Govt insists NRZ still a going concern, says in talks with investors

Govt insists NRZ still a going concern, says in talks with investors

HARARE, June 8 (The Source) – The government on Wednesday insisted that loss-making and debt ridden, National Railways of Zimbabwe (NRZ) remains a going concern even as its future remains uncertain.

NRZ, the country’s sole railway services provider, has failed to run profitably for years due to undercapitalisation and ageing rolling stock. It is saddled with a $144 million debt while its 5,700 workers have been on strike since March after going 15 months without pay. The workers are owed $87 million.

While government availed $3 million last month to appease the workers to end the job action, the employees have remained adamant they will not return until the wage arrears are cleared.

Threats to fire them have so far not yielded to get them back to work.

Deputy Minister of Transport and Infrastructural Development, Mike Madanha, told Parliament on Wednesday government, as the shareholder, was in talks with potential investors to recapitalise the business, believed to be operating at 30 percent of capacity.

“Operating without profit doesn’t mean that you are no longer a going concern. NRZ is a going concern unless if someone has information to the contrary,” Madanha told legislators when quizzed about the railways service provider’s going concern status.

“As far as we are concerned, we are doing business, we are revamping NRZ and we have quite a number of investors willing to invest in NRZ so the business of NRZ is going to continue.”

He said talks were on-going with Treasury, which is also cash stressed and still battling to pay last year’s bonuses for civil servants, to shell out the NRZ outstanding salaries.

Madanha said some workers had since returned to work following appeals by government and management.

“We are going to continue encouraging workers to come back to work,” he said.

Late last month, transport minister Joram Gumbo said the parastatal was overstaffed given current constraints and operational levels and would have to shed 70 percent of its workforce.

A possible $650 million loan sought by the parastatal from the Development Bank of Southern Africa announced last year has so far failed to materialise.