NRZ reports zero financial returns from 25-year venture

THE National Railways of Zimbabwe (NRZ, has yet to receive any financial benefit from its joint venture with Landela Safari Adventures, for the management of the Landela Complex in Victoria Falls.

This is despite the partnership having been in place since 1998, as revealed by the Parliamentary Public Accounts Committee.

Shockingly, no board meetings have been held since the inception of the agreement over two decades ago.

The committee, chaired by Kuwadzana East legislator Honourable Charlton Hwende, is currently conducting inspections of public assets across the country. On Saturday, the delegation, which included representatives from the Auditor General’s Office, the Ministry of Finance, Economic Development and Investment Promotion, NRZ and Landela Safari Adventures, visited several NRZ properties in Victoria Falls. These included Victoria Falls Station, Victoria Falls Hotel, an 8 000-square-metre plot and the Landela Complex.

Public Accounts Parliamentary Committee tours Landela Complex

This marks Parliament’s second visit to Victoria Falls to assess NRZ’s properties. During a similar tour last year, the Parliamentary Portfolio Committee on Transport and Infrastructural Development learned that NRZ was losing out on substantial revenue — estimated to be in the tens of thousands of US dollars — due to its failure to manage its extensive real estate portfolio effectively.

At the time, NRZ management acknowledged the issue and stated that the parastatal’s real estate department was in the process of identifying and reclaiming control of its assets to boost revenue and address its financial difficulties.

The Landela Complex, which houses over 30 shops, including a bank, two restaurants, two microfinance institutions and an airline office, has been at the centre of a long-standing dispute between NRZ and Landela Safari Adventures.

NRZ is now seeking to terminate the relationship, citing a loss of potential income and a lack of transparency.

The partnership was established in November 1998 under a rent-based lease agreement. Landela Safari Adventures was to lease three NRZ staff houses and, at its own expense, convert them into lodges. In return, NRZ would retain ownership of the land and take over the lodges after 25 years, without any compensation.

However, instead of lodges, Landela developed a commercial complex — now known as the Landela Complex — on the site. This deviation from the initial agreement led to a dispute and the signing of a new agreement in October 1999, under a joint venture company named Victoria Falls Trading Post.

Since then, disagreements over shareholding, financial disclosures and general management have persisted. NRZ maintains that the partnership has not generated any returns and that delays in resolving the dispute have disproportionately benefitted Landela.

NRZ

Briefing the Public Accounts Committee, NRZ chief finance officer Mr Patrick Mwashita, revealed that no board meetings had been held since 1998, due to ongoing disagreements.

“Three of the houses were constructed, but one remains outstanding. In terms of sharing information, trading accounts and audited accounts, this has not been done,” he said.

Mr Mwashita stressed that NRZ has not financially benefitted from the agreement since its inception in 1999.

“Over the years, NRZ has been following up and, we have extensive correspondence between us and Landela, requesting financial statements and formal board meetings. Unfortunately, to date, there has not been a positive response from Landela, and we are now pursuing legal action,” he said. Landela Safari Adventures, represented by its lawyer Mr Garikai Sithole, acknowledged the committee’s concerns and requested additional time to compile written submissions.

“The Parliamentary Public Accounts Committee had questions, they wanted us to address and we provided responses. They require further information, which we have committed to providing by next Friday, to the best of our ability.

“From the outset, since 1998, this has always been a business relationship, and I believe the intentions of the two partners should ultimately guide the resolution,” he said.

Mr Hwende said that the purpose of the visit was to gather as much information as possible regarding the matter. He encouraged the parties involved to find common ground and resolve the issue, despite the ongoing court proceedings.

“We have requested both NRZ and Landela to submit all necessary documentation by Friday. This will enable the committee to address the Auditor General’s findings effectively,” said Mr Hwende.-chroncile