By Staff Reporter
Former Zesco board chairman Dr Mbita Chitala has disclosed that he flatly refused former justice minister and now PF vice-president Given Lubinda’s request to approve the sale of Zesco’s assets to his long time Chinese friend.
In his book Corporate Capture, the Political Economy of Electricity Management in Zambia 2014-2021, (How Not to Manage a State Enterprise), first obtained by Daily Revelation, Dr Mbita Chitala stated that he was summoned by then Justice minister Lubinda during his time as Zesco board chairperson to sign the resolution on the sale of 7.9 hectares Zesco land, which housed 23 medium cost power station houses among other things.
He stated that the said land had been proposed to be sold at $253,500.00, which he said shocked him that an attempt was made to strip Zesco of its valued asset at a give away price, without even the board discussing the matter and making the appropriate resolution.
“I had earlier been summoned by the Minister of Justice, one Hon. Given Lubinda then who I learnt was a long time friend of the Chinese investor whom he had met when he worked as Minister of Tourism. Lubinda asked me to sign the resolution and failing to do so would not be in the interest of Zambia as a competitor country might take the investment and Zambia would be the loser of such an investment,” Dr Chitala stated. “I was very surprised as my sixth sense told me that I was again experiencing an attempt to abuse an office of trust and I flatly hold (told) Given Lubinda that the government position which he briefed me on was not in the public interest.”
Dr Chitala stated that at the meeting of the board, the members agreed with him that Zesco would be in breach of its fiduciary duties if it started stripping the company of its assets which could not be justified.
He said the board therefore resolved that two options be considered, 1) that the board must discuss with the investor and enter into a joint venture agreement on terms to be mutually agreed and that Zesco surrenders the land to the Ministry of Lands for re-allocation to an investor of their choice.
“The Chinese investor refused option one while the government was not ready to accept option two. As it turned out, this was another of my transgressions and I was accused of not being user friendly to the authorities,” Dr Chitala stated.
The background to the matter was that Zesco Limited had received an expression of interest from Victoria Falls Eye Limited company to purchase a portion of the Zesco land being Lot 473/M Livingstone for constructing a Ferris Wheel which would add to the tourism ventures in Livingston.
He said the company had been registered in Zambia in 2017, with the shareholders being Qingdao Ruichang Tech Industry Co. Ltd of the People’s Republic of China, holding 13,500 shares and the Ministry of Torusim and Arts holding 1500 shares for and on behalf of the government of Zambia.
“This was already an anomaly as by law only the Minister of Finance can hold shares in a company on behalf of the Zambian government,” Dr Chitala stated.
He stated that the company aimed to erect and operate a Ferris Wheel at Victoria Falls in Livingstone as part of promoting local and international tourism by providing economically acceptable method of aerial viewing of the Victoria Falls.
“The land in question was in extent 7.9 hectares behind the Substation and included 23 of the medium cost power station houses from MC11 to MC33. It extended all the way to the plot boundary along the rail line. Apart from the ZESCO houses the only other structure that could be affected by the proposed development was a church. The houses were constructed under the Power Rehabilitation Project as temporal structures for contractors,” Dr Chitala stated. “At the end of the project, all Zesco employees residing in these houses were given plots along the Airport Road with Livingstone to which they were expected to relocate . The rationale from the relocation was that the ZESCO land (Lot 473/M Livingstone, where the houses were built was in the Mosi-pa-Tunya National Park and therefore not designated for human habitation.”
Dr Chitala stated that the board was informed by management that the subject property was uniquely located close to the Victoria Falls which the corporation was not fully exploiting with its current use of the land, and that rentals collected from the housing units were below market retail.
He stated that management informed that a comparison between the rentals collected and the market rentals that could be collected showed a loss of income of K1,998,000 per annum and that the properties would require a large capital injection to upgrade them to modern standards as they were in poor state of repair.
Dr Chitala stated that apart from the factor of age, condition and style of the houses, other factors that affected the Livingstone property market included the argument that Livingstone was home to the Victoria Falls, the recent upgrading of the Harry Mwaanga Nkumbula Airport and that the city benefited from hosting the United Nations World Tourism Organization Conference in terms of infrastructure.
He stated that management proposed that the advantages of sale outweighed those of ownership, and therefore a proposed offer maximum price of US$253,500.00
“The ZESCO management drafted the appropriate resolution and passed to me as chairman to append my signature to dispose of the land. I was not only shocked of the attempt to strip ZESCO of its valued asset at a give away price but annoyed that an attempt was even made without the board discussing it and making the appropriate resolution,” stated Dr Chitala. “I humbly declined to append my signature to the sale and called for an emergency meeting of the board to discuss the matter.”
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