SENATOR TIMVEOS: Thank you Mr. President for giving me this opportunity to debate this motion. I want to thank Senator B. Sibanda for moving this motion and the seconder Senator Makore. I stand with a heavy heart Mr. President on the shocking state of the National Railways of Zimbabwe. Let me start by saying, as a land locked country, we really need efficient and reliable railway transportation. This is not only for this country; it caters for the whole region. It also helps our neighbouring countries including South Africa, Botswana, Zambia, Malawi and Mozambique. These countries depend on this rail service. From the 1960s, Mr. President until now, we used to do good business and earn very good money for the Treasury of the nation by providing rail transit services to our neighbours.
Mr. President, I would like to refer to the recent report of the Parliamentary Public Accounts Committee which was tabled in the National Assembly on the 10th June, 2015. This report makes some very sad reading. According to the report, the NRZ is in a state of chaos because of poor business performance, aging fleet and dilapidated infrastructure. The company is not paying tax, workers and its creditors. Its debts have reached alarming levels. Mr. President, NRZ employs 6 500 workers and these workers are suffering. Information provided by management shows that the company owes its workers US$55 million in salary arrears when Parliament conducted its investigation in August 2014. Some sort of arrangement had been made where the lower grades got 75% and the managers got at least 50% of their salaries. You cannot run an oraganisation like that Mr. President. The workers need motivation, they need to get all their salaries so that they can work to make sure that the NRZ is operating in a good way. Experts say they can no longer retrench staff. To begin with, NRZ used to have over 30 000 workers but now you can see the big difference of 6 500 only that are left. They can no longer retrench because they actually have to maintain the workers who know their job.
It is also of grave concern Mr. President, that while NRZ was deducting NSSA and Railmed contributions on workers pay slips, no remittances were made to NSSA or Railmed. When the Comptroller and Auditor General conducted the 2011 audit, NRZ owed NSSA about US$2 m dating back to 2009. Mr. President, you can see that surely NRZ is in a lot of problems. The debt had gone up to $4.1 million in August 2014. Railmed was owed over $1.3 m. There is a danger that workers will not be able to get their pensions in full when they retire.
Because of the failure of Railmed, workers have no access to health services at all. So, definitely this should concern all of us who are in this Senate –[HON. SENATORS: Hear, hear.]- because we are here to represent these workers.
Mr. President, considering the importance of NRZ to this country and this economy, this is a very bad situation. The railways used to be our cheapest and reliable means of transport and it was used for bulk goods and passengers. NRZ also used to do good business by transporting international tourists to destinations such as Victoria Falls but today, most of us are filled with dread when we think of boarding a train or even sending goods through this mode of transport. Most businesses have abandoned the railway systems and are now transporting goods by road which is very expensive, considering the state of our major roads and the high cost of fuel. It is not viable to transport good by road. It actually makes these goods more expensive and our people actually have to use money for these goods.
Mr. President, the NRZ transported nearly ten million tonnes of goods in 2000. This has dropped to 3.7 million tonnes in 2013. The NRZ needs to ferry about 5 million tonnes to break even. We have to ask ourselves what went wrong. The reasons are clear Mr. President. Our equipment is old and it experiences breakdowns. We also have issues to do with security where equipment is vandalised. In fact, it is appalling that NRZ had to abandon cheap and efficient electric trains on the Harare to Gweru route. You remember that there was a Harare and Gweru railway and it was really cheap and people were really excited until cables were stolen. Surely, we really have to guard against these thieves that are doing a disservice to the NRZ. The NRZ like other hon. senators said who have spoken before me, is definitely facing a financial crisis. By 2011, it had accumulated losses of $105 million. Information at hand shows that its current liabilities exceeds its assets by about $17 million. The organisation needs $700 million Mr. President, to restore normal operations. It has been reported that negotiations were underway for $450 million loan from the Development Bank of Southern Africa. Even if that loan was availed soon, that still leaves the NRZ with a shortfall of $250 million. So, really, some more money has to come from somewhere else. We are hoping that this will come true and our railway will get back to where it was. I hope our Minister of Finance knows what really a mammoth task he is facing.
Mr. President, as things stand, NZR’s ability to attract funding is very limited at the moment. Because of its poor financial performance, the NRZ does not have current tax clearance certificate from, what I read from this report. It also owes ZIMRA at lot of money, almost $43 million and that is a lot of money. There are also suspicions of corruption there at NRZ and it actually needs to be investigated to see how best we can avoid these corrupt activities.
In conclusion Mr. President, I want to advise that the Government must recapitalize the NRZ as a matter of urgency. Yes, the country is facing financial constraints but considering the strategic importance of NRZ to the national economy, this matter deserves to be prioritised. The NRZ management must come up with a viable business plan within the six months prescribed by the Public Accounts Committee. Without the plan, it is impossible to raise the money.
The Government must also ensure that a substantive management is appointed, because as of now, currently the top managers are actually acting – including the General Manager. They have been acting for a very long time. The Government must also ensure that whatever equipment is bought conforms to the modern railway standards. It is better to buy new equipment which may be expensive in the short term than to keep trying to fix the old which is way past its viable 25 year lifespan. On this note it may also be useful to ask what happened to the high-speed trains which were reported to have been ordered from China?
Security of rail infrastructure to avoid the vandalism that I spoke about must be beefed up as well so that NRZ does not continue to lose vital equipment through vandalism and theft. The Government must restore the confidence of the business community and the public so that they get back to using the railway to ship their goods and for ordinary travel. The Government must address all issues of suspected corruption in railway tender processes and other related matters. All those found to have been corrupt must be prosecuted. With these few sentiments, I thank you Mr. President. – [HON. SENATORS: Hear, hear.]-