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Zambia Railways Limited (ZRL) is scouting for US$248 million to finance its Business Strategic Plan (BSP) and address operational challenges, the company’s Board Chairperson, Emmanuel Hachipuka, announced during a media briefing in Lusaka on Wednesday.
Hachipuka stated that ZRL was currently operating at a loss due to various operational issues, with the condition of the aging railway tracks being one of the most critical concerns.
He explained that the deteriorated tracks can only support train speeds of about 15 kilometres per hour, severely hampering the company’s efficiency.
“Deferred maintenance, driven by cash flow constraints, has contributed significantly to the poor state of the railway infrastructure and rolling stock,” Hachipuka explained.
He highlighted that the locomotive situation was particularly dire, with ZRL currently relying on just one company-owned mainline locomotive and three leased ones.
Shunting operations are similarly strained, with only three locomotives in operation.
To address these challenges, ZRL’s board, management, and employees conducted a review of the company’s BSP, initially set for 2021 to 2025.
However, the plan had not achieved its intended goals, leading to a revision to align with the government’s vision outlined in the Eighth National Development Plan.
“The board saw it logical to revise the plan to facilitate alignment with the new government’s vision and respond to business dynamics,” Hachipuka said.
The proposed US$248 million recapitalisation will come from a combination of internally generated funds, loans from lenders, partnerships, grants from multilateral institutions, development agencies, concession loans, and shareholder equity.
Key components of the recapitalisation plan include Track Improvement, Rolling Stock Rehabilitation and New Equipment.
Hachipuka emphasized that the successful implementation of this recapitalisation plan wss essential to improving ZRL’s operations and restoring its financial stability.
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