By Mubanga Mubanga
Former Minister of Finance and National Planning minister Dr Situmbeko Musokotwane says it is a “fictitious imagination ”, allegations by Tonse-Pamodzi Alliance running mate Makebi Zulu to assert that cost of Lusaka Ndola Road has been revised from $450 million to $850 million.
Responding to Zulu in a statement, Dr Musokotwane stated that the cost of the road had never been revised since the contract was signed. He stated that it was the PF where Zulu belonged that should explain the serious financial irregularities associated with the Lusaka-Ndola Road.
“The amount of misinformation, economy on truth and lack of understanding in the statement is shocking. This note concludes that it is the PF and its offshoots where Mr. Zulu belongs that must explain the serious financial irregularities associated with the Lusaka-Ndola Road during their time. Don’t shift blame! Let me elaborate,” Dr Musokotwane stated. “The contract amount for the Lusaka Ndola Road as negotiated by the UPND government under Public Private Partnership (PPP) is $649 million. This amount has never been revised since it was signed. So those allegations of the cost of the road being revised from $450 million to $650 million to $850 million is pure fictitious imagination from the learned counsel! Total lies.”
Dr Musokotwane stated that had the PF gone ahead to construct the road, it could have cost double than the current amount at which it was being constructed.
“Here is the interesting part which Mr. Zulu conveniently left out in his statement because it is an embarrassment for him. It is scandalous. The PF government, where he belonged, did try to build the same Lusaka Ndola Dual Carriage way. Their proposed mode for financing the road was going to be a loan from China. And, the proposed cost for the road under the PF: $1.4 BILLION. If you add the interest cost, the amount rises to about $1.8 billion,” Dr Musokotwane stated.
“In other words, had the Lusaka Ndola Road been constructed by the PF government, it would have cost more than double what it is costing now under the UPND government. It follows therefore that the administration that should answer questions about inflating the cost of the Lusaka Road is the PF government. What was the motive, during the PF, to commit the country to $1.8 billion financial obligations when the road could be built at half the cost?”
Dr Musokotwane stated that PF initiated negotiations for the loan for the Lusaka Ndola Road, but the negotiations could not be concluded because it has started to default on other loans. He stated that China considered risky to approve a loan to a country which was already a “defaulter”
“We have to remember that the PF borrowed without prudence so at the time of the proposed Lusaka Ndola Road, external and even local financiers had lost trust in the government’s ability to pay back loans. The Lusaka Ndola Road was not the only project that was adversely affected by the cancellation of credits to Zambia,” Dr Musokotwane stated. “Other major projects in similar situations were the Kafue Gorge Lower Power Station and the Kafulafuta dam. In all therefore, there was no loan from China to finance the road because such a loan did not exist. Mr. Zulu is totally ill informed on the matter.”
Dr Musokotwane stated that with a heavy debt servicing on the shoulders of the country, Zambia had no capacity to repair or even expand the Lusaka Ndola Road.
“This is why the UPND government had to find and apply innovative financing methods like the Public Private Partnership (PPP) to achieve the same objective of upgrading the road. This is a common approach in many countries in Africa and beyond,” Dr Musokotwane stated.
“The Lusaka Ndola Road is being developed by a consortium of private players. They are financing it using a combination of sources which include equity (their own money) and borrowing (debt). NAPSA is one of the sources (i.e. not the only source) for their borrowings in addition to other lenders. Mr. Zulu says NAPSA and other lenders must be allowed to run the tollgates because they provided the financing.”
Dr Musokotwane stated that the lack of understanding of basic economic knowledge by Zulu was what made it dangerous for PF and its offshoots to run government.
“This is also a shocking statement that reflects lack of understanding of the role of financing houses. It is like saying because a bank has given you a loan for your farm, then the bank must now also run and manage the farm to get its money back! Financiers’ role is to provide finance, not to run the enterprises they lend to. The management of the enterprises that have borrowed is left to their owners because they know best how to run their own business. The financiers still derive benefits from lending because they earn interest and fees which they charge the borrowers,” Dr Musokotwane stated.
“They also put in place arrangements to secure their payments which, however, do not include managing the business like Mr Zulu suggests. It is this lack of the basics on how an economy functions that makes it dangerous for PF and their offshoots to run government because their lack of knowledge leads them to destroy rather than build an economy.”
