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(HERALD) Report on parastatals to be submitted to Cabinet

Report on parastatals to be submitted to Cabinet
By Walter Muchinguri

A report on the controversial, loss-making performance of parastatals is due out next week, a spokesman said yesterday. It is to be submitted to the Cabinet by the inter-ministerial committee assigned to the task by the Government.

The high-powered team includes Finance Minister Tendai Biti and Minister of State Enterprises and Parastatals, Joel Gabbuza Gabuza.

It was set up two weeks ago to assess the parastatals’ suitability for privatisation or commercialisation, as the Government steps up efforts to mobilise funding for its operations.

The committee also includes officials from the State Enterprises Restructuring Agency.

Biti said they would make several recommendations, including one on the beleaguered the national airline, Air Zimbabwe.

"There is an urgent need for Government to allow Air Zimbabwe to acquire a strategic partner because it cannot continue to operate on its own," he said.

He said the committee had identified parastatals that would be privatised or commercialised. But he said while some parastatals were targeted, Government would be cautious of their disposal due to the global recession.

Biti said the challenge was to prepare a matrix for the disposals once the economic situation improved.

"The eye of the storm has passed, in terms of the recession in Europe, and most countries there have begun to recover. What we need to do is lay the foundation of the restructuring matrix in order to take full advantage of the opportunities when they arise," he said.

The exercise comes at a time Government has recently unveiled a US$1 billion budget and the Short-term Emergency Recovery Programme, that needs US$8 billion.

In his budget review statement, Biti noted the funding of the budget, STERP and the crafting of a new constitution would require significant external financial resources, which could only be realised through serious engagement with international partners.

But he noted that while this engagement was underway it was important to consider the disposal or rationalisation of the country’s "silverware", such as the parastatals.

The commercialisation and privatisation of parastatals started in earnest in the early 1990s, but only a few companies were privatised.

These included CBZ Bank, Dairibord, the Cotton Company of Zimbabwe, Zimre and Rainbow Tourism Group.

The former parastatals have been transformed into profitable entities, competing robustly on the open market.

But Government still holds 100 percent shareholding in the poorest-performing companies - National Railways of Zimbabwe, Zesa Holdings, Cold Storage Company, Air Zimbabwe and the National Oil Company of Zimbabwe.

Labels: PARASTATALS

posted by MrK @ 4:49 PM