Lusaka-Ndola Dual Carriageway; A Criminal Contract
By Amb. Emmanuel Mwamba
On 28th February 2023, the Government Republic of Zambia (GRZ) signed a US$650m, 25-year Public Private Partnership (PPP) Concession Agreement with a newly formed entity called; Macro Oceans Investment Consortium (MOIC) to construct a 327km dual-carriageway between Lusaka and Ndola cities.
Macro-Ocean Investment Consortium claims it’s a group of Chinese Companies, headlined by Aviation Industry Corporation (AVIC International) and China Railways Seventh Group, which partnered with an unkown local entity.
The trouble with this contract was the project financing structure announced.
Before even approval was sought, Government announced that funding of the project will be met through loans from pension funds; NAPSA and Workers Compensation Fund Control Board.
Further, the contract stipulates that the Concessionaire will immediately take-over the operations of the toll gates and its revenues.
This meant that this contract was purporting to be a Public Private Partnership( PPPs) when infact its the public funded project through public pension funds and through toll fees paid by motorists before the road was even delivered.
This meant that the source of funding for the project is forced loans from public pension funds run and operated by Government, and free revenue to the Consortium.
If the Concessionaire believes in the project let it obtain its laons from private pension funds like AfLife and banks.
Clearly the Consortium will will not raise any money, but build the project from public funds, operate and mint billions of dollars for a period of 25years while purporting that this was a PPP.
Thieves.
Like the new Vedanta/ZCCM-IH contract, this is one of those contracts with crime and fraud, embedded at the heart of the contracts.
NRFA has just announced that it will handover the toll gates to the Concessionaire.
Below is their statement.
LUSAKA-NDOLA ROAD TOLLGATES TO BE HANDED OVER FOR UPGRADE
The National Road Fund Agency -NRFA- has started engaging stakeholders on the handover of three Tollgates on the Lusaka- Ndola road to the Concessionaire who will be upgrading the stretch into a dual carriageway.
NRFA Public Relations Manager ALPHONSIUS HAMACHILA says among the stakeholders being engaged are the Road Development Agency -RDA, the Concessionaire, and the workers unions.
Mr. HAMACHILA says this is to ensure that a smooth transition is undertaken within existing provisions of the law.
The Tollgates to be handed over are Katuba, between Lusaka and Kabwe, Manyumbi, between Kabwe and Kapiri Mposhi both in Central Province; and Kafulafuta, between Kapiri Mposhi and Ndola on the Copperbelt Province.
He says Government through the implementing Agencies will ensure that workers interests and rights are protected and jobs secured during the process.
ZNBC
Man.
Does it mean there is nothing good or right in Zambia.
All is corruption, bad etc.
Something is surely wrong with you.
Every day it becomes clear why PF ruan down the economy because understanding basic issues is a big challenge to them. Lusaka – Ndola dual carriage way project financing arrangement is the best one we can have for such projects.
Firstly, NAPSA financing this project means the institution will reap the profits (interest on the loan) on top of the investment in the project meaning the proceeds from this project will remain in the country unlike if the project was financed by outsiders meaning all the money will be taken out of the country by the financers. Secondly, it gives NAPSA a steady flow of revenue since the concessionaire will be servicing the loan during the period of the concession. Thirdly, the government will be getting a share of the revenue from the toll fees despite not investing anything in the project. These are the same people who complain that foreigners are taking out all the money but when an initiative like this is made to have money stay in the country, they still complain. What kind of people are these who can’t seem to want the country to progress but always find ways of talking bad about it?
You put it very correctly that the money will be paid back into the Zambian economy which is highly commendable.
The elephant in the room is WHY a foreign consortium is allowed to borrow our money and make profits on it INSTEAD OF LOCAL COMPQNIES.
That consortium will collect way more than they are borrowing and all they are going to keep in zed is the money they will borrow then the rest will go outside.
Imagine all that money they will collect for 25 years invested locally – THAT IS THE BONE IF CONTENTION
There is arrangement to share the proceeds from the toll fees between the concessionaire and government but all the maintenance works on the road will be carried out by the concessionaire only without any government spending anything and at the end of the concession, government will get an almost brand new road to run and keep all the proceeds from there.
Can the learned please keep us informed instead of our politicians who are busy peddling lies after lie.we are tired and confused because our so called graduates are silent on national issues while our politicians are busy commenting on issues which they don’t understand and can explain clearly. It’s my hope that our learned graduates from our higher institutions of learning will shade more light on this very important issue highlighted by mr.emmanuel Mwamba.
There is nothing like been a graduate this is an open secret ,there govt is stealing or hh
What basics iwee chikala ,how can you give tollgates to a concessionaire even before constructing the road ,read and understand
This is where I do not understand also. Surely it’s NOT right to give the concessionaire control of tollgates before the road is completed. On this one, the government has to explain what’s going on.
STRAIGHT FORWARD, you are very right. Further to your good remarks, yesterday (28 April, 2024), President HH assured the NATION in his speech, during the centenarary birthday of the late former President KK’s day that HE IS TRYING BY ALL MEANS TO RESPECT AND FOLLOW KK’s LEGACY. I heartily CONGRATULATE the President for this. This is good in that: 1. President HH must bring back a ONE PARTY SYSTEM OF GOVERNMENT SO THAT PEOPLE LIKE EMMANUEL MWAMBA SHOULD BE MADE TO SHUT UP. 2. ANY RULING PARTY SHOULD BE ALLOWED TO GOVERN ZAMBIA FOR MINIMUM 27 YEARS. 3. BRING BACK PRICE CONTROLS 4 BRING BACK S.I.T.E.T 5.ZAMBIANISE ALL THE MINES IN ZAMBIA etc, etc.
Democracy that pleases outsiders vs our own system of democracy…
Pc what is your own system of democracy?
I feel Government can explain more on this arrangement. It looks like it doesn’t really add up.
Mwamba has a point here.
This is a straight forward issue. Let me try to put it in simple terms. The concessionaire was supposed find financing for the project. There are two options available, one is to obtain a loan from an international institution, say a bank or a local one, say a bank again. Now the concessionaire is supposed pay back the loan to the lend with interest. Let’s say the amount borrowed is $600 million (the cost of this project from information we have heard) and assuming the interest on the loan will got up up to say $600 million for the said period, it means if the money was from from outside the country, all of the $1.2 billion will go outside the country to the lender meaning we have lost that money but if the loan was obtained from within as in this case, all of this money will remain in the country, meaning NAPSA will make $600 million profit from this project.
Surely is this not a good arrangement?
Why is the concessionaire a foreign one and not a local Zambian. This is the part you are ignoring to address.
Any Zambian concessionaire can still engage the same firms to build the road then retain the money locally.
Why a foreign company not a local one.
The tender was floated meaning both Zambian and international companies bided for the project. I don’t why local companies were not picked but I can assume they failed to meet certain requirements after an assessment, Zambian companies which participated in tender did not have the technical capacity or they were more expensive or something else. We even have the Mikalile scandal as an example (whether it’s true or not that for another day).
And let’s be honest, most Zambian companies do shoddy works (not all of course) at very exorbitant prices. One can just look at the Chingola – Solwezi road where only the parts which were done by Zambian contractors have become damaged while parts done by the Chinese companies are still ok. So the question is do we want a road which would get damaged just a few years later done by Zambians companies and probably even more expensive or do we want a quality road that will last at a reasonable price even if it done by a foreign company?
Just to highlight a point regarding Chingola – Solwezi road, parts which were done by Swift and Buildcom which are Zambian companies have already developed potholes while the parts which was done by China Geo engineering is still ok. For those doubting, they can check the road and verify this for themselves to prove what I’m talking about.
A lot of people will be arrested after Upnd is out power in 2026 because they have no fear what’s so ever! They are in government to enrich themselves. There’s no such contract where you provide money to the contractor. Something is really fishy here! It smells, it stinks of high level corruption! The same police officers and judges Upnd is using to jail PF politicians , will also come and arrest and jail Upnd politicians in December 2026, just before Xmas!
Mandanda education is free now go back to school because you’re very dull
Straight Forward has explained clearly but you’re not understanding
Zambia doesn’t have contractors of high quality to undertake such projects
So foreign contractor comes in Zambia without money but expertise
He borrows from NAPSA $600m in order to construct a government road because this government has no money
Then he negotiates with government that I have borrowed $600m plus interest which I have to pay back to NAPSA a local firm
Since you as government has no money allow me to collect money from the Tollgate. This money which I will collect over 25 years, I’ll use it to payback NAPSA ($600m plus interest at 25% say $150m) $750m. Of course I will also need something for doing the job using my own expertise, labour and equipment, say $250m
So only part of the $250m will be externalised but the rest of the money will not only make NAPSA rich but stay in the country, unlike borrowing from a foreign firm
Mandanda what’s wrong with that? Why should someone be imprisoned in future? Tell me
The only thing that the zambian government should never forget is to attach zambian professionals like civil engineers, surveyors, mechanical engineers, etc to this project
These professionals will learn how to construct roads so that in future we’ll be using our own local contractors to undertake such projects and keep our money 100%
I submit
It would also take long time to raise money for that project if it means to just save the revenue from these three toll gates.
Now if a wise man in the name of HH comes up with an Idea to that surrendering the revenue from these three toll gates instantly for use on Ndola dual carriageway project, it will clearly be shown that the government structure is used properly in a good development
Just look at how the same idea has worked for the Chingola-Chililabombwe Rd. People are happy. The problem is that the PF wants deals where they can benefit. They go to China and borrow money for roads at a high price, get half of it just like the way they wanted to get $600 million from the Ndola-Lusaka dual carriage way. So Mwamba is speaking from a corrupt position.
I agree with you, M Kalengo. The Workers Compensation Fund Board (WCFB) was one of the lenders to the Chingola-Chililabombwe Road project. Cash has started flowing into the coffers of the WCFB now because the road is complete and the tollgates are collecting the cash.
Thank you Gunner. And you see, ordinary should be able to benefit in a simple way! Good road, fast movement and job done. Not going to China and borrowing and then subject ing future generations to paying this debt. Kudos to UPND. Ba Pf kaya!