HomeLocal NewsGovt to pay Malaysia extra us$9m for AirZIM planes

Govt to pay Malaysia extra us$9m for AirZIM planes

Nyasha Chingono

THE Zimbabwean government is due to pay an extra US$9,3 million as costs for the de-preservation of two B777 aircraft bought from Malaysia in 2017, one of which was delivered in Harare after being stationed in the Asian nation for close to two years, the Zimbabwe Independent can report.

The planes are part of the botched US$70 million Zimbabwe Airways deal signed between the controversial airline and the Malaysian authorities.
The Malaysians also slapped government with a US$5 million parking fee bill for the two planes for the time they were stationary. The parking fees were later set aside after negotiations.

The Independent understands that while the plane was parked in Malaysia, Zimbabwe was charged US$250 parking fees daily, a figure that ballooned to US$5 million as at September 4, 2019. Despite being given a full waiver for the US$5 million in parking fees, it took government another four months to bring the plane home.

“A major hurdle faced was on accrued parking charges amounting to US$5 million. However, the parking charges were successfully negotiated and a full waiver was granted on the September,4 2019,” AirZim assistant administrator Tonderai Mukubvu said.

“The aircraft were under preservation maintenance in Malaysia from the time of purchase. The costs of de-preservation of the two B777 aircraft are within standard B777 de-preservation.”

De-preservation is a process involving the clean-up and inspection of an aircraft part when it is to be put into service after it has been prepared for storage. The two long-haul planes were purchased for US$18,5 million each, according to AirZim.

Malaysian Airlines decommissioned the 777s following the disappearance of two similar planes in 2014, including MH370.Government this week took delivery of a B777 200ER for the second time since its initial delivery in April, 2018.

It has taken government close to two years to deliver the 15-year-old aircraft, following disputes with the Malaysian authorities over payment and regulatory issues.

As previously extensively reported by the Independent, the Malaysian authorities at one time threatened legal action for breach of contract when Zimbabwe chose to buy two planes instead of the initially agreed four long-haul jets. The disagreement prompted a visit by Transport minister Joel Biggie Matiza to negotiate with the Malaysians.

The B777 Z-NBE, which is due for delivery in three weeks, according to Mukubvu, is still undergoing mandatory checks to bring it to serviceability, before its release from maintenance.

“Z-RGM has a Certificate of Airworthiness and is serviceable. Z-NBE is still undergoing mandatory checks in preparation for its release from maintenance and ferry to Harare,” Mukubvu said.

Matiza confirmed that government was facing acute financial problems to take delivery of the plane.“Financial issues were some of the major challenges we faced. You know once an aeroplane is seated it is expensive, it needs to be maintained. Parts also expire. Zimbabwe is currently facing forex problems. So these are some of the challenges we faced but I am glad we managed to get through,” Matiza said.

“We needed to make sure that we have got the processes right to bring it back and money. There was a lot of money that needed to be paid, parking fees, maintenance, it’s very expensive.”

The planes were purchased by ZimAirways where former President Robert Mugabe’s son in-law Simba Chikore was the chief executive. Chikore and former Transport minister Jorum Gumbo were involved in the transaction. Due to mismanagement and looting, Zimbabwe’s sole airline currently has one aircraft compared to 18 planes at Independence.

Last year, government took delivery of an Embraer ERJ145, but is yet to get clearance from the manufacturer almost a year after its purchase.
Government has since engaged Embraer over delays in releasing crucial operating manuals and is currently making steps towards satisfying the Know Your Customer (KYC) process.

“Engagement with Embraer are ongoing with regards their KYC process. Their latest update on this matter indicated that there has been significant progress and majority of the hurdles have been addressed. We anticipate to have completed the process within the first half of 2020. Upon completion of the KYC process, all other compliance submissions will be made to CAAZ [Civil Aviation Authority of Zimbabwe] for approval to allow immediate deployment of the aircraft into service,” Mukubvu said.

The struggling AirZim has failed to attract an investor, months after government invited bids from potential suitors to partner the embattled entity.

The government has failed to regularise AirZim’s US$381 million debt assumption plan, weakening the airline’s chances of courting new partners.

The airline attracted 10 potential investors this year, but they have been spooked by the company’s legacy debts.

AirZim was in 2018 placed under reconstruction after creditors threatened to sue the state-owned airline. Before the company was placed under reconstruction, creditors, including former employees, other airlines, insurance companies and service providers had been pushing for legal action against the airline.

Reconstruction cushions the troubled airline from litigation by creditors seeking to attach property. AirZim has in the past indicated that its defunct aircraft will be auctioned to service part of the debt.

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