NATIONAL Railways of Zimbabwe (NRZ) is in the process of terminating a joint venture agreement with Landela Safaris after the parastatal suffered losses during the deal.
NRZ entered into a joint venture with Landela Safaris to lease its prime land in Victoria Falls in 1998.
According to the agreement, Landela Safaris would construct two houses and lodges, along with a commercial centre being developed on the land.
NRZ general manager, Respina Zinyambuko told the Public Accounts Committee Monday that the parastatal may have been prejudiced in the joint venture.
"What we have done is we wanted them to be compelled to submit the financials then we compare what we have so that at least we can see the potential prejudice. In that JV NRZ has 26 percent so it is a minority shareholder," said Zinyambuko.
Zinyambuko told the Committee that NRZ are in the process of terminating the agreement which is currently under arbitration.
"We have realized that JVs will be very difficult for us while concentrating on our operations as NRZ people can overstate the operational costs and everything and you end up with nothing.
"So we have revisited all these JVs and some we have terminated and opted for outright lease. This one we are terminating the joint venture because we have realized we are not getting anything. Instead, we are opting for this other arrangement," said Zinyambuko.
The national railway operator has been reportedly losing funds after years of mismanagement of its assets portfolio.
The management and board are making efforts to plug in the losses which will see the parastatal gaining profits from its ventures.
NRZ board chairperson Mike Madiro told the PAC committee that the Landela Safari deal has become "toxic".
"What we have learnt is there were serious governance issues with this joint venture to the extent that there were no board meetings.
"The relationship between NRZ and the other parties was 'toxic' to the extent that when the management was trying to convene the board the other parties were refusing," said Madiro.
