The National Railways of Zimbabwe (NRZ) turnaround strategy being implemented by the new
management is bearing fruits as evidenced by debt clearance of amounts running into billions of US dollars owed to its pension fund and other statutory bodies which had accrued over many years, an official of the parastatal said on Friday.
NRZ’s debt to its pension fund was the largest than any other company, according to a list released last year by the Insurance and Pension Commission (IPEC).
A combination of vandalised infrastructure, legacy debts and underfunding have crippled the NRZ`s operations in recent years, resulting in business resorting to expensive road freight services.
NRZ public affairs and stakeholder relations manager, Andrew Kunambura, said the company had paid off all outstanding arrears due to the NRZ Contributory Pension Fund.
“Since the appointment of Respina Zinyanduko as General Manager last year, there has been a deliberate policy to clear legacy debts which had affected the company’s attempts to lure investors,” he said.
“At the time of her appointment, NRZ owed money to employees through salary arrears as well as statutory bodies including the Zimbabwe Revenue Authority which was owed Pay As You Earn and Value Added Tax; the Zimbabwe Manpower Development Fund which was owed for the Training Development Levy and the National Social Security Authority for the social security pension. The general manager encouraged her team to work hard to ensure that all these debts were cleared to make the NRZ balance
sheet attractive to potential investors,” he added.
Kunambura said monies owed to NRZ employees and the statutory bodies were cleared some time ago, and payments were now up to date.
He said the payment of NRZ Contributory Pension Fund debt marked a major milestone in efforts to clear legacy debts.
“We are witnessing yet another key achievement in our debt clearance plan. NRZ is no longer owing the NRZ Pension fund. The outstanding debt was accruing punitive interest and management took a bold decision to clear the debt for the benefit of both serving and former employees. All these debts were cleared using internally generated funds,” said Kunambura.
He said efforts were also being made to reduce foreign legacy debts.
Mozambican railway operator, CFM, was owed US$6 million but the amount now stands at US$3.2 million while locomotive spares supplier Hethimix has also been paid part of the money owed to it, he said.
Kunambura said on the operational side, NRZ was committing a certain percentage of its monthly cash flow towards procurement of spares and rehabilitation of infrastructure while waiting for its several
recapitalisation initiatives to bear fruit. Zinyanduko said she was excited that they had cleared the long
outstanding NRZ Pension Fund debt which was hurting the organisation for so many years.
She said the debt was accruing punitive interest and was becoming unbearable for the organisation.
“I would like to further appreciate the NRZ staff for their dedication to duty. These men and women are always working extra hard to enable us to meet the stretch targets we would have set for ourselves.
“All these debts were settled using internally generated funds. We could not have made it if it were not for these hard-working employees,”Zinyanduko.
Meanwhile, NRZ was working to increase its freight capacity back to volumes of 18 million tonnes a year achieved in the 1990s. – New Ziana