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Zinara to save US$500k after re-negotiating contracts

22 Jul, 2021 - 00:07 0 Views
Zinara to save US$500k after re-negotiating contracts

The Chronicle

Harare Bureau
The Zimbabwe National Road Administration (Zinara) is set to make savings of over US$500 000 per year after it successfully renegotiated its US$206 million DBSA loan and the Intertoll operations and maintenance agreement signed in 2011.

This is in line with the thrust of Zinara’s new board and the executive to ensure the road fund manager contributes meaningfully to National Development Strategy 1 (NDS1) and Vision 2030 as enunciated by President Mnangagwa.

In an interview yesterday, Zinara finance director Mr Adam Zvandasara, confirmed the re-negotiation of the two contracts saying this would go a long way in ensuring timely disbursements to road authorities and funding of other road related projects such as the Emergency Road Rehabilitation Programme2.

“In line with the new board and management’s focus on steering the road fund back to its mandate of fixing road user fees, collecting them and disbursing them to road authorities, Zinara for last 12 months, has been focusing on short, medium- and long-term reduction of fund management costs to increase the level of disbursements to road authorities,” said Mr Zvandasara.

“In this endeavour, we have successfully re-negotiated with Intertoll Zimbabwe of their agency collection and management commission from 21 percent to 15 percent of cost. This will result in an average monthly saving of $3million and $36 million annually.”

Explaining the contract between Zinara and Intertoll Zimbabwe, Mr Zvandasara said: “The operations and maintenance agreement with Intertoll Zimbabwe was signed between Zinara and Intertoll Zimbabwe in August 2011, and the contract expires in 2031. Infralink, a special purpose vehicle of Zinara, houses the DBSA US$206 million loan, and oversees the operations and maintenance agreement, on behalf of Zinara (and the Ministry of Transport and Infrastructure Development).

“It is important to note that the Plumtree Harare Mutare Highway reconstruction project was not a Build Operate and Transfer with Group 5 as commonly reported. The ownership of the highway has always been with the Ministry of Transport and Infrastructural Development.

Group 5, as the contractor, was brought into Infralink, the SPV, as a 30 percent shareholder to bring in technical expertise into the Special Purpose Vehicle.”

Mr Zvandasara said it was important for the public to note that with regards to the published sale of one of the Group 5 subsidiaries, Intertoll Zimbabwe, to a South African entity, Zinara did not and does not have rights, from the Shareholder Agreement with Group 5 at Infralink, nor from the operations and maintenance agreement with Intertoll Zimbabwe, to purchase any equity in Group 5, or in any of the Group 5 subsidiaries.

Said Mr Zvandasara: “Instead, the Shareholder Agreement at Infralink gives Zinara the right to purchase the 30 percent equity that Group 5 has in Infralink. Following an offer, per the agreement, the right has been followed through, and the transfer transaction will be concluded before end of the year, for Zinara to have 100 percent shareholding in Infralink and this will allow Infralink to have total control and influence in the way the Plumtree Harare Mutare route is managed.

In addition, Mr Zvandasara said “the Re-negotiation of the DBSA US$206m Plumtree Harare Mutare Road Rehabilitation Project was also successfully concluded.

This will result in interest cost reduction from 6,182 percent to 5 percent, awarded over a 36 month period. Resultant cost savings in the first year are expected to be around US$480 000, and increases to around US$1,2 million and US$1,8 million in second and third year respectively”

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