HomeLocal NewsMinisters clash over aircraft lease deal

Ministers clash over aircraft lease deal

CABINET ministers and top Zanu PF officials, including Simon Khaya Moyo who is Senior Minister of State and ruling party chairperson, Transport minister Obert Mpofu and Mashonaland East Zanu PF provincial chairperson Ray Kaukonde, are locked in a bitter wrangle over an aircraft tender deal following the cancellation of an Air Zimbabwe (AirZim) leasing contract with a South African aviation company.

Elias Mambo

Highly-placed government sources said the row follows the unceremonious termination of Solenta Aviation (Proprietary) Limited contract with AirZim in mid-March amid indications Zanu PF factionalism and business rivalry could have played a major role in the fall-out.

The cancellation of the lease with Solenta — whose managing director is from Zimbabwe — has hit AirZim hard and forced the struggling airline to dramatically increase its fares because it is now using bigger planes, Boeings 767 and 737, which are more expensive to run and maintain. They also guzzle fuel.

Local trips which cost US$150 have now gone up to US$190 for the economy class. A return ticket between Harare and Bulawayo now costs anything from US$190 to US$342. A Bulawayo-Johannesburg return ticket requires between US$380 and US$453.

AirZim was leasing the Brazilian-made 50-seater jet Embraer ERJ 145 from Solenta, which operates in Africa and the Middle East, but Mpofu cancelled the deal after he became transport minister following questions about how it was arranged and structured.

Kaukonde, a close ally of Vice-President Joice Mujuru, is Solenta’s representative in the country.

The aircraft was reportedly leased to AirZim from fast-moving consumer goods company Innscor Africa Limited, in which Kaukonde has an interest.

Mpofu, under whose watch the contract was terminated last month, is said to be aligned to Justice minister Emmerson Mnangagwa’s faction.

AirZim was expected to pay a refundable deposit of US$330 000 and a fixed monthly rental of US$204 000, according to the agreement.

Besides, there was a variable hourly rate of US$1 000 per one block or aircraft hour — an industry standard measure of aircraft utilisation calculated from the time the aircraft pushes back from the departure gate until the moment it arrives at the arrival gate following landing — to be invoiced separately under the Aircraft Crew Maintenance and Insurance Wet Lease Agreement.

In a wet lease, an aviation company (lessor) provides an aircraft, complete crew, maintenance, and insurance to an airline or a broker of air travel in which charges are calculated on hours operated.

The lessee provides fuel and covers airport fees and any other duties or taxes.

A wet lease generally lasts one month to two years; anything less is considered a charter.

According to the agreement, Solenta’s two planes — one part-time and the other full-time —used to service the local Harare-Bulawayo-Victoria Falls and the regional Bulawayo-Johannesburg routes. The part-time aircraft used to fly three days a week, while the full-time one flew daily.

There were negotiations for a second aircraft. AirZim pilots were already being trained to fly the planes.

Solenta — a specialised commercial aviation company formed in October 2000 — was awarded a one-year contract to ply local routes on May 16 last year at the company’s head office at Broadacres, Fourways in Johannesburg, close to the Lanseria International Airport.

The company’s managing director is Paul Hurst who went to school at St Georges College in Harare and worked for AirZim and other companies before joining Solenta. His brother Mark Hurst is group managing director.

The operation manager is Sharon Gray who also lived in Zimbabwe before moving to South Africa.

Aviation sources say government authorities felt the agreement was a rip-off as it was too expensive for AirZim.

While Solenta was charging the national flag carrier exorbitant fees amounting to over US$200 000 per month, similar aircraft could be leased from elsewhere for as low as US$50 000.

“Solenta Aviation was paid over US$3 million during the subsistence of the contract and is currently owed US$1,1 million by AirZim,” an aviation source said.

“This shows how expensive the contract was.”
The termination of the contract and anticipated re-tendering for new wet leases today has caused serious clashes in government and Zanu PF circles.

Sources close to the deal said on Wednesday Kaukonde and Khaya Moyo had a heated meeting in Harare with Mpofu where the two accused the Transport minister of interfering with the Solenta contract because of political considerations.

Khaya Moyo and Kaukonde belong to the Mujuru faction.

According to AirZim, the decision to enter into an agreement with Solenta was made on the basis that it was more economical to do that than use the much bigger AirZim’s Boeing 737 and 767 which are costly to run.

Sources said Mpofu’s ministry was now investigating the Solenta deal.

“This is a factional fight with a business dimension in which senior Zanu PF officials are at each other’s throats over a deal which went sour,” said the aviation source.

“Kaukonde is involved in the deal on Solenta’s side and Mpofu terminated the contract which was issued under his predecessor, Nicholas Goche, a Mujuru loyalist.”

However, Mpofu told the Independent yesterday the lease had already expired and that its termination had nothing to do with who is currently running the ministry and AirZim. “The tender had expired and in any case it is not the minister who deals with the tendering processes,” Mpofu briefly said, before the line cut.

The Independent established that government is expected to flight tenders today in the Government Gazette inviting companies to supply small aircrafts — 35 to 50-seater planes — which will ply domestic and regional routes.

In an interview yesterday, Kaukonde refused to give details of his meeting with Mpofu over the issue.

“I think such questions can be referred to the Ministry of Transport, but all I know is that our contract expired and it is up to the company to re-apply,” Kaukonde said. “This is business; politics should not be part of it.”

However, sources familiar with the deal said there were political and business problems besetting the contract.

Mpofu is today expected to flex his muscles and float an aircraft leasing tender for the domestic and regional markets, which he has said is part of efforts to re-equip the airline under the flag carrier’s new growth strategy.

“We would want to ensure that there is no disruption in terms of service and therefore a decision has been taken to source aircrafts for operational leasing. We are therefore inviting applications from those firms who can supply the necessary equipment,” said Mpofu last week.

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