NRZ projects 32pc revenue growth

THE National Railways of Zimbabwe (NRZ) is projecting a 32 percent revenue growth for this year up from the $66 million achieved last year due to grain, chrome ore and passenger railway uptake.

The growth projection was highlighted by the parastatal’s management to the Parliamentary portfolio committee on Transport and Infrastructure Development and this will see the company’s receipts, mainly from freight and passenger movement, growing from $66 million to $87 million.

Presenting the committee’s first report on the inquiry into the turnaround strategy for NRZ in Parliament on Tuesday, committee chairperson Dexter Nduna, said in their submissions on the current state of the company, the parastatal’s board and management noted that they were anticipating a rise in business despite the debilitating infrastructure shortcomings.

The high projections comes just three months after the State Procurement Board (SPB), awarded a $400 million tender for its revival to a consortium comprising Transnet and the Diaspora Infrastructure Development Group.

“NRZ projected that the revenue to be generated from both freight and passengers against the anticipated increase would be $87 million,” the portfolio committee told parliament on Tuesday.

“If achieved, this would be a 32 percent increase from the $66 million raised in 2016. The NRZ board and management submitted that in 2017, NRZ would transport freight tonnes amounting to $3,5 million, an improvement of about 30 percent from the $2,7 million realised in 2016.

“In terms of the passengers, NRZ is targeting to move 387 000 passengers against the 287 000 that were transported in 2016. This would translate to a 34 percent improvement in passenger transportation in 2017,” notes the report.

The committee said as part of efforts to attain its goals, NRZ proposed its salary revenue ratio from the current 94 percent to about 62 percent this year.

This, management told parliament, will be achieved through cost-cutting measures and an improvement in revenue, which is premised on rebuilding customer confidence as well as adopting a flexible approach to its pricing tariffs whenever necessary so as to remain competitive.

The company is also forging ahead with its plans to lobby Government to expedite the enactment of legislation banning bulk goods transportation by road as well as advocating for a waiver of duty on diesel for locomotives.

The parastatal is also going ahead with the sale of scrap metal, which only last year earned them $2,5 million.

The committee is, however, worried that while the reduction of the salary to revenue ratio is taking long to be implemented, there is still no compelling solutions to finance the extinguishing of the workers’ debt which is now well over $90 million.