Maravi

Sondashi smells corruption over dissolution of ZR board

Sondashi smells corruption over dissolution of ZR board
Written by Patson Chilemba and Margaret Mtonga
Thursday, February 12, 2009 5:14:21 PM

Zambia Railways (ZR) immediate past board chairperson Dr Ludwig Sondashi yesterday charged that he smells corruption in the dissolution of the board. Commenting on communications minister Dora Siliya's dissolution of Zambia Railways board, including two others on Sunday, Dr Sondashi said the board was dissolved because it could not agree with her on the performance of Railway Systems of Zambia (RSZ).

“I am not against the dissolution of the board because the minister has legal authority,” Sondashi said. “But I have a feeling that the board has been dissolved because it was not cooperating with the minister on the performance of RSZ when the Zambian people are getting nothing out of the concession. Like the area of investment, even this US $30 million which was highlighted by the new Minister of Finance is insufficient. RSZ has invested US $30 million in repairs but what is needed is over US $80 million.

“Both Zambia Railways board and the inter-ministerial committee of the Ministry of Communications recommended that the concession agreement should be reviewed. The minister has rejected that. This concession agreement has been written in such a way that it advantages RSZ than government. Why does she refuse to meet us and yet she has been meeting with the RSZ board. ZR is the monitoring board. RSZ is not supposed to directly report to the minister according to the Concession Agreement. I smell corruption out of this.”

Dr Sondashi said there was a “rumour” that the government intends to sale TAZARA to RSZ.

He said due to Siliya's indifference to the Zambia Railways board, he was forced to write directly to President Rupiah Banda on December 5, 2008 on the need to meet over the Concession Agreement and the operations of Zambia Railways Limited.

In the letter to President Banda, Dr Sondashi stated that the negotiating team for the concession contract did not contain nor did it consult any railway or business experienced people.

“This has resulted in a Concession Agreement which is not balanced and with many strange conditions e.g. the change of circumstances conditions and also how to handle assets not used by the concessionaire,” he stated.

Dr Sondashi stated that the privatisation negotiations were done with total disregard of the business particulars of the railway company, railway industry and the resulting Concession Agreements that were one sided to the advantage of the concessionaire.

He stated that monitoring of the concessionaire had failed because of poor organisation and unwillingness by the government to enforce the Concession Agreements. Dr Sondashi stated that lack of competence, poor organisation and lack of investments had resulted in the poor performance of the concessionaire to date.

He stated that the concessionaire had prioritised their short-term cash flow.

“Therefore, it is fair to say that the overall project so far has been a failure as the railway system today is worse off than before concession. The rail freight volumes and the status of the assets have never been so bad as today,” Dr Sondashi stated.

As for the fixed concession fees which were supposed to be paid yearly from the gross profit, Dr Sondashi stated that RSZ has only paid once from its inception due to the 'change in circumstances clause' contained in the Concession Agreement.

He stated that Zambia Railways, despite being the monitoring agent, had not been in receipt of any concession fees to assist in its operations as these were paid directly to Ministry of Finance.

Dr Sondashi stated that an inter-ministerial committee appointed by government observed that the proposed US $30 million pledged by RSZ was inadequate for a complete recapitalisation and improvement of the railway operations.

“The board directed me and I have written twice to the Minister of Communications and Transport requesting for a meeting with her, but the minister has not found it fit to meet with us,” stated Dr Sondashi.

In response, Siliya acknowledged receipt of Dr Sondashi's letter to President Banda in which Zambia Railways board requested to have an audience with the President over the Concession Agreements and operations of Zambia Railways Limited.

Siliya stated that she agreed with the board's concerns regarding both concession agreements in freight and passenger services and that something needed to be done quickly to improve Zambia Railways efficiency to the economy.

She stated that her ministry had held several meetings with the shareholders and management of RSZ in an effort to resolve the contentious issues in the Concession Agreement.

Siliya stated that a stakeholders meeting was arranged and scheduled to be held on July 24, 2008 at which the late President Mwanawasa was to be present but was cancelled.

“His Excellency, the President is fully aware of the problems we have with the concession and very soon, all these matters will be followed up. I probably should mention that the late President did agree with me that canceling the concession might not be the best option but balancing the contentious issues for mutual benefit of both parties,” Siliya stated.

“Lastly, I agree with you that the Zambian negotiating team did not do a good job on the concession but that is all in the past. We should concentrate on finding a lasting solution to the problem at hand.”

On Monday Siliya dissolved the Zamtel, National Airports Corporation (NAC) and Zambia Railways boards.

And Federation of Free Trade Union in Zambia (FFTUZ) vice-president Charles Phiri said the directive by Siliya to dissolve the three boards clearly showed how shady her decision was.

In an interview yesterday, Phiri said Siliya's decision was made in bad faith and was characterised by shady thinking.

“Siliya has caused a lot of suspicion over the dissolution of the three boards - Zamtel board, National Airports Corporation and Zambia Railways Limited boards,” Phiri said. “Especially for Zamtel, because board members were supposed to meet a day before she dissolved the boards. Why did she act like that? It shows that there is something fishy going on.”

He said if the process was done in a transparent manner, Siliya would have taken a different approach of first waiting to have the board meeting whose agenda was to discuss the future of Zamtel.

“With the stories of late that we have being reading in the media about the alleged reports that Dora has awarded a US$2 million contract to a foreign company to value the assets of Zamtel makes the public to raise a lot of questions and believe that the boards were corruptly dissolved,” Phiri said.

He said the money in question was very little, so much that even a Zambian would manage to invest in Zamtel.

“The minister has not upheld the rules of corporate governance that are very clear in our country,” Phiri said. “You cannot be a shareholder and start awarding contracts at the some time.”

Phiri urged President Banda to stop supporting issues that he did not even understand.

“As the labour movement, we are very surprised that President Rupiah Banda is supporting Dora,” said Phiri. “The President should stay away from issues that he does not understand, he does not even know the truth about tender producers. Zamtel is a national institution. The money involved raises a lot of questions and clearly shows corruption.”

Labels: CHARLES PHIRI, CORRUPTION, FFTUZ, LUDWIG SONDASHI, PRIVATISATION, RSZ, ZAMBIA RAILWAYS

posted by MrK @ 5:14 PM