Govt draws up state assets recapitalisation plan

GOVERNMENT has identified five state assets which would require a combined US$2,1 billion to be revived within the next 12 months.


According to an investors prospectus made available yesterday, government said the Zimbabwe Power Corporation requires US$900 million to be revived in the next three months whilst a total of US$160 million is needed to recapitalise public company Hwange Colliery in the same period. National Railways of Zimbabwe require US$274 million to start functioning smoothly. Air Zimbabwe needs US$750 million immediately to operate viably and compete with other airlines. TelOne immediately requires US$278 to upgrade its network.

Zimbabwe Investment Centre Chief Executive, Richard Mbaiwa yesterday said private enterprises which had been identified as requiring urgent funding include Seed Co, Continental Private Limited, African Associated Mines and Infrastructure Development Bank.
Cabinet last month approved a commercialisation and privatisation plan which will take different forms as part of a rationalisation, reconstruction and transformation agenda.
The country needs close to US$10 billion to rivitalise its battered economy and has so far received close to US$2 billion.
Minister of Finance Tendai Biti recently told businessdigest that government would assess different state assets and decide on the model which they will use either to commercialise or privatise them.
“Cabinet has approved the process of commercialisation and privatisation. This includes how it will be done, the timing and objectives,” Biti said.
Biti said the process had been divided into different categories and classified state enterprises under each of the groups to ensure maximum benefit for the country.
He said there are some high-value state companies which had huge potential but needed capitalisation and good management.
This category includes companies such as TelOne, POSB, power stations, Zisco and National Railways of Zimbabwe.
He also said there were strategic high-value enterprises which were seriously draining the fiscus such as Air Zimbabwe.
“These would need comprehensive commercialisation and partnership plans to be revived,” Biti said.
Biti further said there were strategic high-value state enterprises which were currently dormant but had potential if they could be revived. These include companies such as the Cold Storage Company and Arda.
“Government should consider various options to revive and resuscitate these companies,” Biti said.
He indicated that some of the companies needed to be commercialised and privatised at the opportune time to ensure government gets maximum benefit.
Biti said government was determined to ensure that commericlaisation and privatisation plan succeed because it was an integral part of the economic recovery programme Sterp.

BY PAUL NYAKAZEYA

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