via NRZ fails to account for $5,6m worth of contracts – NewsDay Zimbabwe June 12, 2015
The National Railways of Zimbabwe (NRZ) has allegedly failed to submit for auditing, $5,6 million worth of contracts signed in the 1990s, raising suspicion that the money could have been abused.
BY VENERANDA LANGA
This was revealed on Wednesday in a report by the Parliamentary Portfolio Committee on Public Accounts on the NRZ accounts for the year ended December 2011.
Chairperson of the committee Paurina Mpariwa (MDC-T) presented the report in the National Assembly which recommended the need for the Transport and Infrastructural Development Committee to liaise with the Finance ministry to recover the missing loans agreements and put in place a system of tracking important documents.
“The committee established that out of the company’s total borrowings of $40 164 820, loan agreements with a cumulative amount of $5 667 840 were not availed for audit,” read the committee report.
“This could result in financial loss in the event of disputes arising with creditors concerned. Management admitted the loan documents were misplaced at a time when its headquarters moved to a new location.”
The Public Accounts Committee report further noted that NRZ deducted NSSA and Rail Med subscriptions from employees, but never remitted them, resulting in NSSA in 2011 being owed $2 million dating back to 2009 and the debt ballooning to $4,1 million in 2014.
Rail Med was said to be owed $1,291 million, endangering retired workers and causing Rail Med to be closed at some point, which affected provision of health services to workers.
NRZ’s indebtedness at that time was said to be $53,4 million with Zimra alone owed $43 478 000 in PAYE and VAT. Other parastatals and debtors were said to be owed $6 million.
On the state of their equipment, the committee said of the 70 diesel locomotives, only 25 were operational and out of 73 shunting locomotives, 35 were still serviceable, but were 45 years old, more than the required lifespan of 25 years.
“The major challenge threatening the viability of the company was low production as a result of an ageing infrastructure which had outlived its planned lifespan of 25 years. The company needed to move five million tonnes in volumes that needed rail transportation, but tonnage had gone down to 2,6 million tonnes in 2009. In 2013 there was slight improvement of up to 3,71 million tonnes,” the committee said.
Other recommendations by the parliamentary committee included that the process of filling up the post of general manager should be speeded up.
“Government should consider stiffer penalties for those caught vandalising electrical copper cables. NRZ management should come up with a new business plan for funding by government in the long term and such a plan should embrace modern technological developments which allow for efficient ways of doing business by NRZ,” the committee said.
COMMENTS