Parastatal reform is an important part of economic restructuring. Although there has been a recent recovery, on the whole, since independence in 1980 the financial and operational performance of National Railways of Zimbabwe (NRZ) has declined. This paper attempt to identify and evaluate the factors which determine the performance of this parastatal to permit ready focus for policy decision makers. Accordingly evaluate the recent financial performance of NRZ via ratio analysis. In the second part of the paper regression analysis is used to determine the factors which most influence the performance measures of NRZ.This elicits discussion on the impact of the restructuring reforms taking place and the extent to which greater emphasis on a more market oriented approach to public sector railway transport management might yield positive economic results