eBusiness Weekly
Livingstone Marufu
zB Financial Holdings is in discussions with Harare City Council (HCC) to fund urban tollgates in the next few months to raise money for road rehabilitation and maintenance in and around the city, Business Weekly has learnt.
The financial institution is prepared to fork out $50 million to the City Council depending on the local authority’s repayment plans.
The deal, which is expected to kick off in the next few months, will be the second of that nature after ZB successfully floated a $100 million bond to Zimbabwe National Road Administration (Zinara) late last year.
ZB CEO Ron Mutandagayi, confirmed the deal with the City Council, but did not divulge more information as the company is in closed period.
“We have had a couple of meetings with the City Council concerning the setting up of urban tollgates but we are yet to finalise on how much money they need to do so.
“We shall give more information as the deal progresses, if they come up with clear cut repayment strategies we are ready to fund them,” said Mutandagayi.
The Harare City Council is set to resume the setting up of urban tollgates after both Government failed to assist it rehabilitate and maintain urban roads over the past years.
A source close to the developments said though the City Council wants funding for the project, it is not quite sure of how much money it would require while it also does not have a clear payment plan.
The source said: “ZB are at an advanced stage of funding city council’s urban tollgates project and they are willing to float a bond of around $50 million in the next three months.
“The nitty-gritties of the matter are that council is not too sure if it can be able to meet the funders’ repayment demands and once the council has assured them of the repayment the money may be released in a month or so.”
The Government has suspended the setting up of urban tollgates but given the state of the roads in urban centres they may finally concede that there is need to set up tollgates.
Harare Mayor Benard Manyenyeni said tollgates are an effective financing mechanism that will present Zimbabwe with resources to embark on a strategic shift in sustainable transportation infrastructure development and traffic management.
“The time for continuous expansion of the capacity of road networks is reaching saturation point and new ways of managing traffic and infrastructure should be identified and implemented, urban tollgates are certainly one of the ways.
“We are still in discussions with one of the biggest banks in the country and we are yet to agree on the terms of the deal but we want the financier to come up with solutions and revenue collection methods and we will follow their needs.
“Once we have the repayment blueprint we will update the funder and agree on how best we can execute the deal,” said Manyenyeni.
Last year, Government secured a $30 million road equipment loan from Belarus that will help in the rehabilitation and construction of roads in the country’s second largest city.
The facility is set to benefit urban and rural authorities such as the District Development Fund and the Department of Roads and Rural District Councils. To date, 10 tollgates have been approved with implementation already underway.
Government is also finalising sites for the remaining toll gates with 10 likely to be approved during the last half of the year. The plan to erect urban toll gates was mooted in 2013. Sections of Samora Machel Avenue and Airport Road in Harare had already been identified for the structures.
Government introduced the road toll system in 2009 and about $400 million has been collected to date. Of this, $29 million has been disbursed to local authorities for road repairs and construction in their jurisdictions.
