Storm over $218m Net-One China loan

via Storm over $218m Net-One China loan 18/09/2014

PARLIAMENT has approved a $218 million Chinese loan deal for a Net-One expansion project with MPs however, calling for a radical managerial shake-up at the company to ensure the money is not put to waste.

The loan, which is part of deals struck by President Robert Mugabe during his state visit to China earlier this month, will see the mobile telecommunications company getting $218 954 843 payable over 20 years.

While approving the loan, MDC-T MP, James Maridadi, warned that if not monitored properly, only a small portion of the money would go towards its intended use with a large chunk being shared by senior executives.

“Mr Speaker we need to monitor how this loan will be used because we have experience with these people. They will buy unnecessary things for themselves and not direct it towards capacitating of their network distribution,” he said.

Maridadi questioned why the government should continue bailing out the company when it was the first to hit the market in the telecommunications industry.

He said because of poor calibre of managers, NetOne “has now been overtaken by other players such as Econet and Telecel”.

“If we were to look at the audit report from the auditor-general, Net-One was not given a clean bill due to its corporate governance structures. I suggest that they first deal with their management issues and then we can support them,” he said.

MDC-T MP, Jessie Majome, said although she supported the loan advancement to the company, the government as the guarantor of the money, should keep its eyes on the ball and ensure that no “long fingers” dip into the fund and abuse it.

In presenting the motion while seeking approval from parliament, Finance Minister Patrick Chinamasa said the deal was aimed at assisting Net-One to install 1 000 network boosters countrywide.

The deal also has a grace period of five years from which the state enterprise should start to repay the loan.
Southerton MP, Gift Chimanikire, demanded that that Net-One boss, Reward Kangai, be fired first as he had failed to deliver.
He said even if the company was given a lot of money, it would still encounter serious problems if Kangai remained at the helm.

“We need to change the management there, because since the inception of the company, the same people have been at the helm of the institution and there is nothing new to expect,” he said.

“This company has never declared a dividend and continues to be a drain on treasury,” he said.

But Chinamasa defended Kangai saying he deserved recognition from the MPs since he had steered the company without meaningful funding from government which is the sole shareholder.

“Before I was involved in the negotiations of this loan deal, I had the same questions as asked by Honourable Chimanikire that why is the company failing to declare dividends?

“But I was told that government, as the shareholder, has done nothing to capacitate Net-One since its inception.

“Honourable Maridadi is talking about being overtaken by other competitors, it’s true, but as government what have we given to management so that they can deliver?” Chinamasa asked.

The Strive Masiyiwa-owned Econet is the leading telecommunications company in Zimbabwe followed by Telecel with the state-owned Net-One at the bottom of the rung.

COMMENTS

WORDPRESS: 5
  • comment-avatar
    Mixed Race 8 years ago

    “What have we given NetOne management?”-says the minister with no shame.This NetOne management is earning more than $6000 per month and huge allowances at the taxpayers’ expense.The minister is justifying the impossible.If a telecomms network or any business cannot sustain itself then it should be closed and give its licence to a better company.
    You really need special consultants to ensure that our money is being used to buy the relevant base stations of good aerial coverage to penetrate the rural areas well.If we are not careful substandard base stations and MTSO [Mobile Telecomms Switching Office in Harare] will be installed to cut costs resulting in a further deterioration of this network.
    When this network was first launched most of us had high hopes for its country wide coverage but this has been badly managed by politically connected individuals.Do not support poor management for political gains which will cost the country more resources unnecessarily.

  • comment-avatar
    Sonofngwazi 8 years ago

    Hezvo! Imwe fleet yemota yakutengwa kkkkkkkkkk

  • comment-avatar
    Mena Bona 8 years ago

    There is not a doubt in the world that the connected will not steal at least Half of that money. ZANU PF have not done a thing for that country except destroy and plunder it. Next to Mabuto Sese Seko, no other African country has destroyed or stolen as much as Mugabe and his gang. This is really saying something because Africa has had more Kleptocracy’s than the rest of the world put together. They make that old man chairman of Sadc? Africa has gone nuts.

  • comment-avatar
    Tjingababili 8 years ago

    THE ENGLISH ARE IN CHARGE IN ALL PARASTATALS/QUANGOS!

  • comment-avatar
    Petal 8 years ago

    would not be surprised that their personal accounts have been lined with money from the chinese