22 February 2018

Mozambique: CFM Urged to Collect Debts From Its Clients

Maputo — Mozambican Transport Minister Carlos Mesquita on Thursday urged the publicly owned ports and rail company, CFM, to make a major effort to collect the money its clients owe.

The clients' debt to CFM now stands at around 60 million US dollars. Speaking at a meeting of the CFM Council of Directors, in the southern city of Matola, Mesquita said it is imperative to undertake serious work with the main debtors, including appointing a debt collector and giving a deadline for payment of the money owed.

Mesquita urged the CFM Board of Directors to control compliance with the debt collection directives and to ensure that no similar accumulation of debts occurs in the future. Without collecting the money owed, it would be difficult for CFM to improve its economic and financial performance, he added.

The Minister was pleased to note that in 2017 traffic along the Mozambican rail system increased by 39.4 per cent, and the amount of goods handled in Mozambican ports rose by 28.4 per cent. “This is a sign that the efforts to maximise the use of our rail and port facilities is meeting a favourable response from the market”, said Mesquita.

The theme for the meeting is “For a robust and competitive CFM”, which, Mesquita added, fully expresses the government's view that CFM “is called upon to consolidate its strength and competitiveness on the regional and national market”.

“The reduction in operational costs should be regarded as a fundamental management indicator”, he continued. “The company needs to use the available resources in a careful and rational manner, taking into account the need for higher profitability”.

As for CFM's holdings in areas outside of its core business, Mesquita said only those which brought in significant revenue should be kept in CFM's hands, since the company had to concentrate on its main mission, which was the efficient exploitation of the national and regional rail and port market.

Mesquita was concerned at rising staff costs. “The weight of staff costs in the cost structure must be profoundly assessed”, he said. “The company needs to take concrete measures to avoid another intervention to rationalise the work force similar to what happened in 2004”.

Mesqita was referring to a massive operation, undertaken with World Bank support, to slim down the CFM work force, in which thousands of workers were made redundant, retrained, or encouraged to start their own businesses. Currently CFM employs over 5,000 workers, of whom 480 are over 55 years old.

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