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Gross mismanagement and corruption threaten NRZ’s viability

Alleged gross mismanagement and corruption of unparalleled levels at the National Railways of Zimbabwe (NRZ) are threatening the state entity’s viability, investigations by CITE have revealed.

Despite the management’s narrative that NRZ is facing operational challenges, the truth of the matter is that the company is generating significant income which is allegedly being misappropriated by the same at the expense of nearly 4, 000 employees most of whom are paid peanuts.

At its helm, NRZ has Respina Zinyanduko as the General Manager (GM) who took over the reins in January 2021 in an acting capacity following the death of acting GM Joseph Mashika. Zinyanduko, the first-ever woman to head the railway company was in December last year appointed substantive GM.

Prior to the coming on board of the two, the Bulawayo-headquartered NRZ has been led by the late Air Commodore (Retired) Mike Karakadzai) and Engineer Lewis Mukwada respectively.

While NRZ business volumes have improved way better than in the Karakadzai and Mukwada eras, still there is nothing to show for the suffering employees owing to alleged mismanagement and bad corporate governance at the parastatal.

The situation is so bad that frustrated workers are ditching the company on a weekly basis, some without even serving any notices.

NRZ, which last bought locomotives over 30 years ago is currently leasing from South Africa’s Transnet and SheItam, something that comes at a huge cost for the entity.

“The situation at NRZ is far worse than you can imagine,” said an employee privy to the operations at the company, once the envy of many in its golden days.  

“The Sheltam locomotives occasionally spend days parked because the NRZ has no fuel. Same story with what’s remaining of Transnet locomotives. Taking a thorough cost over benefit analysis, fuel cost is at most 3% of the income generated hence close to negligible.”

The biggest fuel tank on a locomotive is 6000 litres for a DE11, 4500litres for a DE10, and 3000liters for a DE9.

According to NRZ’s daily locomotive utilisation analysis report for June 16-17 seen by CITE, three locomotives (2104, 34612 and 34840) were parked awaiting fuel while one locomotive (1036) was waiting for sump oil. On the other hand, a total of six locomotives (1011, 1015, 2103, 2109, 34851 and1036) were completely out of service.

As of Tuesday, June 21, the locomotive position was 4 x DE11, 8 x DE10, 17 x DE9, 3 x DE6 and three South African locomotives.

“It’s actually more expensive to park a locomotive than to run it,” he said.

“Fuel shortages are a result of mismanagement and misplaced priorities by the untouchables, otherwise fuel is not a big deal at all.”

Company insiders say the NRZ is more than capable of generating enough revenue to sustain and even recapitalize itself if it was not for maladministration.

“Not only is the venue being generated through goods transportation, ” said the insider.

“The company has a lot of buildings and land for lease under its Real Estates department though they claim everything is for the pension fund. Enough money is there. The last time I checked, NRZ was charging US$ 0.50 per tonne per kilometre. A wagon carries up to 70 tonnes. If it’s carrying coal from Hwange that’s US$35 per km.

It’s around 300km from Hwange to Bulawayo and it’s around US$10500 per wagon. For a full load of 26 wagons it becomes US$ 273 000 just from Hwange to Bulawayo. Assuming it’s a DE10 locomotive with a 4500 litre diesel tank and it spends all the diesel, the fuel cost is US$7785. From the income generated US$265 215 remains after removing fuel cost.”

He further explained: “Now assuming the train moves once a week, US$1 060 860 is generated per month by just one train if it moves from Bulawayo to Hwange once a week. Now system wide we have 5 DE11 locomotives plus about 10 DE10 locomotives, 3 DE6 locomotives plus about 6 DE 9 locomotives. These are purely ours and generating millions and millions a month. On top of our own locomotives, the company is hiring locomotives from Transnet and Sheltam.”

NRZ also has fixed contracts with the Zimbabwe Power Company (ZPC) for coal, Tongaat Hulett for sugarcane from cane fields to the processing plants and then sugar to Chikwalakwala Mozambique while Chinese mining companies are transporting chrome using rail

According to World-Wide Rails, a diesel locomotive could cost from US$500,000 to US$2 million while an electric locomotive could cost more than US$6 million and the prices depend on whether it is powered by AC or DC traction and how much horsepower it has, or what electronics it is equipped with.

“NRZ has the capacity to buy modern locomotives but they are not buying,” decried the insider.

“They have the capacity to pay workers a living wage but they are not. They have the capacity to buy their own spare parts but they hide behind sanctions. At one point they established a HeathMax deal whereby the company would buy spares on their behalf. That was during the Karakadzai and Mukwada era. However, the deal was one way of siphoning money.”

So, where are all the millions generated daily by the NRZ going?

The company loses thousands of dollars daily on locomotives hired from Transnet.

“At first they used to pay and Transnet used to buy its own spares,” explained the insider.

“They (NRZ) stopped paying for reasons best known to them and Transnet then neglected their locomotives. They no longer care to buy spares. Their locomotives can spend days if not weeks under repairs, waiting for spare parts to be scavenged from yet another faulty locomotive. Transnet charges per day, whether you use a locomotive or not.”

He further elaborated: “A good example is locomotive 34 226 that spent more than a week in the workshop only to be released just yesterday (13/06/2022). Locomotive number 34 232 is still in the workshops and it’s been more than two weeks now. The deal is costing the company.”

Negligence is so rampant that some trains that breakdown are left unattended over petty issues. For example in March a train that had developed vacuum challenges in Mbembesi could not be attended to by examiners just over unavailability of toll gate fees.

See the WhatsApp conversation below:

When NRZ started defaulting on Transnet payments, the company engaged Sheltam for similar services.

“For the meantime, they seem to be in good books with Sheltam but as their culture, they will start dragging payments, we know them,” he said.

Investigations by CITE unearthed that conditions at NRZ workshops are so horrible that artisans and other technicians are operating on dirty, oily and slippery surfaces which are rarely cleaned. Tools used by technicians and their safety clothing also leave a lot to be desired.

“Artisans at NRZ were last issued safety clothing more than two years ago but they are expected to work,” said another employee.

“They have no tools but they are expected to work. They are not supplied with spare parts but they are expected to produce. This is frustrating artisans away from the company.”

Disgruntled employees who declined to be named said corruption by management was a major setback to the company’s revitalisation prospects.

NRZ has been made a cash cow for the elites,” said one employee.

“Copper wires for the electric train recovered in a quest to avert vandalism and theft, where are they stored? Where did they go? Who took them? The electric trains which were decommissioned. How many are left now? Where are they going?”

He further queried: “In Bulawayo at the winding shop, there used to be a dump site for removed copper windings, where did it go? Poles for electric cables for electric trains are being cut and disappearing.”

The victimisation of workers, especially trade unionists, by the Zinyanduko-led administration is one thing NRZ employees said was a serious cause for concern.

“Railway artisans have been reduced to paupers,” decried an employee.

“They have tried by all means to negotiate with the company through their Railway Artisan’s Union (RAU) but the management was hostile enough to fire the union reps. Artisans have lost hope in the company. The hostility of the GM is yet another reason for the exodus of the artisans. The company last bought tools more than two decades ago. Artisans were subsidizing the company all along using their personal tools for the sake of progress so it hurts to associate with such an ungrateful soul.”

The workers have accused Zinyanduko of not only failing to run NRZ but also identifying her critical staff.

“She values those who drive locomotives more,” said a worker.

“She doesn’t even know that artisans can drive those locomotives. It’s common knowledge that every mechanic is a driver. Some other railway companies are using artisans to drive such that in case of a breakdown, they just fix and go.”

He explained further: “Railway companies recruit from other railway companies. You can’t just pick an artisan from whatever company or street to replace a railway artisan. The company (NRZ) will never replace the knowledge gained through experience by these artisans in transit. No one is remaining behind to teach or train new artisans. It’s been more than three years now with NRZ not recruiting apprentices. The company is heading for a disaster.”

Employees say Zinyanduko is on record having said that she would not be arm-twisted by those leaving the parastatal whom she described as not team players, adding they would always recruit at our own time when it is conducive for the business.

Zimbabwe Amalgamated Railway Workers Union (ZARWU) former president Kamurai Moyo and ex-RAU president Sikhumbuzo Dube were recently fired by Zinyanduko for rallying behind striking teachers in February.

“Being involved in these union things is the most dangerous now,” said an employee.

The ZARWU president was retrenched this year. ZARWU president wrote a letter in solidarity with teachers. So this lady (GM) had been waiting for a moment to get rid of these guys.”

NRZ sources said when the Zimbabwe Congress of Trade Unions (ZCTU) tried to appeal against the retrenchment of the trade unionists, officials at the line ministry said Zinyanduko had already approached them to block that.

“They (ministry officials) said, ‘ we have got a challenge because the GM came here and told us that the guys were in solidarity with the people who were on regime change agenda and she told us ‘I want to see which one amongst you is going to direct me to reinstate enemies of the state’,” said a source.

As part of the ‘restructuring’ exercise, Zinyanduko has placed over 450 employees, most of them artisans, on the surplus list, something which employees feel is a ploy for silencing and keeping them under check.

“It surprising that an engineering company doesn’t need artisans,” said one employee.

“Most probably these people are not going anywhere, but if I tell you they are told that you are surplus but in the meantime, you continue working, now you can’t even ask for an increment isn’t? If you are in surplus would you go on strike? You would be removed immediately.”

He said the RAU president and secretary-general have since been gotten rid of.

“Now we are left with a vice president and a vice secretary-general and they work at mechanical workshops and they are on this surplus list,” he lamented.

“So you think they will be contacting you and doing interviews and stuff? They won’t put themselves in the spotlight like that. The executive (RAU) has six people. She (Zinyanduko) has already removed two and everyone else is in surplus.”

The lowest-paid employee at NRZ who is subgrade A1 earns a gross salary of about ZWL$14, 000 following a recent increment of 50 percent which is still way below the government’s recommended minimum wage of ZWL$25, 000.

Artisans at grade C3 are earning a basic pay of about ZWL$60, 000, a third of what a ZESA apprentice is taking home, not to mention the US$1, 200 pocketed by those in the mining sector.

“Salaries are still coming late,” said a worker.

“The transport allowance which we were supposed to use from the 1st of June we got on the 9th.”

Frustrated workers believe Zinyanduko could have been given the job by the NRZ board as a way of rewarding her for clearing employees’ 17 months’ USD owed salaries in the inflation-ravaged local currency, something which previous managers could not dare do.

Previous management had made plans to convert the money owed to employees into residential stands using NRZ land notwithstanding courts had ruled that USD debts could be repaid using local currency at a rate of 1:1.

However, while Zinyanduko was still acting GM, she moved on to clear employees’ outstanding salaries, some of which amounted to over US$30, 000, in RTGs, something that did not go down with many.

In paying the outstanding salaries Zinyanduko divorced employees from their unions and made them individually sign the agreements.

She however had to triple the payments in what she said was an act of her generosity – ex-gratia.

“She said ‘every one of you has to sign individually and if you don’t sign I will take it that you are implying you don’t want the ex-gratia part, so you will just get your money at a rate of 1:1,” said an employee.

“She did that when she was still acting. Maybe that’s why she got the job. Previous management has been failing to clear this for a while.”

While NRZ has always had problems before, workers say the coming on board of Zinyanduko has exacerbated the already dire situation.

“Some of these things were there on a lesser scale but now have been more magnified,” said a worker.

“The issue of victimisation was never this bad.”

He said the new GM was far worse than her predecessors.

“This there is no comparison,” he said.

“This one (Zinyanduko) is out of depth. She has never worked at such a senior level of management wherever she has worked. She has been like a corporate service manager and not like running a company. She is way, way out of her league, there is no comparison.”

He added: “The workers are actually shocked that she is winning awards. We are actually shocked; we don’t know the criteria used to come up with these things.”

In March NRZ was listed by the Insurance and Pensions Commission (IPEC) as one of the top 50 pension contributors who are defaulting and owing about ZWL$670 million.

“They deduct from employees but don’t remit to the pension fund,” decried an employee.

“So the effect is that the NRZ Pension Fund cannot make significant pension increases since they don’t have liquidity due to their money which is held by the employer. RailMed Medical Fund is the same story. NRZ is deducting medical aid from money from salaries but not remitting, so the medical aid cards are not accepted by doctors and pharmacies.”

He added: “The only institution able to get deductions from NRZ is NSSA (National Social Security Authority) because they have garnishing powers.”

Employees feel NRZ management should be divorced from the politics of the country for it to operate profitably.

“What needs to be done first is to separate business with politics,” said one employee.

“Not every decision must be politicized. This translates to the appointment of the board and the general manager. Competence must supersede political affiliation.

He added: “A general manager is supposed to be someone who understands day-to-day to day running of the business. Also, the government must take full responsibility for the parastatal, not just milk it.”

Contacted for comment, Zinyanduko said the NRZ board would issue a statement today (Friday) addressing some of the allegations.

“The NRZ board will issue a statement today by the end of the day so you can get your answers from that statement.”

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