By Idah Mhetu
THE cash-strapped National Railways of Zimbabwe (NRZ) is losing millions in potential revenue annually as it is leasing buildings for a song to tenants who are subletting the premises and pocketing huge profits in foreign currency.
The illegal transactions are also reported to be happening without the knowledge and authority of the newly appointed management.
An internal report compiled last month by the NRZ showed the struggling parastatal was losing up to $22 million in potential revenue from rentals as “space barons” who were leasing its buildings across the country in local currency before subletting them and charging in foreign currency.
The buildings include offices, industrial workshops, food outlets and bars.
“The NRZ has declared war on space barons leasing the parastatal’s real estate business,” Martin Dinha, the NRZ board chairperson said at a press conference in Harare Friday.
“The NRZ is losing $22 million annually to space barons who lease the organisation’s properties and premises throughout the country. NRZ recently discovered the subletting ‘rot’ of its premises by space barons at its Eastern area of operation headquarters in Harare.
“According to the internal audit report on its Real Estate branch produced on 02 July 2020, about 110 registered tenants lease the NRZ properties and the majority of them sublet the NRZ properties on inflated rates using mostly the US dollar hard currency and yet they lease the premises in RTGS dollars from the railways,” he added.
The parastatal said it recently carried out a sample survey on 10 leaseholders who paid NRZ a total of $45 576.33 per month while they pocketed $182 666.90 as profit during the same period.
“What it means is that the leaseholders earn a total of $210 876.90 per month giving them a profit of RTGS 165 300.57 after paying NRZ $45 576.33,” Dinha said.
“There is thus a high possibility that NRZ is losing $1 818 306.27 in revenue to its 110 registered leaseholders per month and annually the rail giant is being fleeced of $21 819 675.24.”
He had since instructed the new management to resolve the issue of space barons to enable NRZ to generate revenue from its properties.
Dinha urged affected tenants to approach NRZ directly and stop working with the landlord “imposters”.
“In the meantime, the NRZ invites all its leaseholders and non-leaseholders on railway properties as well as prospective tenants to approach the NRZ directly for assistance of all their issues.
“They should desist from working with landlord imposters or third parties. The NRZ board has resolved to enter into lease agreements directly with those tenants who were being illegally sublet by space barons,” he said.
However, Dinha noted some influential politicians were attempting to frustrate NRZ investigations into the illegal lease agreements and block an internal probe on suspected staff members.
“Some NRZ Real Estate staff or officials are currently under investigation on allegations of corrupt activities. The public is warned not to deal with or offer NRZ staff or law-enforcement agents bribes as the long arm of the law will catch up with them.
“NRZ will carry out this cleaning exercise without fear or favour and we note that some politicians are interfering with this exercise or seeking to intimidate us will be exposed and handed over to the law-enforcement agents.”