Civil Aviation Authority of Zimbabwe (CAAZ) hopes to retire its debts through government’s approved warehousing of legacy and shareholder loans scheme as the debt is slowing down the implementation of developmental programmes.
Cabinet in July approved the assumption of over US$1 billion worth of debts accumulated by some critical state enterprises and some public enterprises as part of accelerated efforts to make them attractive to potential suitors. While the assumption of parastatal debts would continue on a case by case basis, the option will enable CAAZ, among other entities, to create opportunities for the company to access fresh capital at reasonable rates by presenting an attractive balance sheet to the financial markets
Over the years CAAZ has been struggling with debts well over US$240 million.
Although CAAZ general manager David Chawota would not be drawn into saying how much debt the authority was currently sitting on, he said milestones reached in trying to retire the debt are largely hinging on the scheme currently underway.
“The government has approved warehousing of the legacy and shareholder loans. The process is currently underway, he said.
Chawota said the debt has led to the failure of the entity to attract lenders.
“Like any debt owed by an entity, the effects are unattractiveness to lenders, a situation that slows down implementation of development programmes, what is then negatively affected is destination attractiveness,” he added.
Meanwhile, Chawota said the entities’ capacity utilisation had however improved to 27% from 25% last year and the authority was working towards improving service delivery to attract business.
Last year, the authority saw capacity utilisation fall to 25% and this had a negative impact on the group, resulting in the operating loss of US$2,2 million.
“Capacity utilisation is currently at 27% and the Authority is engaged in infrastructure development and modernisation in order to improve service delivery and attract more business. The Authority is also undertaking routes development initiatives to attract more airlines into Zimbabwe,” he said.
While the on the other hand the entity has been also struggling with obsolete equipment, CAAZ is implementing a programme for the modernisation of airport infrastructure and systems as well as airspace management systems.
CAAZ has invested in excess of US$200 million on this programme to date. The programme started with JM Nkomo International Airport terminal upgrading then Victoria Falls International Airport upgrading.
“The authority is also currently pursuing loan facilities for the expansion and modernisation of Robert Gabriel Mugabe International Airport and airspace management systems modernisation,” he said.