HOW NAPSA MESSED ITSELF UP IN THE MOSI-OA-TUNYA LIVINGSTONE RESORT VENTURE DURING PF: HOW CAN RETIREES SURVIVE
By Shalala Oliver Sepiso
BACKGROUND TO THE MOSI-OU-TUNGA LIVINGSTONE RESORT
Before investing in the Radisson Blu Mosi-oa-
Tunya Livingstone Resort, NAPSA had already invested in 3 modern hotels namely: StayEasy Hotel at Levy Junction Mall under the Southern Sun franchise, Hilton Garden Inn in Society Building in Lusaka and the Garden Court Hotel at the Edgar Chagwa Lungu Business Park in Kitwe.
However, NAPSA did not come up with the Livingstone project, it bought it from other investors.
The Department of National Parks and Wildlife (DNPW) – formerly known as Zambia Wildlife Authority (ZAWA) – identified a portion of the Mosi-oa-Tunya National Park, and tendered it for development. The proposed site, which is also a northern part of the World Heritage Site and is co-managed by the Department of National Parks and Wildlife (DNPW) and National Heritage Conservation Commission (NHCC), was earmarked for tourism development as reflected in the Mosi-oa-Tunya Management Plan.
In October 2006, following an Environmental Impact Assessment carried out for the proposed Mosi-oa-Tunya Hotel and country club estate development by Legacy Holdings Zambia on an area covering 220 hectares, ZAWA entered into a a Tourism Concession Agreement (TCA) with Legacy Group. This agreement came after an open tender. The scoping meeting of this development under Legacy Holdings Zambia was led by Mr. Renatus “Rennie” Mushinge, the Managing Director of BICON Zambia Ltd. But some disagreements and delays in implementation led to this concession being cancelled by DNPW.
Following the collapse of the first concession, the directors of Mosi-oa-Tunya Resort Holdings (MRH) approached DNPW to develop the pieces of land through an unsolicited bid. There were concerns about how the land was acquired since it was never advertised like in the case of Legacy Holdings. It is important to note that Mosi-oa-Tunya Resort Holdings was only registered in 2017 and in 7 months and weeks, the fledgling company had managed to bid, convince government departments to get permissions to develop and roped in funders to develop the Mosi-oa-Tunya Livingstone Resort. In February, 2018, a TCA was signed between Mosi-oa-Tunya Resorts Holdings – in which Renatus Mushinge was responsible for scoping of the project and was a director and shareholder of the firm alongside Valentine Chitalu – and the DNPW in respect of the Lot 14734/M/A in the Mosi-oa-Tunya National Park located in Livingstone City to develop the Mosi-oa-Tunya Livingstone Resort. This portion of land, which is a 16.85 hectare site is along the Zambezi River, upstream of the Victoria Falls, and at the confluence of the Maramba and Zambezi River, within Livingstone City. The proposed site is a northern part of the World Heritage Site.
The directors of Mosi-oa-Tunya Resort Holdings, upon being successful with their bid, appointed Mukuba Property Development Company Limited to develop the proposed project site. Now it gets interesting here. The shareholders and directors of Mukuba Property Development Company Limited are as follows: Renatus Mushinge (Director and owner of 33.33% shares held held under African Eagle Hotels & Resorts), Valentine Chitalu (director and owner of 33.33% shares) and Jacob Jone Sikazwe (director and owner of 33.33% shares). These are the same people who own the holding firm.
At some point, NAPSA signed a turnkey agreement with Mukuba Property Developers consortium which includes project partners that comprised Stefanutti Stocks Construction as main contractor, Radisson Blu as the hotel operator, and a combination of local and international consultants. What is not clear is whether NAPSA financed the hotel and then bought it from Mukuba at a profit despite its own money being invested or it bought all the shares of the investment. All searches of the companies involved show that NAPSA owns no shares into the developer or the holding company. But because NAPSA is not regulated, this information is hard to come by. Only a proper forensic audit can bring this matter to rest.
Since NAPSA says it is the owner of the hotel, did NAPSA buy the concession? Or they lent money for construction then bought the hotel? Is the hotel being run under a special purpose vehicle?
At this time, Bicon Zambia, also owned by Mushinge, was mentioned as being part of the Mosi-oa-Tunya Livingstone Resort project. This came out during the EIA scoping meetings. But Bicon Zambia, a company that had previous worked with NAPSA on a number of investments including some scandalous ones like the Society Building in town, was not going to sit well with the public. It disappeared from the scene once the project started, Not sure if it was removed. Was it cleverly withdrawn from sight and instead replaced by the likes of Mukuba since these are still the same people?
The Mukuba Property Development and Bicon nexus had been involved in previous developments including Hilton Garden Inn Hotel (in Society Building) in Lusaka and Kitwe’s Garden Court Hotel and ECL Business Park in Kitwe (on land which had previously been ‘Freedom Park’, Kitwe’s town greenspace. All these are NAPSA projects. All these have sad stories in terms of costings of projects and real work done. If we were to look at the spreadsheets, the numbers would shake the public and they would want head to roll. Interesting, the seems to be a trend of NAPSA working with these same directors of companies from project to project despite public misgiving.
Mukuba boasted that the Mosi-o-tunya Livingstone Resort was going to be the largest project ever developed in Zambia in the tourist space. It would include two hotels, a 5-star (120 beds) and a 3-star(180 beds), and an 18-hole golf course, as well as a 600-seater convention centre, kids park, spar and golf club all within the Mosi-oa-Tunya National Park. Hilton Worldwide was earmarked to operated the resort. Mukuba and NAPSA had already worked with Hilton to develop a hotel in Lusaka by this stage Eventually the golf course was removed from plans and replaced by a a putt-putt course and other supporting facilities.
THE SCANDALOUS COST OF THE MOSI-OA-TUNYA LIVINGSTONE RESORT PROJECT
The developers didn’t waste time, within a year of the concession, construction works commenced in the third quarter of 2019 with an initial projection of completion over a 2-year period. The resort’s ground-breaking ceremony was officiated by President Edgar Lungu on 3rd July 2020 and then acting NAPSA Director General Yollard Kachinda.
The final design of the resort showed it would have 180 standard hotel rooms, 20 executive stand alone chalets, a state of the art 500 seater conference hall among other facilities.
Questions have been asked how NAPSA was asked to buy the concession and develop the resort at a cost of approximately USD 100 million without negotiating downwards especially that this was an unsolicited bid. Though the developers of the resort, at EIA stage, revealed that they were partnering with NAPSA to fund the resort and that the proposed project cost was estimated initially set at $149, 098, 000 (USD 149 million) but later announced by NAPSA to be USD 98,000,000 (USD 98 million) i.e. almost USD 100 million, many felt that the cost was still very high.
The suggested real cost of the resort can be found in an article by Richard Aaron Ngoma, which is available in public domain online and is entitled “NOW PF GETS ENTANGLED IN SOCIETY BUSINESS PARK, MILLIONS OF DOLLARS REPORTEDLY STOLEN”.
A good number of the more than 1200 (?) pillars that support the structure of Lusaka’s Society Business Park – that hosts the glamorous internationally-renowned Hilton Hotel located in Society House along Lusaka’s Cape to Cairo Rd right in the heart of Lusaka Central Business District – were said to be about to give in due to huge cracks that had developed. The structural weakness of the building was being attributed to poor and unqualified workmanship that critics said was awarded to politically connected individuals with close links to the Zambian president and the PF party in power. In 2020, issues surrounding concerns over the structural integrity and the need to strengthen the columns of the Society House Tower were raised with BICON reporting that 153 columns of the total of 258 columns were found to have lower than the specified design capacity of the specified concrete strength.
Richard Aaron Ngoma submitted as follows: “According to impeccable sources, cracks in the giant pillars were first noticed in 2018. Remedial measures were awarded to Bicon Construction Company owned by Rennie Mushinge, at a cost of US$20m. Bicon Ltd filled up the cracks without carrying out thorough engineering investigations as to the extent of the structural damage. The Director General of NAPSA Yolard Kachinda approved the Bicon works without expert advice, and reportedly shared the $20m with Rennie Mushinge and named PF top officials. Early in the week, President Edgar Lungu met the Engineering Institute of Zambia Board at State House, where it is reported he berated them for lack of superintendence on the project. Insiders say the President is attempting at scapegoating the real culprits because of his deep involvement with them. The connection of Bicon and NAPSA spreads its tentacles in other business entities. For example, the pension fund awarded a contract to build Mosi O Tunya Pleasure Resort Hotel in the controversial national park land to Mukuba Properties, at a staggering inflated cost of US$98. Mukuba Properties is owned by Bicon CEO Rennie Mushinge. Sources say the correct BOQ cost is $40m with $58m being unaccounted for, under the guise of payments to ‘consultants’. Sources further state that a good chunk of the money was delivered to State House.”
So if Ngoma thinks the BOQ was around USD50million, the quoted price is scandalous!
How did that resort cost pensioners from Zambia’s poor neighbourhoods a whooping K1.7 billion to construct? That is USD 100m. A quick questionnaire passed around a number of Zambian developers comes back with suggestions that it should have cost between USD 20m to USD50m tops!
Unfortunately, because NAPSA is not regulated, the figures have never been been made available to many people who should be seeing to it that the right things are or were being done. Only a proper forensic audit can bring this matter to rest.
If the hotel cost less than USD 50m, where did the USD 48m go? Could the developer have gained too much money so that they developed the property at 4 Omelo Mumba Road from the profits? Wouldn’t be good if Mukuba Property could come out and state that the Rhodespark Hotel building on Omelo Mumba has nothing to do with the Mosi-oa-Tunya investment?
OTHER CONCERNS MAKING THE MOSI-OA-TUNYA RESORT INVESTMENT PROBLEMATIC
Some commentators said they saw this project as a selfish venture and looked at suspiciously because it came at a time Hon Ronald Chitotela had just moved from Ministry of Infrastructure to Ministry of Tourism. At that time, Chitotela was facing accusations in the press of impropriety undertakings in deals and other forms of suspected corruption and money laundering. More suspicious was the fact that the Zambia Tourist Board of directors, headed by Peter Jones who was the owner of The River Club in Livingstone and was opposed to the development, had just been dismissed. Many felt the development scheme would and later was approved using underhand methods as a result.
At at EIA stage, several people raised concerns about the whole area meant for the hotel development being an important elephant corridor and how the resort would create a wildlife barrier in the park.
The Zambia Environmental Management Authority (ZEMA) approved the project’s environmental impact assessment and also approved the project. And because part of the land offered for the construction of the hotel was within the “elephants corridor” and it was feared that this resort may lead to the elephants abandoning the route and thereby reducing their visibility and attraction to Livingstone, which is Zambia’s tourism capital, the approval came with conditions such as no fencing of the facility. “While noting that the project proposal was amended to reflect the condition of ZEMA that no fencing would be erected around the resort, the site selection would appear to be in contradiction to the aim to ensure the natural movement of wildlife, especially the area around the Maramba River, which is a known elephant corridor,” one write-up noted.
The developers promised to leave animal corridors within the development to allow the elephants to go through resort and especially the golf course part. They assured stakeholders that the hotel would not be fenced. This raised concerns on how clients would be protected from both elephants and hippos. These concerns later led to the golf course being dropped from the plans. But when construction was done, there was now fencing all around the project clearly blocking the wildlife. This led to critics stating that the project clearly breached the conditions given by the ZEMA approval for construction-to not block wildlife from accessing the rivers and many felt this was reason enough for UNESCO to deny the area its world heritage status.
Critics asked, was it worth using pensioners’ money to develop something that would lead to a World Heritage status being lost?
The World Heritage Centre and International Union for Conservation of Nature (IUCN) Reactive monitoring mission visited Zambia and Zimbabwe from 9th to 13th February 2022 to assess the threat of tourism development pressure such as the Mosi-oa-Tunya Livingstone Resort (to be run by Radisson Blu) and the proposed Batoka Gorge Hydro Electric Scheme. Both Zambian and Zimbabwean governments were accused of not caring about the World Heritage Site status of the Mosi-oa-Tunya/Victoria falls area going by the kind of massive projects they were permitting within the World Heritage Site boundaries, on both the Zambian and Zimbabwean sides. Recently, the Victoria Falls City Council announced a new ‘massive’ US$50 million riverside hotel development in conjunction with Lamcent Capital, to be built on the banks of the Zambezi about 5 km above the Falls, sandwiched between the recent Palm River Hotel development and Zambezi Lodge on the south bank (Zimbabwe).
Another asked why Zambians did not get to a point where they held investors and companies accountable for not abiding by environmental regulations.
Then there was the issue of height of buildings. All developments within National Parks and World Heritage Sites area are required to be below the ‘average tree height’ so as not to visually intrude on the skyline. The developer was accused of erecting hotel buildings which were up to 16.4m which is was deemed to be below the maximum tree height as opposed to average tree height.
As at now, the resort is done. It is now going to be run by Radisson Blu and not Hilton as earlier plan. This is Radisson Hotel Group’s first resort and third hotel in Zambia, The resort, officially called Radisson Blu Mosi-Oa-Tunya Livingstone Resort, is run by General Manager Mr. Shaun Wheeler. The newly constructed resort has facilities such as the biggest conference complex in Livingstone, a spa, a kids centre, hotel rooms, villas, swimming pools and a 90-seater boat on the water for cruises. It was set to open this past month of September 2022 with offerings such as unique on and off the river adventure activities, from Victoria Falls bridge activities, water-rafting, canoeing and game drives to helicopter rides, river cruises and elephant encounters.
IS NAPSA AGAINST PATNERING WITH BICON AND MUKUBA FOR THE KASABA BAY RESORT?
Mukuba Property Development Company (MPDC) plans to develop the Kasaba Bay Resort project on behalf of African Eagle Hotel and Resorts (AEHR). The project site is located in the Nsumbu National Park in Nsama District, Northern Province, Zambia. Located at approximately 50km North East from Nsama town, the site can be accessed from the Nsama entrance to Nsumbu National Park at the DNWP gate. Continuing on gravel road going South East for approximately 15 Km to reach Nkamba Bay lodge entrance and a ZESCO substation. The site is approximately 1kms South East from the Kasaba Bay airstrip.
As earlier noted, MPDC is said to be a special vehicle that was incorporated in 2012 (though PACRA records show 2017) by Bicon Zambia Limited to facilitate local institutional investors and financial institutions to own offices and serviced apartments at Bicon House. MPDC is 100% owned by Bicon Property Zambia Limited. Both are owned by Mr. Renatus Mushinge.
The Ministry of Tourism and Arts, DNPW, through its General Management Plan for Nsumbu National Park (2020-2030), set aside and zoned areas for park management. DNPW identified a portion of the Nsumbu National Park, and African Eagles have been provisionally given a lease to develop 50 Ha by putting up a resort comprising of a 120-key 3-star hotel and conference, a 80-key 5-star hotel, and other supporting facilities such as dining areas, storage areas, laundry areas, male and female toilets, ball room, terrace, and generator area, plant area, meeting rooms, offices, reception/lobby and main kitchen. The resort will also have a Maintenance workshop, Beach Club including Spa and Gym, Wellness center and Boma, a Kids Club and a Hotel water arrival Jetty.
On 4th March 2022, ZEMA called for comments on the proposed Kasaba Bay Lodge through an advert placed in the Zambian Daily Mail.
In the Environmental & Social Impact Assessment Studies for The Proposed Kasaba Bay Lodge in Nsumbu National Park in Nsama District of Northern Province in Zambia by Mukuba Property Development Company report, on page 15 under sub-title 188.8.131.52 (National Pensions Scheme Act No.7 of 2015), the developers let the cat out of the bag when they stated that “The developers are partnering with NAPSA to fund the resort.”
Ok so NAPSA is again working with Bicon Zambia and others to develop, is it now the 10th property? Isnt this too much considering many of these are not through open tenders?
In fact, isn’t this the same Bicon which is now suspended?
On 25th July of this year, Zambian Business Times’Tyndale Muchiya, in an article entitled “Society house saga deepens as EIZ suspends BICON & BCHOD” revealed that the Engineering Institute of Zambia (EIZ) had suspended the membership of BICON, a Consulting Engineering firm, following the irregularities revealed after a joint investigation conducted by the EIZ technical committee and the government’s Joint Investigative Team (JIT) on Society House. The EIZ President, Mr. Abel Ng’andu, however mentioned that the suspension is due to the gravity of the matter, EIZ has suspended their membership as governed by the EIZ statutes. Ng’andu however could not reveal the actual irregularities, stating that the matter was before the government’s JIT working with the EIZ. EIZ has since urged its Members to strictly follow the code of conduct and provisions of the EIZ act.
The proposed project cost for the Kasaba Bay Lodge is estimated to be $50, 000, 000 and the construction works will be in 2 phases to commence in January 2023 – December 2024 for the first phase. And the rest of the development completion of the second phase by 2026.
So now NAPSA is paying USD 50m for a similar project to Mosi-oa-Tunya Livingstone Resort and not the USD 98 million for the Livingstone one?
Clearly the USD 100 million for Livingstone is scandalous and authorities should take interest.