HomeBusiness DigestNine parastatals to go

Nine parastatals to go

Godfrey Marawanyika

THE Privatisation Agency of Zimbabwe (PAZ) has earmarked nine parastatals for restructuring and privatisation by 2006.

rial, Helvetica, sans-serif”>The parastatals being considered for offloading include Air Zimbabwe, Zimbabwe Power Company (ZPC), National Railways of Zimbabwe (NRZ), Zimbabwe Iron and Steel Company (Zisco), Tel*One, Net*One and the Forestry Company of Zimbabwe.

Government has not privatised any of its parastatals over the past two years.

PAZ spokesperson Priscilla Mapuranga this week confirmed that the restructuring would cover a wide range of options from complete to partial privatisation.

“The options range from complete or partial privatisation of various public-private partnership that introduce market incentives into the state-owned enterprises but enabling the government to retain strategic equity holding,” she said. “The focus for the public enterprise reform programme for the period 2004-2006 will be towards the restructuring and the turnaround strategies of the public enterprises.”

Government hopes the restructuring programme will, among other things, attract foreign direct investment, reduce public sector borrowing and access globally competitive technology.

PAZ had been made redundant by government’s privatisation policy shift last year, which resulted in any proposed restructuring or unbundling being put on hold.

Instead government opted for commercialisation of the non-performing parastatals.

Government has considered that agricultural parastatals be created to bring “transparency in the pricing and marketing of commodities”.

Over the years, government has been extending financial support to loss-making parastatals.

Despite the bailout, they have continued to operate below capacity with some failing to provide basic services.

Government has a 100% stake in Air Zimbabwe.

The PAZ hopes any improvement in the national airline will directly influence “perceptions on Zimbabwe and impact on its development, as it will contribute to the tourism sector”.

Air Zimbabwe had attained a bad reputation for its sudden cancellation of flights.

The PAZ says it hopes the ZPC will help power importation since the country imports 35% of its electricity needs.

It says this would be done through the energy sector reforms to be implemented by ZPC under a “fast track capacity expansion programme to reduce dependency on imports”.

Zesa’s unbundling process has so far led to the creation of ZPC, Powertel, Zesa Enterprises, Zimbabwe Electricity Distribution Company and the Zimbabwe Electricity Transmission Company.

Mapuranga said the NRZ’s restructuring exercise would take the form of unbundling and concessioning through long-term contracts.

The PAZ says it is scouting for an investor that would inject a 30% equity into both Tel*One and Net*One.

She said various strategic measures were being implemented at Zisco, which had now engaged an advisor to work on its balance sheet.

The move is meant to pave the way for increased private sector participation.

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