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Oliver Kazunga
Bulawayo Bureau
THE National Railways of Zimbabwe (NRZ) is allegedly breaching good corporate governance practice as some of its management chair or sit in various boards of the parastatal’s extended administrations but “fail” to execute their managerial mandate.
The Government is the major shareholder in the ailing railways operator whose under performance has been attributed to maladministration, impropriety and the adverse economic climate facing Zimbabwe.
NRZ’s extended administrations are Road Motor Services (RMS), Beitbridge Bulawayo Railway (BBR) in which NRZ owns 15 percent interest, RailMed, Emerged Railway Properties (ERP) and the NRZ Pension Fund.
Despite the prevailing macro-economic outlook, Transport and Infrastructural Development Minister Joe Biggie Matiza has directed NRZ board, which is chaired by Advocate Martin Dinha who was appointed last year, to expedite the restructuring of the parastatal and the exercise is expected to be complete by October.
According to internal sources privy to the matter, due to corporate governance gap at NRZ, the shareholder expects the appointment of independent members within the NRZ extended administrations in order to avert conflict of interest.
“You find that RMS needs an independent board chair who is given a task to make RMS do proper governance for the organisation to rise.
“But then if you are having an NRZ manager who is even failing in his own mandate at NRZ, how do you expect that manager to make RMS rise?
“At one time around 2010, there were 100 trucks but now there are below 10 trucks,” said the source.
The source said after a five-year tenure, the said managers were taking turns to assume different roles in the parastatal’s extended administrations despite failing to deliver on their mandate at NRZ.
At present, the source said there are four members from NRZ management who sit on the RailMed board, but the administration is swimming in murky waters.
“At RailMed, we understand that between 2013 and 2014, there has been a team of independent pharmacists based outside the country who had expressed interest to take over management of RailMed and make sure that it rises because it has good facilities, but these guys (managers) refused.”
The source said RailMed was in shambles despite more than 4 600 NRZ workers having monthly medical aid deductions.
“If you go there (RailMed pharmacies), there is nothing in terms of medicine, yet we are having four managers from NRZ sitting in the RailMed board, what are they doing?”
On the parastatal’s pension fund, which is chaired by NRZ projects manager Mr Stanley Shava, the source said there were three other managers from NRZ in the pension fund.
“What these managers want at the pension fund is travelling to the United Kingdom where at times they go there for two weeks to attend meetings and tour NRZ properties.”
The source alleged that some of the NRZ Pension Fund’s assets were being administered by Lenster Investments Limited from which the Zimbabwe Amalgamated Railway Workers Union president Mr Kamurai Moyo and Engineer Mukwada were directors, leaving the pension’s assets subject to abuse.
The source said because Mr Moyo is a trustee in the NRZ Pension Fund and also being a workers’ representative, pensioners expect their issues to be represented by the unions.
“But how then do you make the pension fund avert problems facing the pensioners, when a company in which you are a director is receiving money from the pension fund?”
Last year, NRZ held its stakeholder meeting in Matopo where the railway parastatal was expected to come up with a strategic plan in line with the thrust and objectives of Government.
The stakeholder meeting was organised by NRZ director for corporate services Mr Misheck Matanhire who is also the chairman for ERP.
“He (Mr Matanhire) is the one who organised the stakeholder meeting held in Matopo last year to say we need to come up with a strategic plan that was expected to move with the thrust of the Government.
“Instead of inviting a strategist, a motivational speaker (name supplied) was invited on the pretext that he is a strategist to guide us on how to do the strategic plans, and he produced an 80-page document that has nothing to do with our strategy.
“But the thing is the general manager (Eng Mukwada) accepted that,” said the source.
Other NRZ managers in the ERP board include Engineer Philip Chifamba who was leading the parastatal’s recapitalisation project and NRZ acting finance director Mr Mthandazo Mlotshwa.
“Most of their meetings are held in Victoria Falls, and Livingstone on the Zambian side. For ERP, because the Zambians are there, obviously accountability and responsibility aspects are catered for,” said the source.
ERP owns the Pan-African Minerals Development Corporation, a joint venture project between Zimbabwe, Zambia and South Africa and the firm has vast deposits of gold and diamond largely in South Africa.
“But the issue is that these guys (NRZ managers) are going into those boards and yet they are failing to make things happen at NRZ.
“Why are they taking those board seats when they are failing to deliver at NRZ?”
Few years before the turn of the millennium, BBR was mandated by Government to build a railway line from Beitbridge to Bulawayo under a built-operate-and- transfer (BOT) arrangement.
“Unfortunately, the BOT period has been consistently extended and general managers of NRZ in all their terms have basically been chairing the BBR boards.
“At one point there was a question in Parliament as to why a general manager of NRZ is the chair of BBR when these two entities are sort of competitors and he (Eng Mukwada) says ‘we want to protect our 15 percent stake’.
“The argument by the Parliamentarians was that there is a conflict of interest and in terms of corporate governance, you are not supposed to be there. Why can’t someone at lower level from NRZ go there.”
According to the source, BBR was making NRZ the chair because the former uses most of the parastatal’s facilities.
“The issue is not about chairing but it is about the conflict of interest.
“In other words they are aiding BBR for the purposes of making BBR very lucrative so that they (general managers) also get the monies.”
Contacted for comment, Eng Mukwada said:
“We have associated companies and subsidiaries and we have to be represented in those companies. Like RailMed for example, the RailMed constitution says its board must be drawn from employee and management representatives, so we then second managers to that board.”
In a separate interview, Adv Dinha said as directed by Minister Matiza they would look at restructuring NRZ within the stipulated time frame.
“We are going to look into this concern and interrogate whether or not NRZ management should sit and represent NRZ on these boards.
“Matters of conflict of interest and effective representation arise from such representations,” he said.
Minister Matiza has directed NRZ board to restructure management and bring in “fresh blood” as part of the parastatal’s broader strategy to turnaround the ailing railway operator.
He said they would interrogate board representations by NRZ management to ensure the managers are not distracted from their day-to- day management duties.
Online Reporter