The Lusaka Ndola Dual Carriage: Responding to Makebi Zulu- Situmbeko Musokotwane

The Lusaka Ndola Dual Carriage: Responding to Makebi Zulu
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Situmbeko Musokotwane
Introduction
This note is a response to a video statement issued by Mr. Makebi Zulu several days ago. In the statement, he claims that there has been corruption surrounding the Lusaka Ndola Road. He presents three points to support his accusation.

Firstly, he claims that the cost of the road has been raised three times from $450 million to $650 million and then to $850 million. Who is benefitting from the revised higher costs, he asks. Secondly, he claims the Chinese government offered a loan and a contractor to build the road. Why then did the government abandon the loan option of financing to ask NAPSA to finance the project? Thirdly, he claims the government paid the contractor $30 million towards the road and not a meter of the road was constructed from the $30 million.

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.

Cost of the Lusaka Ndola Road
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.

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. 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?

Mr. Zulu wonders why NAPSA came in to finance the Lusaka Ndola Road when the Chinese government did provide a loan for the same and even disbursed $30 million. This is yet another big fictitious imagination.

Source of Financing for the Lusaka Ndola Road
China never provided a loan for the Lusaka Ndola Road even though the PF government initiated negotiations for the same. However, the loan negotiations could not be concluded because Zambia had started to default on her other loans. China considered it risky to approve a loan to a country that 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. 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.

With heavy debt servicing on her shoulders, Zambia had no capacity from its budget to repair or even expand the Lusaka Ndola Road. Yet, this most important road in the country, was in a state of terrible disrepair but it was not given priority. 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.

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 run the tollgates because they provided the financing. 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.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.

The $30 Million Disbursed by China for the Lusaka Ndola Road
Finally, Mr. Zulu asks: Where is the $30 million that China disbursed towards the loan for the Lusaka since not even a centimeter of the road was constructed using this money? This is the most perplexing of all questions to the UPND government because it is Mr. Zulu and his colleagues from the PF who must answer his own question.

As explained above, China never approved nor disbursed a loan for the Lusaka Ndola Road because China had concluded that under the PF government, Zambia had become an untrustworthy borrower. However, under the PF government, $30 million from the Zambian Treasury – Zambian taxpayers, money – was indeed disbursed to the contractor they had chosen to build the road. And Mr. Zulu is right that not a meter of the road was constructed using this money. That is why those who were in the PF government must answer the question: Where did the money go? Why is a person, who was part of a government that gave $30 million to a contractor that never performed, asking the UPND government where the money went? The UPND government has spent the last four years trying to recover this money. The PF must explain.

Conclusion
The video by Mr. Makebi Zulu alleging corruption on the Lusaka Ndola Road is a reflection of a person who is using falsehood to twist facts as way of camouflaging the wrong things during their time. They tried to borrow huge sums of money to do the road which was going to cost more than double of what the UPND government was able to achieve. And then they gave a contractor $30 million from the Zambian Treasury towards the road. Of this amount, no construction of the road was undertaken. Mr. Zulu, since you were part of the PF administration that disbursed the money that supplied air, may your team please tell the nation where the money went.