NRZ battles financial woes

THE NATIONAL Railways of Zimbabwe is having to borrow heavily to pay Zimdollars 230 million (about R80 million) for more than 1 000 employees who were retrenched five years ago.
Interest rates are about 35%. The corporation originally assumed that it would find the money from its own cash flow, but in the last few years has become bogged down with higher costs - mostly salaries - and falling revenue. Inefficiency, competition from road transport and breakdowns of locomotives and wagons have led to a steady drop in the volume of traffic being carried.
Total monthly revenue is now R30 million while the salary bill alone is R20 million for the staff of 11 500. At one time 18 000 people were on the payroll.
The NRZ is perilously close to financial collapse, owing R20 million in unpaid tax plus millions more to its pension fund, which has been raided to keep the organisation operating, and the compulsory national pension scheme.
However some relief could come from the liquidation of the Bank of Credit and Commerce International, which was closed in 1991 after massive international fraud was discovered. NRZ money had been deposited with the bank as part of a joint fund with Zambia Railways to administer the defunct railway authority of the former Federation of Rhodesia and Nyasaland.
Revenue still comes into the fund through ownership of the Victoria Falls bridge and hotel plus farms and other hotels.
About R70 million is expected from the BCCI liquidation, although this represents a signficant loss on the original deposit, which was close to R150 million.
BY MARTIN RUSHMERE