via Fears new $18m Hwange loan may be looted | SW Radio Africa by Mthulisi Mathuthu on Tuesday, May 27, 2014
The MDC-T Shadow Minister for Energy, Abednico Bhebhe, has dismissed the new $18 million loan for Hwange Colliery saying the fund is a ‘fertile ground for looting’ by executives and politicians.
Bhebhe was reacting to reports which said the troubled parastatal had secured the loan from the regional PTA Bank to recapitalize its operations. The Herald claimed that the fund is a ‘timely boost’ and is expected to ‘reinvigorate’ the struggling coal mining firm.
Board Chairman Farai Mutamangira said the fund will be used to purchase equipment from the Eastern European country of Belarus and that negotiations with the supplier were at an advanced stage, with the order expected in Zimbabwe shortly.
The new loan comes at a time when the company requires $150m to boost its operations and when it owes its employees $19m with the government not willing to adopt the debt. The company is also struggling to repay a $20m loan borrowed from the ABC bank a couple of years ago.
Hwange Colliery has more than 3,000 employees and yet it operates below capacity, producing only 200,000 tonnes of coal annually against a target of 450,000. Last week government blocked a board proposal to retrench half the company staff.
Bhebhe said unless Hwange Colliery privatizes he does not see the fading coal mining giant reviving itself. He said: ‘The Colliery’s fundamental problem is that it is a parastatal and as such its operations are heavily controlled across the board, from day to day operations right up to pricing. As a result they have not been able to replace the equipment which would have helped them to operate competitively.’
The MDC-T MP for Nkayi South said it does not make sense for the company to borrow more money when they are struggling to repay the ABC loan. He said: ‘Common sense will tell you that when a company borrows more money when they are failing to repay what they owe, what it means that the new loan will be pilfered by the executives.’
Bhebhe said claims by the board that the new loan will be used to revive the ailing coal giant should be taken with a pinch of salt because such claims were made about the previous loan. He said instead of that loan being used to revive the company part of it was looted while the other was used to purchase substandard equipment which failed to function.
Hwange Colliery is the country’s largest coal producer with its main component, Hwange Power Station, being one of the major contributors to the national grid.
COMMENTS
No doubt if anyone is stupid enough to loan, or rather GIVE them the funds, the first priority will be to buy a fleet of luxury 4×4 vehicles.
Exactly!
May be looted? That is a dead ringer!!
If there was a degree in looting a lot of our politicians would have Ph.D’s. ZANU PF has perfected the art of looting from the same country the claim to love so much.It’s pathetic!
Zimbabwe politicians are the Einsteins of the world when it comes to looting.
Belarus? This country is a soviet era antique. They manufacture nothing that anybody wants. Why on earth would we import equipment from there?
One thing is for sure. The lender will not get their money back. If you lend to a ZANU company and lose all your money, good. Supporting murderers should not be profitable.
Agree ,John, that country is a mafia institution and none of the neighbors like it. You can never get into any deals with them and come out with anything. Of the breakaway brigade ,its the poorest and the list democratic.
Zimbabwe’s despotic regime dealing bulkan despots.
Money down the drain.
what a stupid article about Hwange Colliery !
Firstly Hwange is a public company with several thousand shareholders of which the ZW govt is the major shareholder with about 37%. it is not a parastatal.
Hwange power station is NOT a component of the colliery. The power station is owned by the insolvent parastatal ZESA.
When Hwange colliery was run by Anglo American is produced at the rate of 5 million tons per annum & made a profit and paid taxes to the state.
Nick Van Hoogstraten, the ZANU PF, apologist is also a major shareholder
Further, HCCL is producing 200 000 tonnes/month, not per year. The loan is coming in the form of equipment, not cash, (guaranteed by the bank).
MAY BE LOOTED – Change the title of this article to – WILL BE LOOTED. No question they will need houses, cars and money to open shops and travel expenses. 18million not enough for OBERT to get out of bed for its already in someones pocket.
Its Whange Colliery Company, down the drain. Another gukurahundi takadzidza disaster!!
No need to express fears of the loan being looted,because looting/stealing is a key component of Zim-CORRUPTION enshrined in the ZimASSET.
Look at the surname of the Board Chairman ?!!