THE City of Harare tried to set up a tollgate on a highway linking its central business district (CBD) with Robert Gabriel Mugabe International Airport for paying a firm that had clinched a deal to revamp the busy artery in 2008, according to property tycoon, Ken Sharpe.
A tollgate on the highway would mean international visitors arriving at the airport would immediately be hit by a toll fee within their first 20km in Harare.
Commuters between Harare’s CBD and the airport would also be compelled to fork out hefty fees daily.
The transaction was inked as Zimbabwe battled hyperinflation estimated at 500 billion percent in December 2008, after the city agreed to form a joint venture with Sharpe for the development.
About a decade ago, former Transport and Communications minister Obert Mpofu toyed with the idea of establishing tollgates within Harare’s roads.
But his ambition hit brick walls after being resisted on all fronts, including in parliament.
Sharpe, the chief executive officer of West Property, one of the country’s biggest real estate firms, controlled Augur Investments, which was awarded the Airport Road contract.
The deal would later be terminated in 2013 after Augur moved off site due to concerns over payment.
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Sharpe, who spoke exclusively to businessdigest last week, claimed that the cancellation was “unilateral”. He said it was also at variance with Augur’s agreement with Harare.
The airport highway deal still makes headlines in Zimbabwe a decade after it was inked, as citizens try to understand if the country got value for money.
“The city didn’t have theodolites for surveying,” Sharpe told businessdigest. “We bought them the equipment. They didn’t have computers and we bought them. They didn’t have fuel for ambulances. We gave them a lot of fuel, about 30 000 litres. I remember helping the city a lot.”
The tycoon said at that point, Harare became confident and proposed that he take on the much bigger highway deal.
“They came to us and said you have the resources,” Sharpe said. “We don't have access to foreign currency. Can you do another project as part of the joint venture? That is when we were invited to build the airport highway. Initially, they said it was a US$6 million or US$7 million contract. We looked at it and we said fine, we have got the money. But how will we get the money back?
“Initially, the idea was to link it to a toll road, collect toll fees in the joint venture. But they discovered they couldn’t do it because it is a national highway. National highways have to be owned by the Ministry of Transport and Infrastructural Development. The Minister of Transport got involved. We went to meet him, and we met the Minister of Local Government.
“Eventually, we formulated a plan that if we built this road, they would pay us with land. It was a barter arrangement. We signed a MoA (memorandum of agreement) and then went to present the plans to the President (the late Robert Mugabe). The President said ‘we don't want to extend this road. We need a proper highway’. We went back to the drawing board. We came up with a number, US$82 million. More than half of the value of the contract was bridges. And the bridges have not even been built.”
Sharpe said as the project kicked off, he and his team were still asking how Harare would pay.
Harare then suggested it would allocate land banks to the multimillionaire.
“We started building the road and all along we were saying how are you going to pay us? They showed us some land, but it was not zoned. The change of use hadn't been done in some cases and in some cases, there were contentious issues of wetlands on the land. For example, at Borrowdale Millennium Heights, in Millennium Park. But we took the risk and started building the road. We eventually spent about US$20 million on it. It took a long time. After spending US$20 million, we still had almost just enough land to cover half of the contract so we knew we couldn't go beyond because we wouldn't get paid,” Sharpe said.
He said it was at that point that Harare “unilaterally” cancelled the transaction.
“They unilaterally cancelled the agreement. In terms of the contract, they should have given us a period to remedy if there were some concerns. They just cancelled outright and said get off and they took it over as Zinara and they finished that section of the road we were doing. But they didn't complete the bridges. More than half of the road hasn't been done. We took them to court. We won at arbitration. We then went to High Court and then went to Supreme Court but eventually, we settled with them out of court.
“Since then, we have got our zoning, our permits have been issued and we are building and constructing. The airport deal that was a barter deal 100%. We got paid land for the work we did. For all the work we did, there was a certified payment, interim payments certificate that would be called an IPC which is basically measuring the works and saying this is the amount of work in dollars,” Sharpe said.
“Then, we would equate that in land and they would give us the land. At the end of that process, we owned a whole chunk of land. Whilst that was going on, we also had the PPP (public private partnership), which is Sunshine Developments and in that PPP we had three pieces of land,” he added.