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Dumisani Nsingo, Senior Business Reporter
THE Ministry of Transport and Infrastructural Development is set to carry out extensive investigations into contractual agreements entered by Government with various investors amid revelations the country might have been prejudiced of billions of dollars after hastily entering into arrangements without proper due-diligence.
Transport and Infrastructural Development Minister Dr Joram Gumbo told Sunday News Business that preliminary indications suggested that Government might have “gone to sleep” in most of the infrastructural development deals it has entered with private players especially foreign investors, a situation which has left or threatens to leave the country with sub-standard infrastructure at the end of tenure of the contracts.
“Most of the arrangements were entered into when I wasn’t the Minister and it’s very difficult for me to comment on them because those are things that were done when I wasn’t there and I can’t even tell if there was any due-diligence done. Even if you look at some of roads it’s clear that shoddy jobs were done.
“I will look into such issues and make sure that investigations are done to ascertain if we are benefiting from such agreements and seek to find out if they (investors) finish their tenure (whether) we will be left with proper roads and rail system…whether we are getting residue benefits from contracting these people,” he said.
Zimbabwe Building Contractors Association president Mr Obert Sibanda said the country might have been prejudiced of billions of US dollars through hurried contracts with foreign private firms due to lack of financial capacity to embark on massive infrastructural developments.
“I might not have the exact figures but quite a lot of these agreements have been prejudicing our country in a big way. A good example is the bridge in Beitbridge where I understand the company contracted managed to recoup their investment within five years but their tenure went on for 20 years until the official handover two years ago.
“We are very much opposed to these deals where our country is being siphoned. We therefore advocate for proper partnerships where there is a win-win situation. Of course we don’t have financial capacity as a country to embark on major infrastructural developments and as such Build-Operate-Transfer (BOT), Public-Private Partnerships (PPPs) and Joint Venture remain our only option…,” Mr Sibanda said.
He said the Government should come up with an inter-ministerial and private sector team, which would be tasked to scrutinise the benefits to be accrued by the country before and after completion of major infrastructural projects.
“There should be a team that involves a lot of people because we have entered into some of the contracts whereby it seems to be involving individuals thus in such cases there is a need for the private sector and an inter-ministerial team to be involved in due-diligence analysis,” Mr Sibanda said.
Bulawayo based economist Dr Bongani Ngwenya said most of the agreements entered into by Government with foreign investors tend to derail the country’s economic growth.
“Investment that is BOT is the kind of an arrangement which tends to benefit the investor more than the other part.
Under such a circumstance the motivation to conclude due-diligence is not there because the investor will come in and put the money and infrastructure and thereafter start recouping their investment in what we can term the raking period.
“Once that tenure ceases and they have recouped or made their returns in terms of profit they leave. In most of the times the contracts are negatively skewed in favour of the investor and in most instances they construct substandard structures, which will give you problems to maintain,” Dr Ngwenya said.
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