NRZ needs US$2bn to recapitalise

critical areas.
Mr Masikati said NRZ was in financial distress, adding that it was weighed down by five months’ salary arrears, after staggering wages. So massive are its total recapitalisation needs that it equates to 18 percent of the national requirements for rehabilitation of all infrastructure.
“We are rehabilitating critical areas where trains have to reduce speed when passing particular points. It is the equivalent of filling up potholes. We require US$400 million to rehabilitate the network,” he said.
The parastatal has since engaged China North Railway for the manufacture of 14 wagons at a cost of US$29 million. But the deal is now on ice because NRZ has not yet secured the Government guarantees it needs to finalise the deal. This is despite the fact that the parastatal has already made a 10 percent down-payment amounting to US$2,9 million.
Mr Masikati said while the operator’s infrastructure was not in the best state, the company had the capacity to move cargo. It is understood that NRZ has recommended to Government to separate operations of NRZ into one that would be responsible for operations and the other for infrastructure. Efforts to get an update on the proposals from the Ministry of Transport and Infrastructure Development were unsuccessful.
Early this year, NRZ had about 168 locomotives with only 71 in a serviceable state while the remainder had become redundant due to obsolete equipment, among other factors.
Out of 8 682 wagons, only 3 427 were said to be operational. While 60 percent of the network was designed for automatic Centralised Train Control, it is no longer functional due to vandalism and ageing equipment.
NRZ moved 12 million tonnes of cargo in 1992 and 19 million tonnes in 1997, before experiencing a sharp decline to 2,6 million tonnes in 2009 and a further plunge to 1,7 million tonnes last year.
The decline resulted in retrenchments and redundancies from 18 000 employees in 1980, to just above 12 000 in 1992 and eventually dropping to the current 7 000.
Despite the massive decline in the staff complement, economic conditions have constrained its capacity to pay workers.
“We are in arrears for five months due to the macroeconomic environment. Business is not available because industry is not performing. Our business evolves around moving what is availed to us by industry” he said.
To prevent the financial distress from worsening, the NRZ is not replacing workers who die, retire or resign.
Its workforce has declined from 9 000 when the economy dollarised in 2009 to the current headcount of just over 7 000.