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NRZ struggles to clear salary debt

In our article titled ‘NRZ clears salary debt’ published on 8 February 2019, we erroneously reported that the parastatal had cleared the monies owed to its employees. We have since revisited the interview we had with the NRZ general manager Engineer Lewis Mukada who clearly explained how the parastatal has been paying its staff since the introduction of the multi-currency system in the country.

We would like to apologise to the NRZ management, staff, and other interested parties for the harm the article caused. 

Below is the corrected version.

The National Railways of Zimbabwe (NRZ) is still struggling to clear its salary arrears since 2009 when the parastatal started paying its employees in hard currency.

In 2016, the parastatal had a prolonged strike that went on for three months as staff downed tools due to outstanding salaries.

Currently, the employees are owed close to a year`s salary which has been accumulating on a month to month basis.

NRZ which was one of the country’s largest employer now has a staff complement of 4 500 from around 12 000 workers during its peak.

“In 2009 when we went into multi-currency and we started paying in United States dollars, we started picking up shortfalls. First of all what was happening because of the cash flow challenges we started paying people 30 percent of their salary, then as we received more money, pay another 30 percent then 40 percent until we would have liquidated for that month,” said NRZ general manager, Engineer Lewis Mukwada.

“That cycle, we started doing it in four weeks and then we went to six weeks until eventually, we were now paying one month salary in a period of six weeks or a period of eight weeks. So as we were falling behind we were accumulating arrears, so this when we talk about the whole period we ended up picking up arrears of about 13 months.

“The way it was now reading was like we have gone for 10 months or 12 months without paying salaries”.

Due to the inconsistency of their pay, workers suggested that the NRZ pay whatever it could afford within one month but do so consistently.

“Workers said their pay date was so unpredictable and it could be better if NRZ whatever little it had consistently so we then adopted that. What we could pay at the time was 50 percent of peoples’ salaries. In 2016, we started paying 50 percent consistently and there was now an element of predictability,” said Engineer Mukwada.

In 2017 as business rose, NRZ went up from the 50 percent to 60 percent while the lower earning workers received 70 percent.

“2018, we went to 80 percent to 90 percent. This year January, we are now back to 100 percent as the business continues to go up. We just hit 100 percent but prices have gone up in terms of commodity prices so staff is now talking about cost of living adjustments and so on but we are trying to tackle that,” he noted.

In terms of revenue, NRZ made $87 million in 2017 while in 2018 it went up to $95 million.

“For 2019, we are projecting revenue of $125 million but now it depends on how the economy behaves because if there’s high inflation those figures certainly may change,” said the NRZ boss.

Meanwhile, NRZ was designed to move a capacity of 18 million tonnes, while the best it moved was 14.4 million in 1980 to 1990s.

Before the economic downturn, NRZ moved 12million tonnes in 1999 to 2.6 million tonnes in 2009, which was the lowest tonnage ever moved.

 

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