NRZ engages four banks on loan reprieve for employees

Source: NRZ engages four banks on loan reprieve for employees – Sunday News June 5, 2016

Roberta Katunga Senior Business Reporter—
THE National Railways of Zimbabwe has engaged four banks to offer new terms to workers who are struggling to repay loans following the parastatal’s failure to pay salaries timeously. The move by NRZ is part of the company’s strategy to reach a compromise with its over 5 000 workers who downed tools in March over unpaid salaries. In an interview with Sunday Business, newly confirmed general manager Engineer Lewis Mukwada said the parastatal carried out an investigation to find out why workers were rejecting all offers to abandon the strike with most of them demanding at least six months’ salary before reporting for work; thus discovering that a number of workers had taken out loans and the salaries they were getting were going towards bank arrears.

Eng Mukwada was appointed to head one the country’s biggest parastatals last month although he has been at the helm on an acting capacity since 2013 after the death of then general manager Retired Air Commodore Mike Karakadzai in August 2013.

“In 2014, a lot of people got loans from banks. With the delays in payment of salaries by the company, the arrears accumulated. We have spoken to four major banks involved in the lending to broker an arrangement to allow staff to access the monies we are paying and reschedule repayments of the loans,” said Eng Mukwada.

Eng Mukwada said after engagements, the banks which he could not name for professional reasons, were receptive and confirmed that two of the banks have agreed to give the workers a reprieve.

He said the other two banks were still considering the request and going through due processes.

“Two of the banks have agreed to reschedule the loans on a case by case basis while the others have requested more information from the organisation,” he said.

Shedding more light on the strike that has further crippled NRZ’s operations, Eng Mukwada said by Thursday, about 318 people had voluntarily returned to work after realising the efforts by the company to reach an understanding.

He said operations had not been completely halted as there was critical cargo like maize which had to be moved, hence they had been relying on supervisory staff and re-engaged retired staff to maintain some form of service. He said they would continue to pay workers their salaries in batches.

“We have also applied to the Labour Court for an intervention as the strike is illegal and we are waiting for judgement. I believe the problems at the company are just a phase that we are going through. With the right initiatives, the company can be turned around,” Eng Mukwada said.

Meanwhile, NRZ is set to introduce an automated system for its operations as part of its efforts to reduce its workforce by about 70 percent. Eng Mukwada confirmed that the parastatal in 2014 had engaged an international consultancy firm to do a study on staff levels.

“Their findings were that with the size of infrastructure we have, the only way to reduce our numbers further was through automation which involves re-engineering processes. Most of the work that is done manually will be automated,” he said.

He said the business management system from invoicing to human resource management and procurement among other processes would be automated.

“The numbers will be determined by new processes that we would have come up with. It is important for NRZ to improve capacity utilisation and recover business volumes to earn more money on the freight business,” he said.

In the 1980s, NRZ used to employ about 18 000 workers. In the 90s the figure went down to around 12 000 and further declined in the 2000s and beyond as the company froze recruitments and others left as the company continued to struggle.

To date, NRZ employs about 5 500 workers.

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