Non-performing parastatals warned

Source: Non-performing parastatals warned | The Herald March 15, 2019

Non-performing parastatals warnedPresident Mnangagwa

Africa Moyo recently in BEITBRIDGE
President Mnangagwa has warned parastatals that continue to under-perform despite Government support saying days of perennial poor performances and failure to complete projects they would have embarked on are over. The President said this in Beitbridge on Wednesday during the commissioning of the National Backbone Fibre Link, which connects the country with the rest of the world through South Africa.

His remarks come on the back of TelOne having accounted for every cent of the funds used under the US$98 million National Broadband Project (NBB) kitty.

The funds were availed by the China Eximbank as part of the mega deals signed by President Mnangagwa during his five-day State visit to the Asian country last year.

“I commend TelOne for the prudent manner they utilised the financial resources for this Government initiated and guaranteed project,” said President Mnangagwa.

“I urge all public entities to take a leaf from this good example and instil a culture of good stewardship, hard honest work, accountability and transparency in the implementation of national projects. The days of incomplete projects and non-payment of loans are over.”

TelOne was assisted by Government to get the US$98 million loan, with its sister company NetOne, being the guarantor.

TelOne managing director Chipo Mutasa said of the US$98 million, a total of US$23,6 million was used on the National Backbone Fibre Link while the rest of the funds went to  the establishment of Data Centres in Harare, Bulawayo and Mazowe as well as upgrading of the entire voice/ broadband systems and some access systems, including fibre to the home.

Parastatals have become notorious for failing to deliver, with management paying themselves fatty cheques despite the abject performance of the firms.

Perennially, parastatals look to Government support, with the funds usually looted immediately after being received, which has prompted Treasury to call for the firms’ reforms.

In 2016, 30 out of 93 State owned Enterprises that were audited recorded a staggering loss of $270 million due to weak corporate governance systems and ineffective control mechanisms.

Zimbabwe has 107 parastatals. Plans are now afoot to reform 41 parastatals and state companies to ensure they return to profitability and relieve central Government of the burden of financing them annually.

The reform agenda includes full and partial privatisation of some firms, listing on the Zimbabwe Stock Exchange, re-bundling and “killing” those that have no hope of recovery.

TelOne is one of the companies earmarked for reform.

Meanwhile, TelOne’s National Backbone Fibre Link project was implemented by Huawei Technologies of China together with the parastatal’s team of engineers.

The project was done in record time of 18 months. Some of the sub-contractors who worked on the project include Best Group, RH Engineering and Pachedu.

Upstream internet bandwidth service providers through whom the connectivity to the rest of the world was facilitated include the West Indian Ocean Cable Company (WIOCC), Telkom of South Africa and TDM Mozambique for provision of back-haul services and Orange France.