AirZim requires $1,08bn cash injection: Mpofu

via AirZim requires $1,08bn cash injection: Mpofu – NewsDay Zimbabwe May 19, 2015 by Veneranda Langa

Air Zimbabwe requires a $1,08 billion cash injection to turn around its fortunes and replenish its depleted fleet which currently stands at a paltry five planes plying local and regional routes, Transport minister Obert Mpofu has said.

Mpofu told Parliament’s Transport Committee that the national airline’s turnaround strategy now hinged on finding a strategic partner, adding government should inherit the parastatal’s $282 million debt to enable the strategic partner to start on a clean slate.

“Air Zimbabwe is loss making and is generating $2,65 million per month against expenditure of $5,9 million per month and owes $282 million to both local and foreign creditors emanating from navigation handling fees, fuel supplies, landing fees and others,” Mpofu said.

“For the period 2011-2012, Air Zimbabwe had virtually ceased operating, and the airline had been overstaffed with a $1,2 million wage bill per month and constraints in its efforts to raise retrenchment salary obligations with 760 staff, 526 of which are active and 234 to be retrenched and 40 apprentices,” Mpofu said.

He said for the airline to be resuscitated, it required three small jets, two Boeing 737-500s and two Boeing 787 estimated at $770 million.

“The $282 million debt implies that government should inject $1,08 billion from the fiscus, which it does not have and can only rely on investors,” he said.

He said in line with a Cabinet resolution, the ministry had prepared a list of strategic partners for Air Zimbabwe and had a big future to the extent it could go back to what it used to be.

On the National Railways of Zimbabwe (NRZ), Mpofu said the biggest challenge was generating revenue to pay salaries for more than 6 500 employees as business had decreased significantly.

He said the number of locomotives had dwindled from 101 in 2000 to 80 in 2006, while wagons declined from 9 019 in 2000 to 5 824 in 2006, adding the NRZ’s locomotives had outlived their lifespan.

“Challenges include that efforts in resuscitating NRZ have not been enough to achieve viability, revenue generated is not enough to pay salaries as the staff overturn of 6 500 is too high for current business volumes. Creditors stand at $208,8 million, while NRZ debts are $10,5 million.”

He said salary arrears now stood at $65,5 million, adding the NRZ’s turnaround strategy centred on the need to address poor infrastructure and equipment.