Decades of no profit: NRZ’s failed Landela partnership exposed

Bulawayo Bureau

THE National Railways of Zimbabwe (NRZ) has not received any financial benefits from its joint venture with Landela Safari Adventures for the management of the Landela Complex in Victoria Falls since the partnership began in 1998, the Parliamentary Public Accounts Committee has heard.

Shockingly, no board meetings have been held since the inception of the agreement more than two decades ago.

The committee, chaired by Kuwadzana East legislator, Mr Charlton Hwende, is currently touring public assets across the country.

On Saturday, the delegation, which included representatives from the Auditor General’s Office, the Ministry of Finance, Economic Development and Investment Promotion, NRZ and Landela Safari Adventures, visited several NRZ properties in Victoria Falls.

These included the Victoria Falls Station, Victoria Falls Hotel, an 8 000-square-metre plot, and the Landela Complex.

This marks Parliament’s second visit to Victoria Falls to inspect NRZ properties.

During a similar tour last year, the Parliamentary Portfolio Committee on Transport and Infrastructural Development learned that NRZ was losing out on substantial revenue, estimated to be in the tens of thousands of dollars, due to its failure to manage its extensive real estate portfolio effectively.

At the time, NRZ management acknowledged the issue and said the parastatal’s real estate department was in the process of identifying and reclaiming control of its assets to boost revenue and address its financial woes.

The Landela Complex, which comprises over 30 shops, including a bank, two restaurants, two microfinance institutions, and an airline office, has been at the centre of a protracted dispute between NRZ and Landela Safari Adventures.

NRZ is now seeking to terminate the relationship, citing loss of potential income and lack of transparency.

The partnership was established in November 1998 under a rent-based lease agreement. Landela Safari Adventures was to lease three NRZ staff houses and, at its own cost, convert them into lodges.

In return, NRZ would retain ownership of the land and take over the lodges after 25 years, without any compensation.

However, Landela instead developed a commercial complex — now known as the Landela Complex — on the site.

This deviation from the initial agreement led to a dispute and the signing of a new agreement in October 1999 under a joint venture company named Victoria Falls Trading Post.

Since then, disagreements over shareholding, financial disclosures and general management have persisted.

NRZ insists that the partnership has not yielded any returns and that delays in resolving the dispute are benefiting Landela at its expense.

Briefing the Public Accounts Committee, NRZ chief finance officer Mr Patrick Mwashita said no board meeting had been held since 1998 owing to disagreements.

“Three of the houses were constructed, but one is still outstanding. When it comes to sharing information, trading accounts and audited accounts, this has not been done,” he said.

Mr Mwashita said NRZ has not benefited financially from the agreement since its inception in 1999.

“Over the years, NRZ has been following up and we have heaps of correspondence between us and Landela to release financial statements and to hold formal board meetings. Sadly, up to now, there has not been a positive response from Landela and we are going through a legal process,” he said.

Landela Safari Adventures, represented by Mr Garikai Sithole, one of its lawyers, acknowledged the committee’s concerns and requested more time to prepare written submissions.

“The Parliamentary Public Accounts Committee had questions they wanted us to answer and we managed to answer those. They need information, which we have undertaken that by next Friday we will be availing to the best of our ability,” he said.

“From the onset, since 1998, this has always been a business relationship, and I believe the intentions of the two partners are what is supposed to carry the day.”

Mr Hwende said the purpose of the visit was to gather as much information as possible about the issue.

He urged the parties to find common ground and resolve the matter, despite the ongoing court proceedings.

“We’ve asked both NRZ and Landela to submit all necessary documentation by Friday. This will help the committee address the Auditor General’s findings effectively,” said Mr Hwende.