Beitbridge road dualisation in limbo

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GOVERNMENT could abandon the controversial US$2,7 billion deal with Chinese firm Anhui Foreign Economic Construction Group Limited (Afecc) for the dualisation of the Chirundu-Beitbridge highway after the company expressed concern over how it would recoup its investment, the Zimbabwe Independent can exclusively reveal.

BY ANDREW KUNAMBURA

Afecc, the second highest bidder when the tender was first publicised in 2016, was later awarded the contract after government in April this year terminated its earlier agreement with Austrian company Geiger International (Geiger) at Vice-President Constantino Chiwenga’s behest.

Government had expressed frustration at the endless delays in project implementation by Geiger, although it later emerged that the move was aimed at pacifying the Chinese government and Afecc after it was controversially stopped from mining diamonds in Chiadzwa two years ago.

The deal has, however, gone off the rails after Afecc financiers insisted they were not comfortable with the build, operate and transfer (BOT) arrangement, which they deemed to be unfeasible. Government, on its part, failed to convince the company on how it would realise the full benefits of the investment.

As such, the Independent has learnt, Afecc told government that it could only do the 133km stretch from Harare to Chivhu under the BOT plan.

Former Transport minister Joram Gumbo, who has been spearheading negotiations on behalf of government, confirmed the deal had run into problems.

“It may be that they are having difficulties with their financiers. Remember, it has been two years since they lost the tender and they could have put their money to other use. I think that is the major problem they are facing, but as government we had prepared a framework of agreement to guide us on the way forward,” Gumbo said.

He also said the document was ready to be presented to cabinet.

“If I get the chance to present it to cabinet, I will do so but, if not, someone else will do it,” Gumbo said.
Insiders said government is now considering raising funds through the Zimbabwe National Roads Administration (Zinara) to allow local companies to take over the project.

Government is also considering re-tendering the project.

This comes as it emerged that Afecc president Jiang Zhaoyao last week flew into Zimbabwe from his base in Hefei city, the capital of Anhui province of China, to try and salvage the deal, but there has been no headway.

Highly placed government and diplomatic sources told the Independent this week that the deal with Afecc had virtually collapsed after the Chinese firm indicated that it was only able to dualise the 133km stretch from Harare to Chivhu.

Government sources said meetings held between government and Afecc in the past two weeks could not produce results.

This is despite the fact that the Ministry of Transport and Infrastructural Development had already drafted a framework of agreement which was to be signed between the two parties.

However, Afecc could not commit itself to the agreement as it demanded full disclosure of how it would recoup its investment amid concerns government was not providing clear information. An official close to Afecc said the company had access to adequate funding. He said the decision of whether to award the tender to Afecc or not lies with the government.

“The Afecc boss was here now in Zimbabwe having discussions with the government but, so far, there is no deal. No decision has been made up to now,” the official said.

2 thoughts on “Beitbridge road dualisation in limbo”

  1. Zain says:

    Limbo is a wrong term. That project hasnt started at all. i was in beitbridge over the past weekend.

  2. Gwinaldo says:

    The biggest problem for an investor who brings in foreign currency into the country is how they will get their foreign currency out, considering that they would have borrowed externally, yet revenue will be generated through tollgates, in local currency. It is a difficult guarantee for government to make, in the face of crippling foreign currency shortages.

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