HomeBusiness DigestGovt red tape to blame for NRZ woes - WB

Govt red tape to blame for NRZ woes – WB

Shame Makoshori

POOR management and government bureaucratic interference are the major causes of the crisis obtaining at the National Railways of Zimbabwe (NRZ), a recen

t, World Bank report has said.

The report titled Zimbabwe Infrastructure Assessment: Note for Roads, Railways, and Water Sectors, said the NRZ suffered an eight million-tonne slide in freight traffic between 1990 and 2005 due to poor management and government interference in its operations.

It said NRZ’s freight traffic declined from 14,4 million tonnes in 1990 to 6 000 tonnes in 2005, precipitating massive losses in revenue.

The decline is an indication of the dire state of the parastatal which has been haunted by financial problems and losses for the past two decades.

The World Bank attributed the losses to “low revenue due to carrying lower than freight traffic on offer, a rigid and inefficient tariff structure, excess staff levels and poor utilisation of assets.”

The NRZ was however confident that its depleted fleet would move nine million tonnes of cargo this year, the report said warning that to achieve increased margins, radical reforms and prudent policies were imperative to enable the NRZ to play its role in national and regional development.

“The NRZ is not free to take action without government approval. The problem would not be serious if government agreed to compensate the NRZ for losses incurred because of being forced to operate loss-making services,” the report said.

The Bretton Woods institution blamed the crisis on failure by government to compensate the NRZ for public service contracts despite provisions in the NRZ Act for compensation on such services.

Since 2000 for instance, government has provided low-cost commuter services in Harare and Bulawayo, plunging the perennial loss-maker into cash-flow problems that precipitated a marginal revenue increase of 375% in 2004 against expenditure increases of 1 017%.

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