Bankrupt NRZ Owes Workers $60 Million

Bankrupt state firm National Railways of Zimbabwe owes workers $60 million in unpaid salaries and needs a capital injection of half a billion dollars to become viable, a cabinet minister has revealed.
Transport and Infrastructural Development Minister Obert Mpofu said government negotiations with financial institutions to get a loan had not yielded results.
“The total arrears owing to staff of the National Railways in terms of the salaries, overtime and allowances up to the end of December 2013 stands at US$59 504 365,” Mpofu told Parliament. “Currently, the National Railways of Zimbabwe is paying out 75% of the net salary to the lowest paid and up to 50% 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.”
Mpofu said government was “very concerned” about the failure by the National Railways of Zimbabwe to meet all its obligations in respect of salaries, allowances, overtime and its other obligations to various creditors.
“The current scenario is a result of the NRZ’s failure to generate enough revenue to cover all its expenses. This is due, in turn to its poor capitalisation coupled with a bloated labour force,” he said.
Mpofu said an ‘information memorandum’ done through a consultant funded by Development Bank of South Africa in 2013 showed that NRZ needed US$450 million to rehabilitate the entire railways system and make it self-sustaining. He said the Ministry was currently negotiating with one financial institution for funding the railways recapitalisation programme and had also received two enquiries from potential investors considering investing in the railways under a so-called Rehabilitate, Operate and Transfer arrangement.
“I am confident that we will be able to sign an agreement on any of the above three options within the first half of this year,” Mpofu claimed.
He said the Ministry had initiated the process of recruiting a substantive General Manager following the death of General Manager, Air Commodore Mike Karakadzai late last year. The process was expected to be completed within the first half of the year, he said.
Mpofu confirmed that ZIMRA and NSSA had previously garnished NRZ for non-payment of taxes and levies but the railways and the two statutory bodies had since agreed on a payment plan “which is currently being adhered to, hence there are no garnishees in place at the moment”. The minister said payment of salaries in January 2014 had not been affected.
Government plans to revive the NRZ and ensure that it is able to assume its role as the primary system of transport for bulk commodities, exports and imports have largely failed over the last three decades due to corruption by officials handpicked by President Robert Mugabe to run the ailing parastatal.

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