Oliver Kazunga, recently in Bulawayo
NATIONAL Railways of Zimbabwe (NRZ)’s assets have been revalued at over US$3 billion, meaning the parastatal is not insolvent as previously alleged, a senior official said.
Previously, the State railway company’s assets were estimated at just US$400 million, but an assets revaluation carried out by an independent consultant has indicated that NRZ assets are in fact 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, Ms Zinyanduko said the Government through Statutory Instrument 142 of 2019 announced that the Zimbabwe dollar shall be the sole legal tender in the country and the functional 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 stronger 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.