The Zimbabwe National Roads Administration (ZINARA) is
struggling to repay the loan acquired from the Development Bank of South Africa
(DBSA) to upgrade the Plumtree-Bulawayo -Mutare Highway due to prevailing
foreign currency shortages.
This has resulted in a series of defaults, which will see
the country paying much more. This also comes at a time when the national road
administrator has appointed an advisor to assess this contract entered into
under Public Private Partnerships to evaluate the impact.
Zimbabwe awarded Group Five, a South African firm to
rehabilitate the 882 kilometre highway, which began in 2012 and funded to the
tune of US$206 million.
The scope of works on the rehabilitation of the highway,
which started during the inclusive Government era between Zanu-PF and two MDC
formations, involved 50 percent resealing, 29 percent shoulder widening and
surfacing (7m to 10m), 21 percent reconstruction in some sections and 9 percent
state-of-the-art toll gates installation.
The Plumtree-Bulawayo-Mutare Highway upgrade is probably
one of the huge road investments undertaken by the Government since
independence nearly 40 years ago. Under the deal, the money for loan repayment should come
from toll gate fees collections.
But the prevailing foreign currency shortages has seen
ZINARA struggling to repay. It is a 10-year loan, which should be fully repaid in the
next two years, but due to a series of defaults, Zimbabwe will need more years
to settle the debt.
More so, the country is left to pay huge penalties arising
from failure to timely settle its obligations.
The adoption of mono-currency has also made the situation
even more complicated as ZINARA now needs more local dollars to butt the US
dollars.
The deal was entered during the multi-currency regime
dominated by the US dollar.
Critics, however, say this might not be peculiar to ZINARA
as some State-owned entities, which borrowed money from foreign financiers to
fund their projects may also be struggling to settle their debts in light of forex shortages.
For instance, ZESA received a US$533 million from China to
expand its Kariba hydroelectric plant but has been facing forex challenges even
to import power to narrow the supply gap.
ZINARA chairman Michel Madanha told The
Sunday Mail Business that the only source of foreign currency are transit fees,
not sufficient to meet its monthly obligations.
As such, the national road administrator was looking at
re-negotiating repayment terms.
“The assessment of the deal is still being undertaken by
the transactional advisor contracted by ZINARA and it is coming at a time when
the sourcing of foreign currency to pay the DBSA loan has become difficult
given foreign currency challenges in the economy,” Mr Madanha said in an
interview.
“Loan repayment is currently coming from the transit fees,
which is the only source of foreign currency.”
Asked whether the arrangement was yielding impressive
dividends for the country, Madanha said:
“The assessment on whether the PPP is yielding dividends to
the country is what the new ZINARA board and new management team are seized
with .
ZINARA has engaged the transactional advisor to assess all
contracts that gave rise to the PPP and evaluate whether it has achieved the
intended purpose that was there at the inception of the contract.”
Efforts to get a comment from DBSA proved fruitless. Herald
0 comments:
Post a Comment