Zimbabwe Agrees to $2.7 Billion Deal to Renew Busiest Road

Zimbabwe has agreed to a $2.7 billion deal with companies from Austria and China to upgrade the country’s busiest road linking South Africa with countries to the north.

Source: Zimbabwe Agrees to $2.7 Billion Deal to Renew Busiest Road – Bloomberg August 22, 2016

Zimbabwe has agreed to a $2.7 billion deal with companies from Austria and China to upgrade the country’s busiest road linking South Africa with countries to the north.

The contract was agreed with closely held Geiger International of Austria and state-owned China Harbour Engineering Company Ltd., Transport Minister Joram Gumbo told reporters in capital, Harare, on Monday. The companies will operate a 20-year concession for the stretch of road from Beitbridge on the southern border to Harare, while the renewal of the northern section to Chirundu will be funded with loans from the private sector, he said.

The highway has fallen into a state of disrepair as heavy-duty trucks use it to transport everything from corn to mining and power-plant equipment from South Africa to other parts of the continent. The renewal of the Plumtree-Mutare road that runs from Zimbabwe’s western to eastern borders was completed at a cost of about $3 billion last year by South Africa’s Group Five Ltd.

Zimbabwe’s economy, suffering its worst economic crisis since 2008, has left the government unable to pay civil servants’ wages on time and delayed payment to troops, with 83 percent of revenues collected going to salary payments. The southern African country missed its own deadline to repay $1.8 billion to the International Monetary Fund, the World Bank and African Development Bank by June 30.

COMMENTS

WORDPRESS: 4
  • comment-avatar
    mandevu 6 years ago

    woohoo another toll road. More corrupt police

  • comment-avatar
    Fallenz 6 years ago

    “Concession/Toll” roads are a mixed blessing.

    With them, those using the roads, for commerce or other purposes, are the ones who pay for the construction through toll payments, rather than all taxpayers, some of whom might never set foot (wheel) on the road. Commercial users will likely recoup that toll cost by increasing the cost of their services or goods.

    On the other hand, all citizens benefit in varying degrees by commerce being made easier, and the increase in efficiency and productivity and reducing the overhead costs involved (better fuel mileage, fewer vehicle repairs, longer lasting tyres). In fact, those reduced expenses might be the difference between a company continuing in business or closing its doors… which can have far-reaching effects, including a possible reduction of competition which could raise the cost of transported goods or services, and loss of jobs.

    So, a mixture of public and private funds for both construction and maintenance is the most equitable and viable method of finance roads… except Zim has no public funds. Those were all stolen by ZANU-PF.

    Here’s a major consideration: if the funding of the road is paid only by the concessionaires, and maintenance paid only by the taxpayers, the concessionaires will build the roadway as cheaply as possible. The road base will not be sufficiently compacted, and the surface materials will be less durable, and the construction methods sub-standard. That reduces the useable lifespan of the highway, decreases the time until maintenance projects must be mounted, and greatly increases the scope of those projects… and all the while, the tolls continue, and likely increase.

    The devil is in the details. So, the question is who is going to have competent oversight of the design, engineering, and construction phases? Probably some ZANU-PF-connected official or company. What does that tell you? More free money for the crooks.

  • comment-avatar

    Beitbridge to Chirundu is 583 Km. At 2.7 billion, that works out to about 4.6 million dollars a kilometer, to upgrade a road that already exits with some oversimplification of the costs, since this will include adding more tollgates and other structures.

    All the same it would be interesting to find out, as a rough comparison, how much the RSA spends per kilometer, or spent on upgrading their Jo burg-Pretoria road for the soccer World Cup, for example. Anyone out there with figures…? Is this relatively cheap? Expensive?

  • comment-avatar
    C Frizell 6 years ago

    Asking intelligent questions is strictly forbidden in Zimbabwe!