE IS NO BETTER WAY THAN THE RAILWAY

2. Scope of Presentation 1.NRZ’s resources and their current state 2.Efforts to Address Resource Challenges 3.Current challenges faced by Rail in the Transport Industry 4.Response to the challenges 5.Conclusion THERE IS NO BETTER WAY THAN THE RAILWAY

3. NRZ Resources Locomotives Coaches and Wagons Equipment aged.  Locos s.e.d. 1965-1993  Wagons s.e.d.1950- 1982  Coaches s.e.d. 1951-1998 Deferred maintenance Accident damaged Poor availability Poor reliability of locomotives Wagons not fit to carry exports Coaches in very poor state THERE IS NO BETTER WAY THAN THE RAILWAY

4. NRZ Resources Locomotives Coaches and Wagons THERE IS NO BETTER WAY THAN THE RAILWAY

5. NRZ Resources Infrastructure Track damage due to derailements Signalling and electrical- theft and vandalism of equipment, obsolescence THERE IS NO BETTER WAY THAN THE RAILWAY

6. Decline in Business Moved THERE IS NO BETTER WAY THAN THE RAILWAY

7. Efforts to Address Resource Challenges Locomotives and Wagons Locomotive Refurbishment: tug-of- war Wagons: Workshop overhaul and bogie lifts Finance: PPP’s and proceeds from scrap Good effort but not enough THERE IS NO BETTER WAY THAN THE RAILWAY

8. Efforts to Address Resource Challenges Infrastructure Tracks- speed restrictions reduced from 17% in 2010 to 10% of track length- PSIP funding: tug-of-war Rail- bought 12 000 tons (133km) (own resources)-  Re-railing worn out sections  Upgrade Theydon Matinhidza (53/70 km done)  Replace cracked rail on Bulawayo-Vic Falls line  90 km used THERE IS NO BETTER WAY THAN THE RAILWAY

9. Efforts to Address Resource Challenges Infrastructure Signalling and Communications  Establishment of trains to control centre voice communication networks  Vic Falls-Bulawayo: UHF/VHF  Bulawayo- Harare: Microwave radio  Dabuka- Chicualacuala: UHF/VHF THERE IS NO BETTER WAY THAN THE RAILWAY

10. Efforts to Address Resource Challenges Infrastructure Signalling and Communications  GPS on locomotives for tracking trains  Introduced Integrated Trains Control System (ITCS), now developing software for issuing movement orders to trains  Developed LAN/WAN network system-wide, and cargo tracking system  Joint development of optic fibre networks and sharing of base stations with local mobile phone companies THERE IS NO BETTER WAY THAN THE RAILWAY

11. Efforts to Address Resource Challenges THERE IS NO BETTER WAY THAN THE RAILWAY Business Moved (000 tons) Efforts assisting in recovery, but not enough to restore to full capacity More comprehensive solution required Currently in discussion with some potential financiers

12. Issues From the Market Rapid growth of road freight transport sector  Taking over of traditional bulk business  Wide range of players- broad menu of solutions  High flexibility and quick response to changes in market conditions, e.g. spot rates, response to fuel prices  Competitive rates on the basis of back-hauls  Traditional advantages: door to door, fast delivery THERE IS NO BETTER WAY THAN THE RAILWAY

13. Issues From the Market Customers demanding more……  Falling commodity prices- pressure on rates  Highly reliable service, don’t want to hold stocks  Decent delivery times, consistency  Margins growing smaller- cannot absorb losses due to thefts, accidents  Require end-to end solution, not just rates THERE IS NO BETTER WAY THAN THE RAILWAY

14. Response From the Railways- Flexibility The Beira Corridor Case Study The need for containerization  Reduced port-handling charges- straight into stacks  Maximize payload, reduce rates: two containers/ per wagon with payload of 25 tons/ container (excl. container tare weight): upgraded wagon suspension  Axle load restriction: NRZ upgraded to 18.6t/axle with speed restriction, CFM upgraded to 17t/axle. ZRL- no issue. Net result, 2 containers x 23tons net payload each. Unit train requirements  1 000 tons payload required per train. ZRL- no issue. CFM- no issue. NRZ: Harare-Mutare section, 2 GT22, not enough, 3 GT22 too much. Ran trials for GT26. THERE IS NO BETTER WAY THAN THE RAILWAY

15. Response From the Railways- Flexibility The Beira Corridor Case Study Rates, rates… and total logistics costs  Benchmark against road back-haul rates  One through rate offered to customer- railways discuss internal division of rate  Approached ports for favourable rates and terms  Identified business for return loading for sustainability Resources  Contribution of wagons from NRZ and ZRL into a pool dedicated to the business Delivery times  10 days Kitwe- Beira (6 days Beira –Lusaka achieved)  Harmonized train service THERE IS NO BETTER WAY THAN THE RAILWAY

16. Response From the Railways Chrome Ore Rates : harmonized between NRZ and CFM Wagon capacity “ …with a little help from my friends” TFR CMR Wagons THERE IS NO BETTER WAY THAN THE RAILWAY

17. CONCLUSION Solution based approach and flexibility Thank you THERE IS NO BETTER WAY THAN THE RAILWAY