Online Reporter
Vusumuzi Dube, Deputy Radar Editor
TENDY Three Investments (TTI) has proposed securing a US$5 million loan facility to finance the repair of parking bays in Bulawayo, to enable full coverage of all bays under the city’s parking management project, with repayment expected to be covered through the City of Bulawayo’s share of revenue over a three-year period.
This will further see the contract between the Bulawayo City Council (BCC) and TTI being extended by a further four years, from the initial end period of 2027, for the parking management system company to fully recoup their investment in the city.
According to details of the proposal, the loan would be structured in a way that allows TTI to recover the funds through proceeds generated from parking fees, particularly the 30 percent remittance meant for BCC.
The key upgrades are to ensure that the local authority’s parking management system partner is able to fully implement the system in the Central Business District amid revelations that four years since the project was launched, there are 5 835 bays available against a potential 10 670 bays, leaving 45.3 percent of parking bays unmanaged.
“At the signing of the Parking Management contract between the City of Bulawayo and Tendy Three Investments, a key precedent condition required the city to provide 7 200 prepared parking bays within the project area. However, when the project commenced on 18 February 2022, fewer than 1 000 bays were available.
“Four years later, the requirement had remained unmet, with 5 835 bays currently available against a potential 10 670 bays, leaving 45,3 percent of parking bays unmanaged. This limited coverage contributed to congestion in unmanaged areas, reduced potential revenue and delayed the counterparty’s ability to recoup its investment,” reads the latest council report.
The local authority revealed that due to funding constraints and delayed maintenance, they had struggled to prepare the outstanding bays.
Consequently, TTI had submitted a proposal offering to undertake the rehabilitation of outstanding parking bays and associated CBD road infrastructure, with the parking management systems company intending to engage a reputable roadworks contractor, to implement the works.
“The rehabilitation programme would be implemented in three phases over approximately eight months. The project cost had been estimated to be US$8,5 million.
“The works would include rehabilitation of parking bays and carriageway sections of the CBD road network to improve accessibility, road conditions and parking management efficiency,” reads the report.
According to the report, extensive consultations had been conducted with TTI and financial institutions, on the possibility of funding the intended works.
TTI indicated that a credit guarantee from the City would play a crucial role in unlocking favourable financing terms from lenders.
“The City had already ring-fenced US$1.4 million and ZiG 8 million from parking revenue for road rehabilitation works. To cover the costs, TTI had proposed to secure a loan facility of US$5 million, to be repaid through the City’s revenue share from the parking management project over a three year period. A City credit guarantee would assist
TTI in securing favourable financing terms,” reads the report.
To facilitate implementation of the project, the local authority revealed that there would be need for the contract between BCC and TTI to be amended to transfer the responsibility for parking bay preparation to TTI.
“There will also be the need to extend the current parking management contract by four years to allow the counterparty sufficient time to recover its investment and return on investment and also the need to develop a comprehensive financial model outlining projected revenues and loan repayment mechanisms.
“There will be a need to provide a City credit guarantee to strengthen TTI’s ability to secure external financing and the Department of Works should approve and oversee the detailed programme of works, including monitoring quality and progress,” reads the report.
The proposed arrangement is expected to support enhancements to the city’s parking infrastructure and management systems, which have been central to efforts to improve traffic flow and revenue collection within Bulawayo’s central business district.
The TTI contract with BCC for the parking management system is a six-year Build, Operate, and Transfer (BOT) agreement, running from September 2021 to 2027. The deal includes an option for a four-year extension, bringing the total potential duration to ten years.
