Mutati presents funding chaos on Lusaka – Ndola dual carriageway

*Mutati applies brakes to the $1.2billion Lusaka-Ndola Dual Carriage Way!*

“Government will not borrow or spend a single ngwee, this will be a PPP”

Minister of Finance, Felix Mutati has disowned earlier announcements made by Minister of Infrastructure and Housing, Ronald Chitotela that the Lusaka-Ndola Carriage-Way will be funded through a loan of $1.2billion from China

Chitotela had announced that the loan from China under project finance would be repaid in 17years.

But during the presentation of the 2017-2018 national Budget with a theme; “Accelerating fiscal fitness for sustained inclusive growth without leaving anyone behind”, Finance Minister, Felix Mutati announced that the Lusaka-Ndola Dual Carriage-way would be purely a public-private-partnership (PPP) project where Government will not spend a single ngwee!

But at the launch of the Lusaka-Ndola Carriage-way on 11th September 2017 and other subsequent interviews, Chitotela said the cost of the project would be financed by China as a loan under project finance.

He said the total cost of the project would be $1.2bn and the government loan would be repaid over a period of 17years.

He said government had estimated that by the 17th year, the road would have raised $3.5bn.

He said that , $2.3bn in profits would be ploughed into other roads and related infrastructure.

The US$1.2 billion project was commissioned by President Edgar Lungu a few weeks ago.

Government, through the Road Development Agency (RDA) awarded the contract to China Jianxi Corporation for International Economic and Technical Corporation (CJIC).

The project was contracted by Ministry of Infrastructure as a project finance like government has done with Nakonde-Mbala, Mansa-Luwingu and other roads.

If this was a PPP project, Government would apply its own PPP rules and guidelines which has not been done.

After picking the Chinese company for the construction of the Lusaka-Ndola Carriageway, it was not subjected through the listed processes of PPP guidelines in Zambia and the proposal was never floated or advertised as done earlier.

In 2016, RDA advertised the road as a PPP and selected a South African construction company, Group 5, to embark on the Lusaka-Ndola carriage as a PPP project with estimated cost of $600m.

Group 5 was especially selected because the company is constructing a similar road, the Harare-Beit Bridge Dual Carriage-Way in Zimbabwe as a PPP.

But the selection of Group 5 was abruptly cancelled in February 2017 and without subjecting the process to another PPP process, a Chinese firm was hurriedly single-sourced and picked by RDA and the Ministry of Infrastructure &Housing to be funded as a loan under project finance from China.

But the announcement by the Minister of Finance throws Chitotela’s plans in deep disarray.

During his ZNBC Sunday interview, Chitotela explained that the $1.2billion Lusaka-Ndola road would be dual with hotels, weigh bridges and toll plazas.

“It’s 321km to Ndola from lsk and is the same from Ndola to lsk, therefore 642km.”

“It is 45km from Masangano turn off to Luanshya roundabout, it’s the same from Luanshya roundabout to Masangano 90km.”

“Kabwe by pass will b 20km by 2, therefore 40Km.”

“Kapiri Mposhi by pass will be 20km by 2, therefore 40km also.
Total 812km”

“Bridge at Mulungushi University, Toll plazas, Transit Hotels, Service stations, Weigh bridge, Office space for RDA etc.”

“The cost is off course$1.2bn and the loan will be repaid over a period of 17years”.

“Government estimation is that by the 17th year, the road would have raised $3.5bn”

“Therefore, $2.3bn in profits to plough into other roads and related infrastructure”.

“This project is a legacy project that will earn a chapter for ECL and PF in the chronicles of Zambia”.

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