Zimpapers Logo

NRZ building

Oliver Kazunga, Senior Business Reporter
A FORENSIC audit will soon be carried out at the National Railways of Zimbabwe (NRZ) to examine what has been happening at the parastatal in the past five years, an official said yesterday.

NRZ board chairman Larry Mavima told Business Chronicle that the government has authorised the forensic audit that would look into procurement issues, real estate and property as well as human resources and staffing portfolios.

“As chairman, I’m instituting a forensic audit for NRZ in three different areas, which are the procurement system, real estate and property and the human resources and staffing portfolios,” he said.

“We want to determine what has been happening at NRZ for five years going back.”

Mavima said the forensic audit would be done by independent auditors.

“The forensic audit has been authorised by the Ministry of Transport and Infrastructural Development. It (audit) seeks to determine if there are any leakages in the NRZ procurement system, how revenue is being collected from NRZ estates and properties as well as determining the railways’ human resources and staffing looking at whether there are any ghost workers or for instance is NRZ overstaffed ?” he said.

According to the 2014 Auditor General’s report for NRZ accounts, the freight unit was generating annual revenue of $91,2 million, but incurring costs of $103 million.

The passenger unit had annual revenues of $3,2 million, with costs over three times more at $10,9 million.

The upcoming forensic audit will be implemented as part of efforts to facilitate the parastatal’s turnaround strategy, which Mavima, who was appointed this year, has adopted.

Part of the turnaround strategy also relates to rightsizing in terms of employees in relation to business available. At its peak, the NRZ could move between 100,000 tonnes and 150,000 tonnes of freight per week but presently, it is moving below the above figures.

Asked about the plan of action to be taken after the audit, Mavima said:

“We’ll be guided by the recommendations of the audit report and where there are anomalies those involved will have to face the music, so there’ll be no sacred cows”.

It is believed that the NRZ forensic audit, if carried out, will give impetus to the parastatal’s recapitalisation initiative. The ailing parastatal, which has a legacy debt of about $144 million, requires about $1,9 billion in the long-term to be fully revitalised and transformed.

Options available for NRZ recapitalisation include Public Private Partnership, joint venture and a loan or a combination of the above strategies.

At present, the NRZ is in discussions with the Development Bank of Southern Africa for a $650 million package to rehabilitate its ageing infrastructure and equipment that has surpassed the designed lifespan.