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One of the excavators bought by Hwange Colliery Company Limited six months ago

Business Reporters—
THE government is not happy with continued failure to increase coal production at Hwange Colliery Company Limited (HCCL) despite acquisition of $31.2 million equipment six months ago. The machinery was sourced through a vendor-financed facility through the $18.2 million PTA BELAZ facility and the India Exim Bank’s $13,03 million BEML facility. Vice President Phelekezela Mphoko officially commissioned the new equipment in Hwange on June 19 this year.

The equipment comprised 10 dump trucks, five front-end loaders and two wheel dozers from BELAZ while two excavators, two water bowsers, three front-end loaders, three bulldozers, three drill rigs, a motor grader and one tyre handler were supplied by BEML. Finance Minister Patrick Chinamasa was very critical of HCCL performance when he presented the 2016 national budget statement in Parliament last Thursday.

He expressed the major shareholder’s concern despite all the support rendered to the giant parastatal this year, “no noticeable growth” in coal production has been realised. “All the above support is over and above the government conversion of $80 million Hwange Colliery debt into equity . . . but there’s no noticeable change at HCCL.

“The purchase of new equipment was expected to increase coal production supplies to local industry,” said Minister Chinamasa. “Management should urgently address this situation. Clearly, we can’t grow our economy if our corporate management structures at both public and private entities are allowed to persist, demonstrate inefficiency and unaccountability over use of scarce resources.”

Hwange Colliery widened losses to $16 million in the first six months to June this year compared to $7.9 million in the same period last year. Its coal and coke sales for the period dropped 10 percent to 685,759 tonnes from 764,813 tonnes.

Recently a Parliamentary Portfolio Committee on mining and energy revealed that HCCL was struggling to supply coal to the nearby Hwange Power Station, contributing to low electricity generation levels.

It was hoped that the new machinery, together with the work of a contractor — Mota Engil — would see output totalling a minimum of 450,000 tonnes per month. Mota Engil was engaged last year to produce 200,000 tonnes of coal monthly and it began open cast mining in August.

HCCL managing director, Thomas Makore, could not be reached on his mobile phone for comment yesterday. Since 2006 Hwange Colliery has been battling a legacy debt of more than $100 million with workers owed millions of dollars.

Minister Chinamasa reiterated the need to expedite public enterprises’ reform as it had been noted that the entities were a source of fiscal leakages due to their continuous loss making and over-reliance on government grants and subsidies. Against this background, the government identified and prioritised 10 public entities for initial reform.

These include the National Railways of Zimbabwe, Air Zimbabwe, Cold Storage Company, TelOne, Civil Aviation Authority of Zimbabwe and Agribank.

“State owned enterprises, which have long been identified as a source of fiscal leakages due to their continuous loss making and over-reliance on government grants and subsidies are being comprehensively restructured, so as to reduce costs to the fiscus, enhance service delivery and improve accountability,” said Minister Chinamasa.

“Currently, auditors have been engaged to carry out forensic audits into the operations of the Grain Marketing Board and the Cold Storage Company.” He said the audits would enable the government to make informed restructuring policy decisions. “To this end, the government is putting in place turnaround strategies for a number of parastatals,” he said.The country has about 78 State enterprises and parastatals.