HomeBusiness DigestZinara approves plan to borrow US$100 million

Zinara approves plan to borrow US$100 million

STATE road fund administrator Zinara has approved plans to borrow up to US$100 million from local banks to replenish the country’s road network that has been affected by heavy rains, businessdigest has learnt.

By Taurai Mangudhla

Shareholders approved the decision at an annual general meeting held in Harare last week, board chair Albert Mugabe said.

“We got authorisation to borrow and we are pursuing that soon. In fact, we had anticipated the authorisation and had already begun preparatory work for the borrowing and soon we will be getting into the local market to source funds,” Mugabe said.

“We are looking to borrow anything from US$50 million up to US$100 million. The purpose of which is specifically to attend to the road network in light of the unprecedented collapse due to heavy rains which we received,” added Mugabe.

He said a comprehensive list of areas which need immediate attention had already been drawn up and would be used to guide resource allocation.

The borrowing initiatives are likely to be dampened by the prevailing high costs of funding on the local market. The Zinara board and management also took the opportunity to report to government on the state of roads and disbursement of funds.

Mugabe said his board had reported a significant improvement in utilisation of the road fund across the country.
“Issues of abuse of funds has steeply declined,” said Mugabe.

“Apart from that, we resolved to adhere to our approved budgets. We basically collect money and then disburse according to some budget. Some things have come up in the past and we had the issue of priorities to the extent we have sometimes exceeded budgets, but we are now saying let’s adhere to our budgets,” said Mugabe.

The decision comes as Zimbabwe’s roads have been left in a deplorable state by heavy rains. Bridges have been swept away by floods while major roads and highways are littered with potholes, posing a risk to motorists.

To address the situation, government disbursed about US$45 million in late January towards the rehabilitation of roads in eight provinces following a public outcry over the poor state of the country’s road network.

According to Department of Roads’ documents at hand, titled All Roads Projects for 2017, the latest disbursements, which left out Harare and Bulawayo, came after Transport minister Jorum Gumbo concluded a 12-day nationwide tour, which focussed on rural roads.

At the time, sources indicated Gumbo and his Local Government counterpart Saviour Kasukuwere agreed a plan that could see US$18 million being disbursed across nine provinces for the rehabilitation of trunk roads. Zinara collects around US$130 million annually from road access fees, vehicle licensing fees, transit fees and fuel levy, among other revenue streams, for routine maintenance of roads.

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