Chikolwa opposes $98m expenditure on Society House
By Gift Chanda
Tue 29 Nov. 2011, 08:30 CAT
FORMER Stanbic Bank Zambia managing director Joseph Chikolwa says
the investment of US $98 million into the refurbishment of Society House and Central Arcades was unjustifiable.Appearing before the commission of inquiry on the operations of the Zambia Building Society (ZNBS) yesterday, Chikolwa opposed former ZNBS board chairperson Joyce Nonde-Simukoko who last week justified the US$98 million expenditure on Society House and Central Arcades refurbishment on grounds that ZNBS was losing enough revenues in rentals.
"It is my humble opinion that the investment of US$98 million in the refurbishment of Society House and Central Arcades was not justifiable," Chikolwa submitted.
"It is true that Society House after the unfortunate fire became a non-performing asset for ZNBS. But in normal circumstance this building should have been fully insured against risks including fire in which case the proceeds from the insurance claim should have been used to refurbish the building and bring it back into a performing asset."
Chikolwa wondered if all options were exhausted before the decision to spend US$98 million on the project was taken.
He said in the absence of funds to refurbish the building either from an insurance claim or internal resources, authority to sell the building at market value through an open tender should have been sought.
Chikolwa said the proceeds from the sale would have gone a long way to recapitalise ZNBS.
"Indeed this capital which is locked up in a non-performing asset would be released and utilised presumably in building the mortgage book," he said.
"In other words, the task of financing the refurbishment should have been left to the private sector using private funds. No doubt private investors would have done the refurbishment in line with the market needs. Sometimes you may have to sell the ‘family silver' in order to make a fresh start."
Chikolwa also questioned the financial returns on the investment.
"The market return on property investments of a financial nature similar to the one being undertaken by ZNBS is around 10 per cent annualised. This means that on an investment outlay of US$98 million, ZNBS and partners must expect an annual return of US $9.8 million or monthly revenue of around US $800,000," he said.
"The market rate for rentable commercial space is on average US$15 million per square metre. Therefore, to achieve a monthly income from rent of US $800,000 you need about 50,000 square metres of rentable space."
He explained that excluding the 30,000 square metres car park, the complex is expected to have a 10,000 square metre hotel, 7,000 square office space and 12,000 square metres of shops and restaurants, giving a total of only 29 square rentable space.
"One then wonders therefore how the facility will be able to generate a market return of 10 per cent annualised on a car park and 29,000 square metres," said Chikolwa.
Labels: CORRUPTION, JOSEPH CHIKOLWA, STANBIC
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Chikolwa optimistic over rising copper prices
Written by Mutuna Chanda in Chingola
Wednesday, August 12, 2009 7:17:19 PM
STANBIC Bank managing director Joseph Chikolwa has expressed hope that rising copper prices on the international market will remain sustainable.
In an interview after the official opening of a new Stanbic Bank branch in Chingola on Tuesday, Chikolwa said higher copper prices meant more foreign currency for the bank and good fortunes for its clients, some of whom supplied to the mines.
“I just hope that the (high copper) price is going to be sustainable,” Chikolwa said. ìIt looks like it has rebounded and is moving in the right direction. What is important is that it remains stable-not fluctuating- for the purposes of planning.”
And speaking during the opening of the branch, Chikolwa said Stanbic Bank was very inspired by the recent upward movement in copper prices.
He appealed to the bankís customers in the mining industry to continue looking to it as an all-weather friend.
“At a time when we should have been downsizing we are expanding our presence here,” he said. “Recently we were laying the foundation stone for our new headquarters in Lusaka. All this only goes to practically demonstrate our confidence in our economy and our determination to ensure that when the situation is fully back to normal we will be here ready to attend to your needs.”
He said the new Chingola branch cost the bank about K3 billion to set up.
Chikolwa also donated 20 Stanbic branded waste bins to the Chingola Municipal Council.
And officiating at the ceremony, Chingola mayor Simon Chanda said he, among other ëcity fathers, felt greatly inspired to witness the expansion of existing banks and the return of financial institutions that had previously closed.
He said such were very positive indicators of the confidence that business houses had in the economy and Chingola in particular.
Chanda also lauded Stanbic Bank for donating 20 bins which had been placed in various parts of Chingola.
The new Stanbic branch in Chingola is an addition to its old Kwacha Road branch which has been converted into an agency to be manned by two cashiers and one customer consultant.
Labels: COPPER, JOSEPH CHIKOLWA, STANBIC
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Maamba picks new management team
By Business Reporter
THE Zambia Consolidated Copper Mines- Investment Holding (ZCCM-IH) is to appoint a new management team at Maamba mine to help revamp operations, ZCCM-IH chief executive officer Joseph Chikolwa has said. Mr Chikolwa said the company is currently in receipt of a number of bids from interested parties who would like to partner with ZCCM-IH in Maamba.
The colliery has not been operational for over 18 months. Mr Chikolwa said in response to a Press query yesterday that the company had since already appointed a new managing director and Finance manager.
“We are putting in place a new management team, where necessary we will recruit new personnel such as managers to look after the engineering, mineral processing, and geology and mining functions,” Mr Chikolwa said.
He said ZCCM-IH would also reconstitute a new board of directors soon after consultations are completed.
Mr Chikolwa also said the company was working on a new business and financing plan for the mine.
“The business and financing plan was currently under review with a view to have mining operations start as soon as possible in order for the mine to become self supporting,” He said.
The ultimate plan is for ZCCM-IH to reduce its shareholding in Maamba from the current 100 per cent. Maamba coal has been the main stay of coal mining operations in Zambia for decades.
Labels: JOSEPH CHIKOLWA, MAAMBA COLLIERY, ZCCM-IH
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