Maravi

Zimbabwe offers parastatal companies to Investors

Zimbabwe offers parastatal companies to Investors
Written by Kingsley Kaswende in Harare, Zimbabwe
Friday, July 10, 2009 4:18:41 PM

The Zimbabwean government is giving up complete ownership of some of its flagship parastatal companies to willing private investors. This came to light at the inaugural Zimbabwe Investment Promotion Conference at which President Mugabe and his government appealed to global investors to take their capital to Zimbabwe.

Among the companies which the government is offering part ownership to private investors are Air Zimbabwe, National Railways of Zimbabwe, Zimbabwe Power Corporation, telecommunications company TelOne, Grain Marketing Board and the Small Enterprises Development Company.

Information contained in the investment prospectus distributed at the conference indicates that the Zimbabwean government is surrendering up to 60 per cent of the struggling airliner, which it currently wholly owns.

The airline needs US $750 million to renew its fleet and to overhaul its hanger fire system, and any willing partner who avails the money may either assume 60 per cent equity or provide it as a loan.

The airline, which has largely survived on government handouts over the last decade, last month announced that it would retrench 420 of its 1,500 workers this year as undercapitalisation, a huge debt, poor load factors and foreign currency shortages bear down on it.

Of all parastatals that were propped up by the Zimbabwean government until January 2009 when it stopped, Air Zimbabwe turned out to be the biggest financial gobbler, using up between US$3.7 million and US$4.5 million every week.

In 2008, the airline spent not less than US$95 million from the Reserve Bank of Zimbabwe.

With regard to the National Railways of Zimbabwe, which has been operating at between 30 per cent and 50 per cent capacity due to undercapitalisation, the government is seeking a partner to provide US $274 million under a Build, Operate and Transfer (BOT) arrangement.

The project involves the upgrading of the Railway System, which has a designed capacity of 18 million metric tonnes.

The government is also seeking a joint venture in the Zimbabwe Power Corporation that will expand the generation of power at the Hwange Thermal and Kariba South power stations as well as other mini-hydro plants.

The project requires a cash injection of US $900 million.

With regard to TelOne, the government needs a loan or Public Private Partnership that will kick-off the network upgrade as well as capacity expansion

The project, which is expected to be undertaken in three phases (optical fibre transmission backbone, Soft Switching/Internet Protocol nodes, and access networks) is estimated at US $278 million.

The government is also giving up assets in the Grain Marketing Board, a parastatal involved in agricultural grain trading, processing and logistics, for US $13.5 million.

The government is also seeking a US $2 million investment into the Small Enterprises Development Company to lend up to 200 small and medium-scale enterprises in the food processing, garment-making, metal fabrication and carpentry sectors.

Labels: NEOLIBERALISM, PARASTATALS, PRIVATISATION, ZIMBABWE

posted by MrK @ 3:21 PM