eBusiness Weekly
Natasha Chamba
Listed financial services group ZB Financial Holdings has so far drawn down $120 million of the targeted $150 million resource envelop under the second phase of the Emergency Road Rehabilitation Fund (ERRF).
The financial services provider was retained by the Zimbabwe National Road Administration (zinara) as lead advisor for the ERRF after it raised $105 million in the first round of the fund.
The zinara bond, which was spearheaded by Government was meant for sprucing up the country’s road network, half of which was damaged by rains over the past years.
ZB chief executive officer Ronald Mutandagayi told our Bulawayo Bureau that the $150 million road infrastructure deal was making an instant improvement in the country’s road network.
“So far we have drawn down $120 million of the $150 million resource envelope to spruce up the country’s road network, which has been excessively damaged by rains over the years,” he said.
“We expect the balance to be utilised by year end though the cost will rise a bit due to the fact that the rainy season has kicked off as it is costly to resurface roads during the summer season.”
Mutandagayi said the first phase of the programme was focused on preserving the integrity of the existing road network by rehabilitating the drainage system, patching potholes, clearing culverts and repairing bridges while the second phase involves periodic maintenance and resurfacing.
He said the third phase would include the construction of new roads and dualisation of some major roads across the country.
According to the African Development Bank (AfDB’s) flagship study on the state of Zimbabwe’s infrastructure, the country’s total road network of nearly 90 000 kilometres, the proportion in fair to good condition has declined from 73 percent in 1995 to 60 percent to date.
Experts argue that the present state of infrastructure in the country was one of the most significant constraints to set economic growth targets.
Dilapidated infrastructure has largely curtailed foreign direct investment (FDI) flows into Zimbabwe, especially as it drives up the cost of doing business.
Mr Mutandagayi said the financial institution, together with its partners, plan to raise $350 million next year for road rehabilitation.
Meanwhile, ZB and a South African company, Neo Capital, have signed a $1 billion deal to transform the country’s road network in the next two years.
Due to the nature of the project, the ZB-Neo Capital partnership has created a project management unit, which will guarantee success of the project.
The management unit consists of ZB, Neo Capital, Department of Transport and Infrastructural Development, zinara and local authorities to manage the fundraising of the project. The management unit was expected to carry out quarterly meetings to update on the progress and hindrances of the project.
zinara collects over $150 million annually from road access fees, vehicle licensing fees, transit fees and fuel levy, among other revenue streams.
The recent Visual Road Condition and Inventory Survey conducted in 2017 by the country’s road authorities including the Zimbabwe Local Government Association (Zilga), concluded that $5, 5 billion was needed to bring the country’s road network to trafficable state.
