THE National Railways of Zimbabwe (NRZ) says it has cleared its pension arrears that had swelled over the past few years as the parastatal teetered on the brink of collapse, NewsDay has learnt.
The NRZ Pension Fund was owed more than $5 billion.
The pension arrears were part of a mammoth debt legacy weighing the NRZ down and hampering its revival efforts as it was scaring away potential investors.
NRZ spokesperson Andrew Kunambura, however, said the new management had cleared all legacy debts.
“The new management led by general manager Respina Zinyanduko has made it a priority to clear all legacy debts. You will understand that on her appointment, she was charged with the responsibility to stabilise the company whose reputation was dented by several legacy issues, among them outstanding employee salaries,” Kunambura said.
“This is in addition to a long list of foreign debts which threatened the survival of the business. As we speak, all these statutory debts have been cleared. The employees are remunerated on time and are not owed a dime anymore and now the pension arrears have been cleared. It’s a sign of good things to come.”
Last year, the Insurance and Pension Commission ranked the State-owned railway company the second worst in terms of pension debt when it released its name-and-shame list.
Kunambura said Zinyanduko had demanded maximum effort from the management team and the “results are starting to be realised, with the debt clearance plan well on course”.
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“We are now getting to a point where the NRZ balance sheet gets attractive to potential investors,” he said.
Kunambura said the NRZ had also reduced its foreign debt burden to Hethimex and Portos e Caminhos de Ferro de Moçambique (CFM, Mozambique Ports and Railways).
“To put this into context, CFM was owed US$6 million and they were threatening to ban NRZ trains into Mozambique. However, this debt has been reduced to US$3,2 million.
“That part payment has helped greatly to normalise our relations with CFM and we can now do business together in peace.
“Today, we are witnessing yet another key achievement in our debt clearance plan. NRZ is no longer owing the NRZ Pension Fund. The outstanding debt was accruing punitive interest charges and management took a bold decision to clear the debt for the benefit of both serving and former employees. All these debts were cleared using internally-generated funds.”
On the operational side, NRZ committed a certain percentage of its monthly cash flow towards procurement of spares and rehabilitation of infrastructure, while waiting for its several recapitalisation initiatives to bear fruit, he said.
Kunambura said the legacy debts had troubled the company for many years.
“The debt was accruing punitive interest charges and was becoming unbearable for the organisation. I would like to appreciate the NRZ staff for their dedication to duty,” Kunambura said.
“All these debts were settled using internally-generated funds. We could not have made it if it were not for these hardworking employees.”
