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Accolades as NRZ makes profit after 8 yrs

20/12/2017 00:00:00
by Business reporter
 
 
RELATED STORIES

Loss making National Railways of Zimbabwe (NRZ) has recorded a profit in the second and third quarters of 2017 for the first time since 2009.

Speaking at the recent commissioning of the Nandi-Mkwasine railway line in Chiredzi, NRZ board chairperson, Larry Mavima, attributed the profit to the parastatal’s multi-faceted turnaround programme.

“Recapitalisation initiative coupled with the current cost-cutting programmes that NRZ is implementing has seen the organisation achieving an operating profit in the second and third quarters of 2017 for the first time since 2009.

Some of the major components of our turnaround strategy include reducing operating costs, cleaning up the organisation’s balance sheet as well as updating and improving the organisation’s internal systems and processes,” said Mavima.

The NRZ board chairperson paid tribute to the staff and management for reducing the company’s operational costs such as utility bills.

“Let me take this opportunity to applaud the NRZ management and staff for their sterling efforts in cost reduction through reducing utility bills such as water, telephone and electricity.

By coming up with innovative ways of achieving this such as capping the monthly telephone bills at all levels, separation of power suppliers for domestic use from commercial bulk billing and drilling of boreholes at most of our workshops amongst others,” said Mavima.

He, however, bemoaned the high employee costs. The company owes its workers $36, 1 million in salary arrears while before this year’s profit the NRZ was making monthly losses of $17 million.

“Employee costs however remain a major cost driver because of NRZ’s wide geographic dispersion systems as well as our largely manual based systems. So far, we have reduced our staff compliments from 8 313 to 4 268 and we continue to have an up –close attention on this area as we seek to make the organisation more competitive and viable,” added Mavima.

NRZ embarked on a turnaround programme about five years ago. Under the programme, the company intends to rehabilitate its tracks, signalling and communication equipment as well as the refurbishment of locomotives.

The Nandi-Mkwasine project was jointly funded by NRZ and EU and was consummated under the National Sugar Adaptation Strategy (NSAS).



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