eBusiness Weekly
Ministry to use internal resources .Govt still keen on foreign partner
Golden Sibanda
Government says construction work on dualisation of the Beitbridge – Harare Highway will kick-start soon using local resources through the Ministry of Transport and Infrastructure Development while negotiations continue to rope in a foreign partner into the long standing project.This comes as Government faced challenges getting Anhui Foreign Corporation of China as it appears to have developed cold feet over the project amid concerns over viability of funding model for the project with fears abound that dualising the entire trunk road would be too costly visa vis the repayment period.
AFECC has reportedly suggested that they dualise the highway only up to Chivhu and thereafter only expand its width and dualise it where it approaches major town centres to cut on the capital expenditure under, a self-financing deal with the contractor recouping their money from toll fees.
The $998 million loan for the Harare – Beitbridge project was set to be repaid over 20 years from toll fees.
Zim has internal capacity
Minister of Transport and Infrastructure Development Minister Joel Biggie Matiza, said in an interview last week after a tour of National Railways of Zimbabwe facilities in Bulawayo that Government had world class expertise and equipment in the transport ministry’s department of roads and would therefore tap it to commence expansion of the road sooner than later.
“We are starting soon, we have discussed that and presented to Cabinet and we are going to start soon while negotiations with the foreign investors are going on…We are going to start here with our local initiative, what that just means we will reduce the scope of our works for the external investor.
“So we are going to start soon, we will use our internal resources as Government, as a ministry. We have done a lot of works as a ministry; the department of works has done lots of dualisation all over the country and they are doing quite a lot of splendid work. I have visited many of the roads and they meet standards.
“So that is where we are; we are going to start soon. Soon is not six months or is it four months,” he said.
Delays to implementation
The Beitbridge Road dualisation project, despite its central importance as the major transportation artery linking the north to the south, has been on the cards for a long time. Cognisant of its importance and delays to implementation, Government cancelled the tender it had awarded Austrian firm Geiger International, after it failed to secure funding to finance the project.
Geiger International had won the tender to dualise the Harare-Beitbridge Highway in 2015 and commissioned the project in May 2016, but the works did not start in time due to its failure to secure the required funds.
The contract was then awarded to AFECC, but the project has once again run into blind corners amid revelations the company has expressed reservations over how it will recoup the investment due to economic challenges in Zimbabwe and the large capital outlay given the self-financing nature of the agreement.
Zimbabwe, which is in the throes of a foreign currency crunch, has struggled to facilitate repatriation of foreign dividends. Also, in terms of the build operate and transfer model of the contract agreement, AFECC expressed reservations over the period it would take to recoup its investment.
The company reportedly feels that the number of cars that ply the high was too low for it to recover its investment within a reasonable period of time. Assuming all the vehicles pass through four tollgates (Skyline, Mushagashi, Chivi and Lutumba) along the Harare-BeitbridgeHighway and pay a minimum of $2 each, the country could collect a cumulative $744 000 per month.
In a year, the country would pocket an average of $9 million, which is thought to be too “little” to settle the estimated $1 billion funding required to undertake the mammoth road expansion project.
This contract with AFECC was the third time that the project has run into problems after Government first cancelled the tender it had awarded to Zimbabwe High (Zim-Highways), once again, over delayed implementation.
