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Rupiah promised to resolve Zambian Airways, NACL problems - Magande

Rupiah promised to resolve Zambian Airways, NACL problems - Magande
Written by George Chellah
Thursday, June 18, 2009 10:54:15 PM

FORMER finance minister Ng'andu Magande on Wednesday told the joint investigating team probing the operations of Zambian Airways that President Rupiah Banda promised to intervene in resolving the problems between National Airports Corporation Limited (NACL) and Zambian Airways.

And Magande said under the Loans and Guarantees Act Cap 366 the minister of finance is responsible for all loans and guarantees to government and to all parastatals including NACL, a provision which gave him authority to get involved in the affairs of NACL and many other parastatals to resolve their problems.

Well-placed sources in the joint investigating team revealed that in his warn and caution statement to the investigating officers, Magande said he was aware that Zambian Airways owed some money to NACL in form of airport charges and that this came to his knowledge through a letter written by Zambian Airways to the minister of communication and transport on June 9, 2008 and copied to his ministry.

"Mr Magande said some information on this matter came through his officers who had discussions with management of Zambian Airways and NACL. He said these discussions were at his instructions in order to establish the status or the relationship between NACL and Zambian Airways in as far as the outstanding charges were concerned and how far these unpaid amounts would affect the capital investment programs of NACL. He said in the briefs from the officers he came to learn that the arrears owed to NACL were less that US$2 million accumulated overtime," the source said.

"He said after knowing the financial difficulties in the relationship of the two institutions he requested the minister of transport and communications to send to his ministry written documentation on the matter. He said the documents submitted to them included those from Zambian Airways and NACL and that all these documents were submitted to his officers for study and advice.

"He said on June 26, 2008 he received advice from his officers in a draft letter on what advice to render to the minister of communications and transport who had requested him to do so. He said on that same date he signed a letter signed to Honourable Dora Siliya headed; REQUEST FOR A DEFERMENT OF VARIOUS CHARGES BY ZA, since the matter had been with his ministry for some time when the documents had been submitted," the source said.

The sources said Magande explained that on June 25, 2008 in his farewell telephone conversation with the late president Mwanawasa he mentioned this problem and the possible course of action.

"He said in early July 2008 he heard that no action had been taken on the basis of his advice. He said this was from officers who were following up with the Ministry of Communications and Transport and NACL and that he checked with the managing director for NACL whether he had received any advice from the parent ministry on this matter. He said the managing director indicated that he was still awaiting communication from the Ministry of Communications and Transport. Mr Magande said somewhere in the middle of July 2008 he received information that there was a problem at the airport as Zambian Airways planes were not being attended to and that he contacted the managing director to find out what the problem was. He said the managing director assured him that there was no problem and that Zambian Airways operations were only affected by inefficiency, which delayed the departure of most of its flights including international flights," the source said.

"Mr Magande further said a few days later information from one of his officers that NACL had indicated that they would not be servicing Zambian Airways planes the following day due to financial problems, which had been brought to the attention of the government through the Ministry of Communications and Transport and the Ministry of Finance and National Planning. He said he immediately wanted to contact the minister of communications and transport and came to learn that she was out of the country and that he then contacted the managing director for NACL who indicated to him that since the problem of Zambian Airways had not been resolved they could take any action in order to recover their money. He said he informed the managing director that the timing was very poor as there was a very important international function being organized by the National Assembly.

"Mr Magande said this conference was being held in Livingstone Southern Province and that these delegates the following day were to be ferried to various parts of Zambia by local airlines including Zambian Airways in order to showcase Zambia's development efforts and that among the places to be visited were Nakambala Sugar Estates, Kafue Gorge Hydro Power Station, Lumwana mines in North-Western Province and the Copperbelt Province.

He said he also brought it to the attention of the managing director that the previous week, the rumour that His Excellency LP Mwanawasa had died has had a very poor and negative reaction from both investors and on the capital markets and that in fact the kwacha had depreciated on the spread of that news. He said he then directed that no such action should be taken on the following day as it will have serious negative effects on the confidence of both Zambians and the international community on the capability of the interim government to run the affairs of the nation."

The sources said Magande narrated that the managing director did not give him assurance that he would not obey his instructions.

"Mr Magande said he then phoned the acting president [then Vice-President] RB Banda to bring to his attention his conversation with the managing director for NACL and that he requested the acting President to get in touch with Ms Siliya as he obviously knew where she had gone so that she could assist in reinforcing his proposals to Mr Misitala. He said as his conversation with the acting President was late perhaps 22:00 hours he indicated that it might not be easy to talk to the minister but that he would see what he would do to make sure that the intended action by NACL was not carried out. Mr Magande said a day or two later he checked with the Clerk of the National Assembly whether the program of ferrying the Commonwealth parliamentarian delegates had been successful and she confirmed that this was so and evidence was there in the daily newspapers, where senior members of the Commonwealth Parliament commended Zambia's efforts in developing the nation," the source said.

"He said this according to his recollection was his last active participation in the resolutions of the issues between Zambian Airways and NACL and that for all he can recall somewhere in August, 2008 a newspaper article in the Executive Business magazine alleged that he had interfered in the operations of the Zambian Airways in their relationship with NACL as a way of campaigning towards his ambition to replace His Excellency Mwanawasa as president of Zambia. He said these allegations continued in various forms either through tabloids or the internet and were finally made public by His Excellency Rupiah B Banda somewhere in February 2009 while addressing a crowd of MMD cadres at State House and that a few days after His Excellency President Rupiah Banda's public announcement on the alleged commission of an offence while in office it was announced by the deputy minister of justice at a press conference that the matter of Zambian Airways and the former minister of finance was being investigated by a team of security officers."

The sources said Magande said under the Laws of Zambia, the Minister of Finance under Cap 349 is an incorporated entity who could sue and be sued.

"He explained that this is because the minister of finance and national planning is the shareholder [only shareholder] in all parastatals and private institutions on behalf of government and the people of Zambia and that under the Loans and Guarantees Act Cap 366 the minister of finance is responsible for all loans and guarantees to government and to all parastatals including NACL. He said this is the provision that gave him the authority as minister of finance at the time to get involved in the affairs of NACL and many other parastatals in order to resolve their problems," the source said.

"Mr Magande said the Loans and Guarantees Act and Cap 349 also gave him a personal responsibility to contract loans on behalf of government and that he used these same legal provisions to personally with advice of his officers to negotiate cancellation of loans to government with international multilateral and bilateral creditors. He said the international debt was reduced from US$7.2 billion to US$500 million and that most times he did this with his officers with minimum recourse to advice from His Excellence the President who was his supervisor. He said he feels sad that the problem with NACL of only US$2 million could not be resolved by his capable and efficient team at the Ministry of Finance and National Planning negotiate."

Labels: MAGANDE, NACL, RUPIAH BANDA, ZAMBIAN AIRWAYS

posted by MrK @ 9:53 PM