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Nduduzo Tshuma Senior Political Reporter
THE National Railways of Zimbabwe (NRZ) is geared for a major turnaround with the government concluding negotiations with a South African financial institution for a $460 million loan to recapitalise the parastatal, a Cabinet Minister has said. Transport and Infrastructural Development Minister Dr Obert Mpofu told parliamentarians during Wednesday’s question and answer session that government was confident the deal would go through to bring the ailing firm to its feet.

He was responding to a question from MDC-T Bulawayo Central legislator Dorcas Sibanda who had asked what policy intervention the government was putting in place to revamp NRZ.

Dr Mpofu said NRZ was facing operational and viability challenges resulting in the organisation failing to fulfil its pivotal national mandate of providing bulk transport and facilitating economic growth.

“The parastatal is currently operating at less than 55 percent capacity, hence is facing serious cash flow challenges. It is against this background that the government is currently engaged in negotiations with a South Africa based financial institution for a $460 million loan facility, which is required for NRZ recapitalisation,” said Dr Mpofu.

He said the government was targeting to complete the negotiations in this quarter and was confident that the required funding would be secured.

In Bulawayo, the permanent secretary in Dr Mpofu’s ministry, Munesu Munodawafa told a workshop at Mine Entra that the NRZ had secured a $460 million loan from the Development Bank of Southern Africa to rehabilitate its infrastructure.

“If we sign the deal next Wednesday, we expect work to start in two-and-a-half months,” he was quoted saying.

NRZ is struggling with a $144 million debt. It recorded a $17 million deficit in the first five months of 2014, after generating $44 million and spending $61 million. The NRZ needs money to renew its aged lines and fleet which has wagons as old as 40 years.

The parastatal ferried about 3,6 million tonnes of goods last year, against a target of 6 million tonnes.  This is a far cry from the business it recorded in 1998, when the NRZ moved 18 million tonnes of freight.

MDC-T Mpopoma legislator Bekithemba Nyathi asked Dr Mpofu what measures his ministry had put to ensure that NRZ workers were paid their full salaries.

The youthful legislator said NRZ workers were paid less than half of their salaries and the company had accumulated salary arrears over a long period of time.

“The ministry is concerned with the salary situation at the National Railways of Zimbabwe, where workers are not getting their full salaries,” said Dr Mpofu in response.

“We are playing a facilitatory role in negotiating for a loan to recapitalise the parastatal. This should be used to rehabilitate the infrastructure as well as the rolling stock, which will in turn improve the efficiency of NRZ on the transportation of both passengers and cargo.”

He added: “We do hope the backlog in salaries will then be cleared in one to two years’ time after this recapitalisation.”

The minister said negotiations between the management and labour have been going on in trying to create a common ground and understanding of the current prevailing economic environment the country is facing which is impacting negatively on the revenue base of the company.

He, however, said the salary situation at NRZ had slightly improved, with the lowest paid workers getting 70 percent and 50 percent for the highest paid.

Dr Mpofu said his ministry was constantly monitoring the situation at NRZ by giving advice on how the company can balance its salary-revenue ratio.

Newly appointed NRZ board chairman Engineer Alvord Mabena recently told the media that the institution needed $1,9 billion for complete revitalisation and $460 million in the short term to restore equipment and infrastructure to acceptable levels.

NRZ director of finance, Retired Brigadier Levy Mayihlome this month told a Parliamentary Portfolio Committee on Transport and Infrastructural Development that recovery of inter-parastatal debt of over $15 million from the Grain Marketing Board (GMB), New Zim-Steel, formerly Zisco-Steel and the Zimbabwe Power Company (ZPC), would ensure a sound footing for the NRZ to conduct day to day operations.

NRZ has a total staff complement of 8,043 composed of 140 managers and the remainder are non-managers.

During a tour of the parastatal in Bulawayo in October last year Dr Mpofu said at its peak, NRZ employed about 23,000 people.

The minister announced he had blocked the NRZ from retrenching more workers saying government was engaging a number of investors to help revive the company and promised to turn around the firm within 12 months.