Minister of Industry and Commerce Mike Bimha revealed that 60% of NRZ’s cash inflow was generated from the now defunct steel company.
“60% of the NRZ’s cash flow of NRZ had to do with movement of goods to and from ZISCO. These goods are no longer moving so revenue has dwindled,” said Bimha during a business briefing on Zim Asset organised by the Zimbabwe Confederation of Industries.
NRZ needs at least $2 billion to recapitalise and modernise its operations. This will only be possible if government can revive strategic companies such as ZISCO, which supported several downstream industries, said Bimha.
Speaking at the same platform, CZI panellist and Allied Timbers chief executive officer Joseph Kanyekanye proposed the privatisation of subsidiaries of state-owned entities.
“Various parastatals are not operating viably. We have over 100 parastatals. If we are to include their subsidiaries they are 74 on paper. Government should rope in private players to take over these entities in order to resuscitate them,” said Kanyekanye.
The beleaguered national rail operator has been struggling to pay its workforce, which has dropped from 23,000 to a mere 6,000 due to viability challenges.
This has been exacerbated by the fact that NRZ’s tonnage continued its downward trend with the first three weeks of 2014 recording figures below 50,000 tons each. This is in striking contrast to the 18 million tons of good transported at its peak in 1998.
The figure fell drastically during the economic meltdown and stood at a mere 3,7 million tons in 2010, after the introduction of the multi-currency system.
In 1999 NRZ used to run 126 engines but the number of its locomotives plummeted to 112 in 2000, 99 in 2001, 83 in 2002 and 60 in 2003. In 2011, the government allocated $7,4 million towards the rehabilitation of the railway infrastructure among other things but the vote was inadequate considering the years of underinvestment suffered by the parastatal.
Minister of Transport Obert Mpofu said government was working on measures to recapitalise the beleaguered railway operator. “NRZ has not been capitalised and while efforts are being made to rehabilitate and capitalise the institution this cannot be done in a short time,” he said.Post published in: Business