HomeLocal NewsZinara seeks US$250m for project

Zinara seeks US$250m for project

THE Zimbabwe National Road Authority (Zinara) will float US$250 million worth of infrastructure bonds to mobilise funds for upgrading the Harare-Masvingo-Beitbridge highway. This comes after government terminated a contract that had been awarded to Chinese contractor Anhui Foreign Economic Construction Group Limited (Afecc) to roll out the US$1,2 billion project.

By Nyasha Chingono

Afecc, the second highest bidder when the tender was first publicised in 2016, was awarded the tender to dualise the Beitbridge-Harare-Chirundu highway after government terminated its earlier agreement with Austrian company Geiger International in April this year.

Geiger’s contract was terminated when the company allegedly failed to provide proof of funding nearly two years after being awarded the contract.

The deal with Afecc has, however, gone off the rails after the company expressed concern over how it would recoup its investment.

Afecc’s financiers expressed concern with the build, operate and transfer arrangement, which they deemed unfeasible. Government, on its part, failed to convince the company on how it would realise the full benefits of the investment.

Government officials told the Independent that Afecc committed to do only the 133km stretch from Harare to Chivhu under the BOT plan, resulting in government looking for funds to start the project while negotiations continue.
According to the 2019 Ministry of Finance, Infrastructure Investment Plan, US$300 million will be disbursed to the project, comprising of US$50 million in fiscal resources and US$250 million proceeds raised through a Zinara infrastructure bond.

The ministry said the position was taken after government failed to upgrade the road network through the Public-Private Partnership (PPPs) agreement due to funding and contractual disagreements with foreign companies.
“In this regard, government has since reviewed the delivery model, with local resources also targeted to be used to undertake highway upgrade works, leveraging on Zinara cash flows. Doing so would allow for timeous implementation of the project in a cost effective manner, and in consistent with the objective of maximising the use of local content,” reads the infrastructure investment plan.

The roadworks consist of phased dualisation, rehabilitation, and widening of the existing road from current seven metres width to Southern Africa Transport and Communications Commission standards of 12,5 metres width.

Government is also planning dualisation to address traffic build up around major cities and towns along the Harare-Beitbridge highway. Dualisation of at least 10km towards major cities will be undertaken by local contractors with Transport minister Joel Biggie Matiza saying government would priorities local contractors while negotiating another deal with Afecc.

According to the infrastructure plan, the implementation timeframe will be shortened by segmenting the road and works through a competitive tendering process.

To augment the bond, the Japanese government will also disburse US$6,3 million to upgrade the Makuti-Hellsgate section of the Harare-Chirundu highway.

The Harare-Beitbridge highway is part of the North-South Corridor linking the south-eastern port of Durban in South Africa, to other Sadc and Comesa member states to the North, facilitating trade with the region and Africa. The increase in traffic volumes, coupled with the poor state of the road, has resulted in congestion, increased accidents and loss of lives and property.

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