Business Weekly (Zimbabwe)

NRZ revalued above US$3bn

- Oliver Kazunga, recently in BULAWAYO

NATIONAL Railways of Zimbabwe (NRZ) assets have been revalued at above US$3 billion and this now entails that the parastatal is not insolvent as previously alleged, an official has said.

Previously, the rail entity’s assets were estimated at US$400 million but an assets evaluation carried out by an independen­t consultant has indicated that NRZ assets are worth over US$3 billion.

NRZ general manager, Ms Respina Zinyanduko, said with such a strong balance sheet, this has opened opportunit­ies for the organisati­on to borrow for recapitali­sation of operations.

She said the board and management were of the view that the organisati­on’s assets were not properly valued.

“Thus, we contracted Bard Real Estate, an independen­t company to do an assets evaluation exercise that has resulted in a proper value and a comprehens­ive asset register where the assets are valued at over US$3 billion.

“Prior to the valuation of the railway infrastruc­ture, NRZ assets had an estimated value of US$400 million, which was a gross under-valuation of the company’s assets.” she said.

In June 2019, Zinyanduko said the Government through SI 142 of 2019 announced that the Zimbabwe dollar shall be the sole legal tender in the country and the functional currency or the reporting currency.

“The NRZ engineers and the technical teams carried out the exercise as at December 31, 2019. “However, external auditors when they were presented the report, part of audit of 2019 NRZ financials, they then recommende­d that NRZ should engage an independen­t profession­al evaluator to establish the true value of its assets to give them some level of comfort on the fair value of the assets,” she said.

With a strong balance sheet, the rail entity can now borrow to recapitali­se its operations.

In the past, NRZ struggled to secure lines of credit or loans due to the perceived poor balance sheet that made the organisati­on to be classified as technicall­y insolvent.

“With proper valuation of NRZ assets, it can be seen that the company is not insolvent as previously alleged.

“Such a strong balance sheet will allow NRZ to borrow to support its business and to look for equity partners who will pay for its actual worth.” Meanwhile, the parastatal has embarked on a US$3,5 million revamping programme of its rolling stock to improve operationa­l efficiency.

The project includes a US$2 million export-fit wagons refurbishm­ent initiative that began in October 2021 and is expected to save Zimbabwe millions of dollars in foreign currency. The railways organisati­on is grappling with a host of challenges among them, obsolete rolling stock fleet, ageing railway line and old wagons and coaches.

Last year, NRZ successful­ly embarked on a litigation- free restructur­ing exercise and came up with a structure board and management believes to be robust structure as it is believed this will see maximum utilisatio­n of staff and improve efficiency.

The new structure sought to remove a top-heavy structure and to deploy most employees to operations with leaner structures in the support services department­s.

As a result of the exercise, management re-assigned most of the employees on a lateral transfer basis to other areas of need where the organisati­on would benefit from their service.

Training and re-training of staff was done to enable the redeployed staff to perform their duties efficientl­y.

Under the new structure, directors were reduced from six to three, staff number from 4 800 to 3 751 at present.

“Staff reduction is through natural attrition and a deliberate ploy to fill vacancies from internal staff who are retrained and deployed to needy areas.

“The company managed to clear legacy salaries with an ex-gratia amounting to $326 million and is now up to date with its salary payments whose monthly bill is currently +/-$400 million,” said Ms Zinyanduko.

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