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Prosper Ndlovu Business Editor
THE National Railways of Zimbabwe (NRZ) could face severe financial losses in the event of disputes with creditors after it emerged that loan documents detailing borrowings of up to $40 million have gone missing.
Parliament heard that the giant parastatal failed to produce loan agreement documents for audit to the Parliamentary Portfolio Committee on Public Accounts chaired by Paurina Mpariwa.
The committee made the revelations in a report that was presented in the National Assembly on Wednesday.
MPs warned of a potential time bomb over the missing loan documents. “The committee established that, out of the company’s total borrowings of $40,164,820, loan agreements with a cumulative amount of $5,667,840 were not availed for audit,” reads part of the committee report.
Although the committee ruled out foul play in the administration of the funds, it warned that the loss of such critical documents “could result in financial loss in the event of disputes arising with creditors concerned”.
The committee did not disclose the names of concerned creditors, but said the NRZ management pointed out that the loans in question were contracted in the 1990s. “The loan documents were misplaced at a time when its (NRZ) headquarters moved to a new location,” reads the report.
“There is a need for the parent Ministry (Transport and Infrastructural Development) and NRZ to liaise with the Ministry of Finance in order to recover the missing loan agreements and also to put in place a system of tracking loan documents.”
The company’s headquarters is situated in the city centre in Bulawayo.
NRZ board chair Alvord Mabena could not comment on the matter. “I’ve been out of the railways for the past 16 years. Your first port of call could probably be the NRZ management itself,” he said.
Acting general manager Lewis Mukwada could not be reached for comment.
Management, added the report, also indicated that after the issue of the missing documents were raised, a new system providing for the safe keeping of loan documents as well as an effective tracking mechanism that allows monitoring of movement of such documents was put in place.
NRZ is battling operational constraints in the face of negative net capital and ballooning operational losses.
The audit has since shown that the parastatal is in dire straits – weighed down by poor business performance, an ageing fleet and dilapidated railway infrastructure as well as arrears running into millions of dollars to different creditors.
The bulk of the money is owed to workers in unpaid salaries and unpaid statutory obligations to entities such as NSSA, Zimra and medical aid benefits.
The committee has since recommended the crafting of a new business plan by management for funding by the government in the long term.
“Such a plan should embrace the modern technological developments, which would allow for efficient ways of doing business by NRZ,” added the report.
However, the company seems to be in a management dilemma as it has been operating without a substantive general manager since 2013 when Mike Karakadzai died in a car accident.
Early this year, the company invited applications for the top post and went on to disqualify 40 shortlisted candidates saying they had failed to meet the “standard”.
“The process of filling up senior positions such as that of the general manager should be speeded up,” the committee noted in its report.
It also called for stiffer penalties on those caught vandalising NRZ infrastructure such as electrical copper cables that forced the suspension of the Harare-Gweru electric train.
The committee recommended the adoption of innovative turnaround strategies based on information communication technology as well as partnerships with ICT operators in seeking communications solutions for train control purposes.
Transport Minister Obert Mpofu was not available for comment.
Online Reporter