National Railways of Zimbabwe achievements 2021-2022
The National Railways of Zimbabwe (NRZ) is a state-owned enterprise established by an Act of Parliament (The Railways Act). The NRZ is in the business of rail transportation and maintenance. The railway line covers a total of 2760km with 67 cautions stretching over 249.72 km. Furthermore, NRZ has vast tracts of land and properties system-wide.
In 2021, the NRZ embarked on the restructuring exercise anchoring the 10 year Strategic Plan, which is broken into three phases, the Stabilisation phase, the Growth phase and the Expansion phase. In line with Vision 2030 and under the Stabilisation phase, NRZ also embarked on stabilizing the ship and preventing it from further sinking.
The strategies for recapitalization, re-organization and transformation are aimed at making NRZ a modern and efficient transporter of choice for both bulk passengers and freight.
NRZ business volumes have been coming down, from the 12 million tonnes it used to move annually in the 90s to the current level of 2.3 million tonnes due to antiquated equipment and infrastructure. As a result, the company continues to post losses annually, the audited accumulated loss as of 31 December 2020 stood at ZWL8.582 billion and in the year 2021, the NRZ posted a loss of ZWL2.1 billion (unaudited) with conversion loss on foreign loans contributing ZWL1.2 billion.
Achievements Recorded
Payment of legacy arrear salaries debt
NRZ had a debt of $87.9 million in staff salaries for the period running between 2012 and 2019. NRZ cleared all the arrear salaries including an ex-gratia component using internally generated funds. The total amount paid was ZWL326 million which at the time translated to USD3,8 million.
Restructuring
The NRZ successfully embarked on a litigation free restructuring exercise and came up with a robust structure that sought to 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. 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 (6) to three (3) Staff number was reduced from 4 800 to current level of 3 751. Staff reduction is through natural attrition and a deliberate ploy to fill vacancies from internal staff who are retrained and deployed to needy areas. Substantively filled managerial post and this has been the driving force for programme stability of the organisation and savings have been realised from relief and acting allowances. The company managed to clear legacy salaries with an ex-gratia amounting to ZWL326 million and is now up to date with its salary payments whose monthly bill is currently +/-ZWL400 million.
Separation of meters for utility bills
NRZ has been saddled by huge bills on utilities mainly due to the non-separation of bills among private tenants, NRZ employee houses and NRZ operations buildings. In order to reduce utility bills, NRZ embarked on separation of power lines to ensure each household has its own meter and the first area targeted was Raylton and Nguminja houses in Hwange where NRZ received 2 bills in a space of 3 months worthy ZWL33 million and ZWL20 million respectively. These bills were not sustainable for the organisation and were contributing to the loss position of the company. Most occupants were benefiting from the non-separation as they were leasing pieces of land inclusive of electricity costs to private tenants who would do high consumptive projects like welding and the bills were passed on to NRZ. NRZ thus met a lot of resistance from various sectors of the community who were determined to derail the project. The project was however successfully completed and handed over to Zimbabwe Electricity Distribution Company. The total project cost for Raylton and Nguminja was approximately ZWL58 million. The separation of water meters in Hwange is still to be done. The next project will be done at Westgate Bulawayo for both water and electricity meters.
Real Estate
The revenue from the real estate side had been minimal with allegations of corruption and malpractice being the order of the day. In 2021 we embarked on the process of cleaning up this area and our revenues generated from this area increased by more than 100% in USD terms.
NRZ is dealing with the issue of land barons who were paying sub-economic rentals to NRZ in RTGS and charging sub-tenants commercial rates in USD. The Company is now zoning its land to have blanket rental payable per square metre for each area. We are pursuing a number of options for growth among them pursuing a joint venture with FBC for the development of a SMEs Park, space rationalisation to release some of the space for leasing, and multi tenanting for space in high demand. The revenue collected from Real Estate in the first quarter of 2022 is ZWL128 million and this figure is expected to increase with the initiatives currently being pursued.
NRZ has also released 9 floors at New Headquarters back to the NRZ Pension Fund realising savings on rentals.
Renovations
Most of NRZ properties are in a sorry state and we have embarked on a phased approach to spruce them up, starting with the Chairman’s Club House which has been redone and works completed. NRZ is dedicating 100% of the money collected from residential properties and 30% from commercial properties towards renovations of its buildings.
Procurement of operational vehicles
NRZ had a major challenge of lack of operational vehicles which incapacitated the NRZ teams in cases of emergency recoveries and general maintenance. However, in 2021 the Organisation managed to buy;
12 Lorries from FAW: Received and commissioned. 11 Nissan NP 300 trucks from Nissan Clover: Received and commissioned. 11 Honda Fit- Received and commissioned. 3 Crew mini-buses: paid for. 1 received and 2 are in transit from Durban 1 Ambulance – Received and being fitted 17 Motor cycles: Received and commissioned. 3 Toyota Hilux – Received 4 Nissan Hardcopy double cab – Received 3 Toyota Fortuner - commissioned 16 Isuzu double cab Management Vehicle: 12 received and 4 outstanding
These purchases will go a long way in addressing the transport issue, especially which were faced in transporting crews, ferrying Track workers to their various work stations, visiting customers, and transporting reaction teams on time. Managers are also able to attend to various issues including sourcing business and supervising their staff as they are now mobile.
The motor cycles have increased visibility of our Loss Control and Security as they can access areas which were not easy to access using vehicles.
Plans are now underway to purchase vehicles for supervisory levels (including Engineers and Traffic Officers) to enable them to execute their duties efficiently.
Revaluation of NRZ Assets
The Board and Management were of the view that the NRZ assets are not properly valued and thus contracted an independent company to do an Assets evaluation exercise and BARD Real Estate is undertaking this process which is expected to be completed by end of April 2022. This will result in a proper value and a comprehensive asset register. So far from the valuation of the railway infrastructure and the preliminary report presented, indications are the NRZ assets will be above USD3 billion. The estimated value of USD400 million currently obtained was thus a gross under-valuation of the company’s assets.
Locomotives, Wagons, Coaches and Tanks
NRZ is currently facing a number of challenges among them a depleted rolling stock fleet, aged equipment, aged railway line, and old coaches among others. The average life span of its wagons is between 40 and 60 years while the last batch of locomotives was purchased 29 years ago. To keep the company going the NRZ Engineering teams have embarked on a number of projects detailed hereunder.
Conversion of old locomotives to increase capacity
Faced with the shortage of mainline locomotives and hiring the same led to the realisation that this was not a desired option for the organisation due to foreign currency constraints. Engineer R.L. Nhunge together with a team of four Technicians (Mr B. Gapara, Mr A. Dube, Mr C. Jele and Mr B Nleya) heeded the call by the General Manager to be innovative and come up with a homegrown solution by proposing and implementing the harnessing of electronic technology available in the market to replace the obsolete parts and upgrade the transition DE 6 (Shunt) Locomotives to operate in the mainline.
The conversion project that the NRZ engineers embarked on is the first for the organisation and presents a plethora of opportunities for increasing capacity, in terms of traction power, and reducing hiring costs, as well as equipping the D6 locomotives with flexibility for utilisation on shunting and mainline duties. This project has saved the organisation a total amount of US$135 000.00 per month on hire of locomotives.
Refurbishment of 100 Tankers
This project commenced in October 2021 and resulted in the refurbishment of 20 Tankers per month and was completed in February 2022. The project cost was USD160,000 and was undertaken using internally generated funds. The tankers were deployed for fuel imports and will assist in generating foreign currency and reduce overreliance on other contiguous railway companies like CFM.
Refurbishment of wagons
NRZ is currently hiring export fit wagons from South Africa. A resolution was made to upgrade some of the NRZ wagons to export fit status and this project commenced in October 2021. Initially, spares were being bought for a total batch of 1000 wagons. However, after the market was hit by inflation, the company decided to carry out the project in batches of 200 with a target of releasing a minimum of 20 export fit wagons per month.
The first batch of 14 wagons was released in March 2022. Procurement of spares is ongoing and the project is expected to be in full swing by the middle of the second quarter. Once the project is completed, NRZ will do away with hired wagons.
The total project cost will be approximately USD2 million and is being funded using internally generated funds. The Company is also targeting the conversion of 200 wagons from vacuum to airbrake. This project is expected to cost approximately USD1.5 million and will be funded using internal resources.
Reintroduction of Urban Commuter Trains in Partnership with ZUPCO
NRZ has taken a stance of collaboration instead of competing with other stakeholders. In the year 2021 NRZ partnered with Zimbabwe United Passenger Company (ZUPCO) in the provision of commuter trains in both Harare and Bulawayo.
The NRZ leased coaches to ZUPCO to run commuter trains and ease transport challenges in Harare and Bulawayo. The commuter train service is running on three routes in the capital and one route in Bulawayo.
The commuter trains are running on the City-Ruwa, City Mufakose and City- Tynwald route. The service has been well received especially on the City-Mufakose route. Meanwhile, in Bulawayo one route is used for the City to Cowdray Park.
Load Bank
Engineers and technicians at the Mechanical Engineers (MEs) Workshops saved the country more than US$500 000 in foreign currency by designing and manufacturing a load bank, a critical piece of equipment used in workshops to test locomotives, which under normal circumstances would have been imported as there is no local manufacturer. A load bank is a machine that mimics a load on wagons to test whether the loco has enough power to pull the load.
The team used material available in the NRZ Stores and from decommissioned locomotives to fashion the load bank. The prototype was successfully tested on 20 and 21 February 2021. The project is an example of import substitution projects being undertaken by the NRZ MEs Workshops to save the country's scarce foreign currency by manufacturing equipment in-house.
Production of PPEs.
Being a major consumer of PPEs ranging from consumables like Face Masks and Chemical detergents, the magnitude and resourcefulness of Mr Bright Chatukuta has seen the organisation coming up with its own range of PPEs like Dish cleaners, degreasers, sanitisers and indeed protective clothing like safety shoes. Such innovativeness gives the organisation an opportunity to manage expenditure and save money as it is now producing most of its own PPEs instead of purchasing and is exploring the idea of spreading its wings to the outside market.
Establishment of Nalatale Quarry Plant
The NRZ is at an advanced stage of setting up a static stone crushing plant for the purpose of exploitation of the quarry deposits at Nalatale. The plant will crush and screen stones to various sizes for internal use by NRZ and external customers. The setup of the Quarry Unit will involve investment in the quarry mine at Nalatale in form of a stone crushing plant with the capacity to produce between 96 800 and 464 640 tonnes of various quarry stone products annually. This will allow NRZ to produce its own ballast stones for the repair and maintenance of its tracks. Such exercise was last done a long time ago thus leaving tracks in a deplorable state. The Quarry plant has been paid for and arrived at Beira on 16 April 2022 and is expected on-site the first week of May 2022. Quarry Plant is expected to start operating, on 15 June 2022.
Repair of Tamping Machines
The NRZ Tamping machines have been out of service for more than 4 years. NRZ is in the process of repairing Tamping Machines. The target is to repair 3 machines and these should be ready for use in mid-May 2022.
Copper harvesting
The NRZ has not been spared from the current rampant thefts of copper conductors and cables that is taking place system-wide resulting in the NRZ totally decommissioning the Centralised Traffic Control (CTC) or railway signalling system. NRZ is embarking on an exercise to replace these vulnerable assets with less expensive and less attractive aluminium conductors.
In the meantime, the company has decided to harvest all the copper in its system and to date, a total of 40.186 tonnes has been harvested.
Training and Retraining of Security and Loss Control Staff
Vandals and thieves destroyed and stole railway infrastructure worth US$3,6 million in the last five years, with growing destruction largely driven by gold panners. As part of its commitment to fight vandalism and crime, NRZ trained a group of 67 security staff from employees who were deemed excess in their departments following the restructuring exercise.
The NRZ partnered with Parks and Wildlife Management Authority of Zimbabwe for the training of the new Loss Control personnel. We also took the opportunity of the presence of these highly trained personnel from Parks and Wildlife to undertake a train the trainer programme which has assisted NRZ to have the capacity to train future personnel using internal resources.
Clean-Up Campaign
The organisation has heeded the call by His Excellence Cde Dr E.D. Mnangagwa for each person to clean their surrounding environment. Due to the state of the NRZ premises, instead of doing the clean up on the first Friday of the month only, NRZ has declared every Friday a clean-up day. The clean-up exercise has unearthed a lot of equipment and spares which had been hidden by bushes which had grown in the Store Depot and Material Yards and other Railway premises. The cleanup exercise commenced on 7 January 2022 and is ongoing resulting in more areas now resembling clean environments.
Awards at Exhibition Shows
NRZ participated at the ZITF and Harare Agriculture shows in the year 2021 and came out first at both shows. Another winning exhibition was again done for ZITF 2022 and more awards are earmarked for this year 2022.
Tourism Promotion
The NRZ Museum was dilapidated and NRZ revamped it to meet acceptable standards. The official opening was done by his Excellency the President Cde Dr E. D. Mnangagwa on 20 October 2020. This resulted in tourists having more interest in the Museum with the British Ambassador visiting the Museum in 2021 among other high-profile visitors.
Targets Planned For 2022
Refurbishment of 100 Tankers through a Public Private Partnership with Strauss Logistics
NRZ entered into an agreement with Strauss Logistics wherein Strauss will pay for spares directly to suppliers and have 100 NRZ tankers refurbished. The tankers will be dedicated to the Strauss business and the cost of refurbishment will be recovered from railage. The procurement process of spares is almost complete and the project is expected to be completed within the second quarter.
Refurbishment of Stabled Mainline Locomotives
The project entails the purchase of spares required for the refurbishment of stabled shunt and mainline locomotives to augment the current serviceable fleet which has outlived its useful life. The project aims to resuscitate NRZ’s motive power base to enable it to run adequate trains as dictated by market requirements and maintain the current train service. There is a need to reduce the number of hired locomotives and work towards the use of our own equipment. Locomotives are being hired at USD1530 per day and wagons for USD33 per day from foreign companies.
The spares procurement processes are on-going, the target is to repair five locomotives in 2022 and fully rely on our own resources in terms of locomotives by end of 2023. The projected cost is estimated at between US$ 650 000 and US$ 750 000 shunt and mainline locomotive respectively.
