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Comatose NRZ needs $10 billion
07/07/2014 00:00:00
by Business Reporter
 
 
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COMATOSE national rail carrier, the National Railways of Zimbabwe (NRZ) requires a whopping $10 billion to recapitalise in line with global trends, Parliament heard Monday.

Some $144 million of the cash – if ever found – would go towards settling obligations to service providers and workers who have gone for almost a year without pay.

NRZ acting general manager, Lewis Mukwada, told the parliamentary portfolio committee on transport that dilapidated infrastructure, undercapitalisation and competition from road transport had led to the transport operator’s demise.

Most of the infrastructure that NRZ owns is at least 50 years old.

“The $10 billion is what we need all in all but in the short term we could do with about $400 million for about three years to start normal operations,” said Mukwada.

“Almost all locomotives have gone beyond their nominal design life with the newest being 21 years-old and the oldest at 40. They were all purchased in the 1960s except for one that we acquired in 1992."

He added that the NRZ is operating at a staggering loss of $4 million on a monthly basis, translating to some $32 million a year with a wage-bill that is taking away no less than 69% of total revenue.

According to Mukwanda, NRZ owes its 6,000 workers some $36 million in salary arrears.

He added that the rail carrier has also been failing to honour statutory obligations to the National Social Security Authority (NSSA), Zimdef, tax collector the Zimbabwe Revenue Authority (Zimra) and medical aid societies.

“However, parastatals like GMB owe us $10 million, Zisco $7.7 million and the Zimbabwe Power Company, our major customer owes us $2.8 million.

“We owe Zimra $35 million in Value Added Tax and Pay as You Earn. We now hope the new board will facilitate an inter-parastatal debt relief programme to recover what we are owed,” said Mukwanda.

He also painted a sorry state of the national rail system warning that it has turned into a potential death trap.

Rail tracks “are now characterised by speed limits to curb accidents as the concrete sleepers are damaged” while the Gweru-Harare electric line which supplied power to electric locomotives had ceased to be operational since 2006.



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