Maravi

Govt risks selling NCZ at a loss, says Soko

Govt risks selling NCZ at a loss, says Soko
By Florence Bupe
Thu 04 Nov. 2010, 04:01 CAT

THE government has been advised to recapitalise NCZ before privatising the fertiliser manufacturing plant. In an interview, Nitrogen Chemicals of Zambia (NCZ) chief executive officer Richard Soko said the government risked selling the manufacturing plant at a loss if it decides to go ahead with the privatisation of the firm in its current state.

“The problem with privatising NCZ in its current state is that government will give it away for a song. It will not be prudent to sell the plant without first of all recapitalising it,” Soko said. “Government needs to recapitalise the plant to get the real value of its assets.”

Last month, an Egyptian firm expressed interest to procure and invest in the defunct NCZ, following an assessment of the plant.

But the Zambia Development Agency (ZDA) indicated that it was still waiting for more submissions from other potential investors. Soko said it would be more beneficial for the government to sell the plant to a local investor as opposed to a foreign entity.

The government had earlier engaged Grant Thornton to carry out a due diligence study of the fertiliser manufacturing plant before a way forward is drafted for the ailing institution.

And appearing before the Parliamentary Public Accounts Committee (PAC), Soko insisted that NCZ was still viable and all that was needed was recapitalisation for the plant to resume full capacity operations.

He told the committee that a strategic plan had been drawn and that the plant needed approximately K240 billion for rehabilitation and working capital.

“What we have discovered is that NCZ is viable and we have made recommendations to the board for scrutiny,” he said.

He further said NCZ was overstaffed, with the current staff levels standing at 520, but the company had no money to pay retrenched workers if it decides to take that route.

Soko disclosed that NCZ would need about K45 billion to retrench excess workers.
And committee chairperson Emmanuel Hachipuka stressed the need to invest in fertiliser production locally if the country’s efforts of sustaining the agriculture sector were to be fruitful.

“Our efforts to diversify our economy to include the agriculture sector can only be realised if we invest in areas such as local fertiliser production and we should resolve the issue of NCZ urgently. Let government decide whether to close NCZ and invest in a modern manufacturing plant, or recapitalise the existing plant to make it more viable,” advised Hachipuka.

Labels: EMMANUEL HACHIPUKA, NCZ, PARASTATALS, PRIVATISATION, RICHARD SOKO

posted by MrK @ 6:55 AM