Editor’s Memo: Zupco rot emblematic of parastatals

RESERVE Bank Governor Gideon Gono’s pronouncements in October 2006 on the ineptitude characterising the country’s parastatals may have been dismissed as the ramblings of an exchequer chief obsessed with interference in all sectors of the economy.

Gono complained then that parastatals were doing nothing to right their self-afflicted ills. Instead, Gono added, the parastatals had developed a perpetual reliance on the RBZ and surrendered their cash-flow planning and survival needs to the monetary authorities.
This week, according to media reports, Gono’s pronouncements came back to haunt two parastatals — the Zimbabwe United Passenger Company and the National Railways of Zimbabwe. In two separate stories published this week, reports pointed to the impending “collapse” of the two state utilities. Zupco cited reduced capacity utilisation as an excuse while NRZ blamed obsolete equipment.
The impression given by Gono was that the exchequer had done its part by funding the parastatals but felt let down by management, which lacked the capacity to formulate sustainable survival strategies. Gono can, in part, be vindicated for lamenting the management ineptitude after funding their operations. Zupco was given more than 152 Swaraj minibuses by the RBZ in 2008, only 34 of which were still operational by March this year, according to the news reports.
It is strange that two years down the line, the same parastatals are still asking for handouts, ostensibly to recapitalise. For some strange reason, State Enterprises and Parastatals Minister Joel Gabbuza has done very little to deal with the rot that continues to render state utilities a liability. Recently, Gabbuza was reported as instituting a probe into salary scales of the top brass at parastatals as if this was the most important issue he could pre-occupy himself with. It is just as well that he was not taken seriously. 
It is evident that most of the country’s parastatals are suffering from mismanagement, either because the heads are rotten or they have turned out to be political appointees who are only accountable to those who appointed them. Zimbabwean parastatals have become a shameful example of how corruption and mismanagement have combined to bring otherwise profitable companies to their knees.
Using the example of Zupco, it is hard to imagine how the management can hope to sustain the company through the continued purchase of buses alone. If the company’s buses cannot last for more than two years, like in the case of the Swarajs where 71% of the buses are no longer operational, it is difficult to imagine how any new purchases would help sustain operations.
The minister responsible should not look too far for the solution because the real problem has been flogged so hard, it now raises a stink. Public utility officials should not be allowed to hide their incompetence and mismanagement behind the lame excuse of the effects of dollarisation when we all know that they benefited from the RBZ’s ill-advised benevolence. Had they been led by good managers, they would have made the best of the situation.
Concerns over the lack of government intervention in the operations of parastatals find currency in commitments such as Sterp, in which the government committed itself to public enterprise reforms that would reduce dependency on the fiscus and enhance their contribution to economic turnaround.
The country cannot continue to suffer the consequences of a system of patronage that rewards mediocrity. The time has come to wield the axe on non-performers because the implementation of progressive policies will hit a brick wall in the face of managers who are accustomed to lounging around in their plush offices. Managers who superintended over the collapse of state enterprises cannot be trusted with their turnaround.
These are issues that the government should have addressed by now, unless they are part of the “outstanding” matters that characterise the haggling in the corridors of power. Gabbuza should justify his portfolio by doing something about the operations of parastatals and state enterprises. It is not enough to tour facilities, like Minister of State in the Prime Minister’s Office Gorden Moyo is fond of doing. There are issues that are crying out for action and the ministers need to show the public that they are in charge.

 

Edwin Dube

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