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NRZ’s sorry state revealed

The National Railways of Zimbabwe (NRZ) spent $74,67 million out of the $91, 2 million revenue it raised in 2014 paying its 6 570 workers, it has emerged.

BY TATIRA ZWINOIRA

According to the NRZ latest annual report for 2014, administration costs consumed 33% of each dollar that was spent.

Administration costs are defined as expenses associated with the management and direction of a programme, policy or business activity.

The administration costs typically include executive compensation, office costs and other expenses not directly associated with the execution of the activity.

As a result, NRZ has been failing to turn a profit and was in perpetual loss-making position.

The report released last week showed that the total staff costs were a significant bill to operating revenue of $91,23 million for 2014 which coupled with $13,85 million in other income, brought its total income to just over $105 million.

NRZ’s total expenditure stood at a cumulative $149,19 million by the end of 2014.

The company has since retrenched close to 2 349 staffers, a majority of whom through the landmark Supreme Court ruling of July 17 last year, which gave employers the right to fire workers by simply giving them three months’ notice.

Currently, the remaining 4 221 staffers are on a nationwide strike demanding their outstanding salaries for the past 15 months.

“We are told that the government is taking most of the money through Zimra because as we speak, they are up to date with pay as you earn [income tax]. The company paid for March 2016 when we have not been paid for January 2015,” a representative of the workers told The Standard.

“The government is the shareholder and it is prioritising income tax rather than our welfare.

“We are ready to close shop and go home. We are fed up. there is no way we can continue like this.”

Differences in the staff cost and the total income earned from 2014 have shown that the troubled parastatal can no longer operate from these levels.

The Parliamentary Portfolio Committee on Transport, chaired by Dexter Nduna last week said recapitalisation of NRZ would require $653 million, mainly for infrastructure and new equipment.

Surprisingly, in the 2014 annual report, infrastructure maintenance costs took nearly half the administration costs with 16%, freight operations (70%), passenger operations (3%), and finance charges (5%).

According to the report, NRZ had a loss of $31,6 million for 2014.

NRZ initiated a number of cost-cutting measures which included reducing passenger operations and reducing staffers.

However, consumption of administrative costs of NRZ as shown in the annual report revealed that the major cost was management remuneration as retrenchment did not touch managers.

Another worker representative agreed that the issue of salaries was mainly on the management side, who are estimated to be nearly 200.

“Our general manager and all those in middle management are getting allowances running into thousands of dollars every month. I am surprised because we are working the trains everyday and as we speak three ships are at Beira, someone is not saying the truth,” they said.

“We are 4 221 demanding salary arrears of a cumulative three and half years and six months transport allowance.

“There is also some money that has been converted to leave days which they [NRZ] are calling a liability.”

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