Gabriel Masvora, Business Editor
IN a major development, the country’s biggest rail operator, the National Railways of Zimbabwe (NRZ) has paid more than $326 million to its workers to clear salary arrears that had accrued from 2012.
The parastatal has over the years been struggling to clear its debt in salary arrears resulting in numerous clashes between management and the workers. In a statement on Friday, NRZ acting public relations manager Mr Martin Banda said the company has managed to liquidate all outstanding salaries owed to employees in the last nine years.
“The National Railways of Zimbabwe has cleared the legacy salary arrears from 2012. The arrears were accrued due to the financial challenges that were bedevilling the bulk goods carrier. The organisation started paying 100 percent of net salaries from 1 July 2019 and ring-fenced all salary arrears that had accumulated up to 30 June 2019,” he said.
Mr Banda said while the law stated that debts accrued from 2019 are to be settled at the rate of US$ to Z$1, the company resolved to factor in an ex-gratia principle to the principal amount owed taking into account the erosion of the value of salaries owed due to inflation.
“This resulted in NRZ paying a total of $326 million in settlement of salary arrears. The NRZ expresses its gratitude to workers for the patience they demonstrated while the company pursued efforts to pay off the arrears.”
Over the past few months, the company has been initiating a number of programmes meant to boost business at the same time streamlining its workforce in line with demand for its services.
In March the company launched a Strategic Plan where it announced that it needed 40 locomotives, 300 wagons and 300 coaches to fully come back on track. One locomotive is estimated to cost around US$3 million, while 40 of them will cost around US$120 million.
In June, Mozambique Ports and Railway Company (CFM) also announced that it was committing investment of US$260 million to assist the NRZ with four locomotives and 150 wagons. As part of a US$200 million investment the Mozambican company announced that it had already started to replace tracks on the railway line connecting the port city of Beira to Machipanda, on the border with landlocked Zimbabwe.
The additional US$60 million was to be used for equipment needed for the locomotives and wagons. The need to focus on links to Mozambique were motivated by the need to access ports to reach out to markets for imports and exports. NRZ has also been streamlining its workforce and last month, the company announced that it terminated contracts for 300 short term contract workers in June and July.
Acting general manager Mrs Respina Ziyanduko said all expiring contracts were not being renewed. She also announced that in order to give effect to the implementation of the restructuring exercise, effective August 2021, all employees who were in sub-grades A1 to A3 and acting in higher grades were to revert to their substantive grades.
She also announced that incumbents in substantive positions deemed redundant were to be redeployed and where necessary retrained or reskilled for that purpose.
“As you may have realised, the new organisation structure has inevitably resulted in some positions and departments being rendered redundant while a few new positions have emerged,” she said.
The company is also abolishing a number a number of posts.
“This exercise follows an instruction from the shareholder to streamline the operations of the national bulk carrier in line with the current business and revenue being generated by the company.
“However, the NRZ Board and management have made it clear that no permanent employee will be retrenched as a result of these changes. Excess staff will be redeployed to areas of need and a robust retraining programme will be implemented to enable the permanent employees to fit into the new structure,” the company announced.