$25m loan to recapitalise Zupco — Chombo

via $25m loan to recapitalise Zupco — Chombo 24 July 2014

LOCAL Government minister Ignatius Chombo yesterday told Parliament that the government had secured a $25 million loan facility to enable the Zimbabwe United Passenger Company (Zupco) to beef up its fleet and take charge of all urban routes.

Chombo told the Parliamentary Portfolio Committee on Local Government that he was working in close liaison with Transport minister Obert Mpofu to phase out commuter omnibuses plying urban routes and bring sanity into the public transport sector.

He said the loan facility had been secured from Exim Banks of India and China.

“The ministry has put in place strategies to create order and reduce congestion and pollution in urban areas, and a $25 million loan facility from the Exim banks of India and China will enable purchase of a 65-seater high volume buses which will allow the transport sector to move from the commuter omnibuses to high volume buses,” said Chombo.

“In my view — from the situation on the ground — we need to do a national policy study on transport to determine what mode of transport we need in Zimbabwe compared to what is happening in other countries,” he said.

Chombo said Zupco’s problems emanated from stiff competition posed by commuter omnibuses.

“Historically, Zupco was established in urban areas during the colonial era to transport black workers to factories and it was a monopoly. The companies and Rhodesian government used to subsidise it and it was easy for them to make money.”

He added: “During the 1970s it had 2 800 buses and had few competitors who plied rural routes. There were less than
20 000 vehicles in Harare, but now there are more than a million and people are using private transport. Stiff competition from commuter operators also affected them.”

“The issue of the Zupco debt should be taken over by government as was done with other parastatals such as Air Zimbabwe and the National Railways of Zimbabwe,” said Chombo.

Acting Zupco chief executive officer Tendai Masaire recently told Parliament that the Zupco debt stood at $19,7 million and culminated from unpaid debts to workers and creditors and pension deficits.

COMMENTS

WORDPRESS: 3
  • comment-avatar
    Mukanya 6 years ago

    What portion/amount is reserved for project management executives Mr/Cde MINISTER?

  • comment-avatar
    Mlimo 6 years ago

    Owes 19 mil and borrows 25 mil how stupid are the lenders?

  • comment-avatar
    bruce koffe 6 years ago

    How many times does ZUPCO get recapitalize. ZUPC was capitalized at inception and now you want recapitalize so that you ZANU PF can use it to carry your party supporters for the Dec Congress.Group of thieves and robbers. When Chikowore was the CEO of ZUPCO it was recapitalised. He promised to bring back 115 or so buses back on the road. He only managed less than 5, and thus when he looted over $200k, nothing happened instead you gave him a retrenchment package for looting. Your lot ZANU PF will never be successful, you have no idea of good corporate governance. Mugabe claim of many degrees he can not even one degree except violence to remain in power for both country and the firts secretary of Zanu PF.