NRZ in $80m salary arrears

Source: NRZ in $80m salary arrears – Sunday News Nov 6, 2016

Dumisani Nsingo, Senior Business Reporter
THE National Railways of Zimbabwe owes its employees about $80 million in salary arrears over a period of 12 months, officials said.

Speaking after the commissioning of 31 open-top, high-sided wagons, NRZ general manager Engineer Lewis Mukwada said the parastatal has since dollarisation of the country’s economy in 2009 been struggling to pay its workforce full salaries resulting in arrears accumulating over the years.

“We have a salary backlog of over $80 million cumulative over the years. What has been the major issue is that we were paying in an erratic manner which was not predictable and made the lives of our employees a bit difficult,” he said.

Eng Mukwada, however, said the company had been consistently paying part of its workforce’s dues since July buoyed by an increase in business.

“After the strike by workers to date we have been paying a portion of their salary consistently every month largely due to an increase in business in terms of movements of maize, chrome ore and ferrochrome as well as sugarcane and sugar,” he said.

NRZ board chairman Mr Larry David Mavima reiterated Eng Mukwada’s sentiment stating that the company had started to partly meet its workforce’s salary obligations.

“We have stabilised the company although we are still behind in terms of payment to workers but we are able to guarantee a certain percentage of salaries to our workers at a specific and given date. We have cut the months back, I think at the moment we are still around 12 months behind but what is important is not how far back we are, it’s how we are managing at the moment because that’s what is critical,” said Mr Mavima.

He said the issue of the salary backlog would be discussed after the recapitalisation of the company and improved movement of freight.

“The issue of the backlog in terms of salaries can only be addressed when we move more traffic, when we actually recapitalise, that’s when we can look back and say when we are paying back the employees that we owe money. We are not neglecting the liability that we owe to the employees. We will never do that . . . we will continue to find ways and means to accommodating and finding solutions for employees’ salaries,” said Mr Mavima.

Addressing delegates at the commissioning of the 31 wagons, Transport and Infrastructural Development Minister Dr Joram Gumbo said the latest acquisition was going to play a major role towards NRZ’s recapitalisation initiative.

The wagons were manufactured as per the specifications provided by NRZ by one of the world’s reputable railway rolling stock manufacturing company — China Railway Rolling Stock CRRC Corporation Limited at a cost of $2,9 million.

“You will be aware that the NRZ has been facing operational challenges in the past few years as its capacity has declined significantly; hence the urgent need for re-capitalisation. I am therefore pleased to be commissioning these wagons as part of initiatives to immediately boost its capacity to move more bulk cargo.

“Our position as Government is that we are open to evaluating the various proposals that we may receive for the recapitalisation of NRZ. We hope that in this way we will not miss the opportunity for the best deals that may be presented under any of the recapitalisation options. As the shareholder, and driven by national interests, my ministry has the unenviable task of balancing the role of both road and rail,” said Dr Gumbo.

He said the country risks losing both rail and road capabilities through under-utilisation of rail, as a result of the diversion of rail friendly business to road, while at the same time the road network was over-used leading to its fast deterioration, congestion and increased frequency of accidents and loss of life. NRZ needs $400 to $600 million for its short-term and $2 billion for its long term recapitalisation programme.