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NRZ clears $326m salary arrears

by Staff reporter
07 Sep 2021 at 18:25hrs | Views
The National Railways of Zimbabwe (NRZ) has cleared its legacy salary arrears that accrued from 2012, after paying out $326 million to employees from its coffers, in a development that is expected to make its balance sheet attractive to potential investors.

Some investors tend to shy away from organisations that are saddled with huge debts, hence the frantic efforts by such companies to either pay-off or have them warehoused.

NRZ acting public relations manager Mr Martin Banda told The Herald yesterday that clearing the legacy salary issues would boost the company's profile as it seeks investors.

"The National Railways of Zimbabwe has cleared the legacy salary arrears from 2012," he said. "The arrears were accrued due to the financial challenges that were bedevilling the bulk goods carrier.

"The organisation started paying 100 percent of net salaries from 1 July 2019 and ring-fenced all salary arrears that had accumulated up to 30 June 2019.

"The NRZ board and management are pleased to advise all relevant stakeholders that with effect from September 2021, the NRZ has been able to liquidate all outstanding salary arrears owed to employees."

Mr Banda said while the law states that debts accruing from 2019 must be settled at the rate of 1:1 in terms of Statutory Instruments 33 and 142, the NRZ board resolved to voluntarily increase the amount, taking into account the erosion of the value of salaries owed due to inflation, resulting in the payment of $326 million in settlement of salary arrears.

"The NRZ expresses its gratitude to workers for the patience they demonstrated while the company pursued efforts to pay-off the arrears," he said.

"The settlement of the legacy salary issues is going to improve our image in the eyes of investors. After settling the arrears, even if you are going to engage investors, you know you will get something."

Government was previously expected to take over the salary arrears to clean NRZ's balance sheet so as to attract investors.
The NRZ had clinched a US$400 million recapitalisation deal after agreeing with the Diaspora Infrastructure Development Group (DIDG), but the deal was cancelled on allegations that the company did not have the requisite funds.

Presently, the NRZ is in talks with a Turkish investor, Yapi Merkez, which is keen to recapitalise the company. A memorandum of understanding has already been signed between the two companies.

The Herald understands that officials from the Turkish construction giant are in the country to assess NRZ's infrastructure both in Zimbabwe and Mozambique.

Source - the herald