NRZ in negotiations for funding

Business Reporter
THE National Railways of Zimbabwe is negotiating with a financial institution for the funding of a railway rehabilitation programme, Minister of Transport Obert Mpofu said.In addition, the NRZ may complete negotiations for a Rehabilitate Operate and Transfer arrangement with potential investors.
Minister Mpofu was responding to questions in Parliament by Bulawayo South Member of Parliament Eddie Cross.

“My Ministry is currently negotiating with one financial institution for funding of the railways recapitalisation programme.
“Further, my ministry has also received two enquiries from potential investors who are considering investing in the railways under the Rehabilitate Operate and Transfer arrangement,” said the Minister.

“I am confident that we will be able to sign an agreement on any of the above three options within the first half of the year.”
According to an information Memorandum done through a consultant funded by the Development Bank of South Africa last year, NRZ requires some US$450 million to rehabilitate the entire railways system and make it self-sustaining.

Meanwhile, Minister Mpofu also revealed that the total arrears owing to staff of the NRZ in terms of the salaries, overtime and allowances up to the end of December 2013 stands at US$59,5 million.

“Currently, the National Railways of Zimbabwe is paying out 75 percent of the net salary to the lowest paid and up to 50 percent of the net salary to the highest paid employees.

“This arrangement has ensured that NRZ staff are guaranteed to receive a predictable amount of income at the end of each month. Obviously, the Ministry would want to see normalcy return to the salary situation at NRZ,” he said.

He explained that this current scenario was a result of the NRZ ‘s failure to generate enough revenue to cover all its expenses “due in turn to its poor capitalisation coupled with a blotted labour force.”

In a reflection of its dysfunctional financial capacities, the NRZ’s revenue in the eight months to August 2013 dropped by 11 percent to US$54,74 million from US$61,96 million in the comparable period the prior year as the state-owned institution continued to lose business due to poor and unserviced infrastructure.