NRZ takes legal action against defaulting tenants
THE National Railways of Zimbabwe (NRZ) is taking legal action against defaulting tenants leasing its properties and has launched a nationwide blitz to recover over US$2,3 million owed by the leaseholders.
NRZ is the country's biggest private land owner and boasts numerous properties under its real estate portfolio with the capacity to generate at least US$1 million per month in rentals.
However, the portfolio has been underutilised over the years.
NRZ's has started the process to address the situation including reclaiming some of the parastatal's land and buildings that had been leased out and sublet to third-party clients yet the rail operator was realising very little income in return.
Some of the company's properties had also been illegally occupied by land barons who paid nothing to the company.
The parastatal's public affairs and stakeholder relations manager Mr Andrew Kunambura said the action to address the anomaly was already bearing fruit as NRZ now generates around US$600 000 per month from its real estate portfolio.
“The company has already instituted legal proceedings to evict illegal tenants from its properties and recover the money it is owed in outstanding rentals.
“The cumulative figure we are owed, as per aggregates from our accounts department, is US$2,3 million.
“A number of tenants occupying NRZ premises have not been paying rent for years, adversely affecting revenue inflows from its real estate business,” he said.
Mr Kunambura added that some of the tenants were in the habit of name-dropping high-profile people, including senior police officers when asked to clear their arrears in a bid to prevent the NRZ from demanding what is due to the company.
In a recent case, he said, NRZ employees spent two days in police cells on separate occasions after being arrested for trying to evict top Harare-based Nigerian clergyman and businessman, Nick Ohizu, who occupied NRZ properties through his company Ojei Investments.
“Ohizu has been resisting eviction from NRZ land after his lease agreement expired. This is despite the fact that the High Court issued the eviction order after considering that he violated the terms of the lease agreement by failing to pay rent since 2006, with his total rental arrears hitting US$200 000.
“He also established a residential property on the land and made subdivisions which he sublet for commercial leases, realising substantial amounts of money without paying rentals to NRZ,” said Mr Kunambura.
“Despite this being a civil case in which the courts had twice ruled in favour of the NRZ, police were called in by the tenant and took his side.
“Other tenants who had been allocated space at the property were caught in the crossfire and also spent some time in police cells,” he said.
He said the National Prosecuting Authority declined to prosecute the NRZ employees on the strength of the court orders in the authority's possession.
Mr Kunambura said another issue of concern was that some tenants were now claiming ownership of premises owned by the NRZ.
“The NRZ has set up an asset verification team to identify illegal tenants and properties which have been illegally taken over. An exercise undertaken by the verification team has shown that Victoria Falls and Harare are the main problem areas, although the practice is prevalent throughout the country,” he said.
Mr Kunambura said members of the verification team have been met with threats from illegal tenants who have been enjoying free tenancy, some to a period stretching over 10 years.
“The decision to institute legal proceedings against illegal and defaulting tenants is part of an initiative by the NRZ board and management to undertake a strategic revenue assurance drive to augment the Government's efforts to recapitalise the organisation.
“The board and management believe that maximising revenue generation from its existing revenue streams such as real estate will go a long way in complementing capital which will be raised through external lines of credit and treasury support.
“We would also like to take this opportunity to inform members of the public that anyone who wants to utilise its land or premises should go through the formal leasing procedures and pay for them,” he said.
“The Second Republic is known for restoring order and we cannot have a situation where individuals benefit from the national assets at the expense of the country. No one has the right to enjoy money from a public entity while exploiting others by charging exorbitant prices,” he said.