The National Railways’ of Zimbabwe has been operating without a finance director and internal auditor, while its wagons and other infrastructure are not insured.
On the streets of Harare, locals say they’re worried about a decision to make Zimbabwe’s interim currency its sole legal tender.
The National Railways of Zimbabwe, a target investment of SA’s state rail and freight entity Transnet, has been described as a doubtful going concern by Zimbabwe’s Auditor General.
The freight and passenger carrier’s current liabilities stood at US$286.4m (about R4bn), as at the end of December 2018, compared to US$256.5m (about R3.6bn) reported a year earlier. The NRZ also incurred a loss of US$43.7m (about R616m) during the period under review. According to the auditor general, this indicates the existence of a material uncertainty that may cast “significant doubt” over the railways’ ability to continue as a going concern.
Further heightening the financial risks of the company, the auditor general said that not having insurance cover for locomotives, wagons, railway line and other immovable properties poses the risk that the NRZ may be unable to replace stolen or destroyed assets.
According to responses from NRZ’s management recorded in the audit report, a tender was awarded to an insurance company to cover wagons, coaches and passengers, among other things. “The organisation has adopted a phased approach to insurance, based on the available resources,” management said.
Chiri also noted that without a permanent finance director and chief internal auditor, key decision making at the company may be “compromised” as decisions made by those in acting capacities “may be limited to short term” period, the report read.
NRZ’s management has said recruitment and promotions for key posts at the parastatal “were frozen” as a result of cost containment measures.