APPOINTED AS General Manager of National Railways of Zimbabwe on November 1, Mike Karakadzai was charged with ’turning around and possibly restructuring NRZ to make it a viable entity’ (RG 12.05 p760).
Six weeks on, the retired Air Commodore announced in mid-December that he had come up with a restructuring package which ’has been adopted by the Cabinet’. During a visit to the railway workshops in Bulawayo, he explained his plan to ’unbundle’ NRZ activities into five entities during 2006: separate passenger, freight and road service operating companies, a property arm and a separate infrastructure business unit. NRZ itself will become a holding company, he proposes.
Karakadzai is confident of success. ’I served in the military for 30 years and never reported failure’, he told his audience. ’I am at NRZ to change the productivity of the company. I want production to increase, and what I can tell you is that we will be working 36 hours per day’.
The scale of the challenge facing the new General Manager is clearly set out in the Turnaround Strategic Plan, prepared by the Tripartite Turnaround Committee, which includes representatives from NRZ, the railway unions, and the ministries of Transport and Finance & Economic Development. The report lays bare serious operational, technical and financial problems that have ’paralysed’ Zimbabwe’s railway in the past few years.
NRZ’s operating profit fell from 35% of revenue in 1999 to a loss of 42·5% four years later. Freight traffic collapsed from 12·3 million tonnes in 1999 to 5·8 million in 2003. Karakadzai hopes to get the figure back up to 9 million tonnes this year.
TTC attributes the fall in traffic directly to a halving in the number of useable main line locomotives. Out of NRZ’s total fleet of 175, the number in working order fell from 52 in 1999 to just 21 by June 2004. The report said 92 out of 142 diesel locos, 11 of the 15 electric locos and all 15 steam locos were overdue for servicing. But even the overhauled locos kept failing, their reliability having been compromised by a lack of spare parts and the loss of skilled staff.
The situation is repeated with the wagon fleet, where a quarter of the 10713 vehicles were out of service. Around 44% of the fleet was deemed to be life-expired, or more than 40 years old. Of NRZ’s 314 passenger coaches, 304 were overdue for maintenance by June 2004. The document described their condition as ’particularly bad’. Many vehicles used for commuter trains and some long-distance services ’do not have any lighting inside due to obsolete components, and some have worn out floors and vandalised doors’.
Under a recapitalisation programme which started in June 2003, NRZ has been able to solicit funding from some of its biggest customers, including a number of state-owned companies such as Zimbabwe Power and Ziscosteel. So far the strategy has raised US$23·4m to fund the repair of 45 locos, with 13 completed so far. Other shippers have funded the overhaul of freight wagons, with 748 vehicles repaired at a cost of US$2·4m.
According to Zimbabwe’s business newspaper The Standard, local analysts blame many of NRZ’s problems on the government, citing interference by Transport Minister Christopher Mushohwe. In his sacking of the previous NRZ board, the minister cited its failure to implement a sound turnaround programme. But the outgoing General Manager Sam Geza accused Mushohwe himself of being the main stumbling block to the recovery programme.