Funding delay continues for $577m Lusaka-Ndola dual carriageway construction

Concerns are mounting as the much-needed construction of the Lusaka-Ndola dual carriageway continues to face funding delays. The project, which was expected to commence in 2020, is yet to take off, leaving the public in despair.

Road Development Agency -RDA- says the official commencement of the Lusaka – Ndola dual-carriageway is expected to commence in March which is the last extension the authority has given to Macro Oceans Investment Limited who were awarded the contract.

In February, 2023, the New Dawn Government signed a USD 577 Million concession agreement deal with Macro-Ocean Investment Consortium for the financing, construction, operation and maintenance of 327 Kilometers Ndola-Lusaka Dual Carriage Way and the rehabilitation of the 45 Kilometers Luanshya-Fisenge Masangano Road.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, RDA, Acting Communications Manager, Anthony Mulowa said the agency anticipates that the funding will be attained by Macro Oceans Investment Limited within the projected time for the commencement of the project.

According to RDA spokesperson, Mulowa, the concessionaire has until March to seek funding for the project, but could not confirm where the funds will come from.

The Lusaka-Ndola road is a critical transport link that connects the capital city of Lusaka to the Copperbelt province, where most of the country’s mining activities take place. The current road is narrow, poorly maintained, and has become a major hindrance to trade and commerce in the country.

The construction of the dual carriageway has been on the cards for a long time, and the government promised to commence the project last year. However, the delays in funding have stalled the much-needed project, leaving the public unsatisfied.

Mulowa explained that the concessionaire still has only up to March, 2024 to secure funding adding that so far the indications have been positive.

Asked about where the source of funding is coming from and who exactly has delayed the project by not releasing funds on time, Mulowa said, “Am not aware of where they are getting the funds from but remember last time there was an issue with NAPSA so if at all they agreed, they are in business because they have been lending several businesses so if they agree on certain terms there is no problem but at the moment Macro Oceans Investment Limited has not come to us to say where they are getting the funding from and once that is done we will tell the public because definitely, this is a matter of public interest.”

Asked about the assurance that RDA is giving to the public as to whether indeed the construction of this project will commence in March when there have been several postponements and considering the fact that only days are remaining to March, Mulowa said, “We are working around the clock to ensure that the project starts after the rainy season.”

“Remember I said we have given this to the concessionaire so we don’t have much control as we are only the contracting authority so they have to come back to tell us when the funds are ready but it has to be within the given timeframe.”

“But what is so important is that they have been doing reasonable work on site because one thing that you need to know is that we have to create a diversion where cars should pass when the actuall construction start, so I think things are going just well and we are certain that we will attain our desired goal.”

Asked if RDA is likely to postpone the commencement of the construction of the road if the Concessionaire fails again to find funds during the time which has been given, Mulowa said, “We are not looking at that because we have been assured that the funding will be sourced before the time, so we are not looking at failure or whatsoever as far as we are concerned we are on course and the concessionaire is on course and has been giving us positive indications.”

Concerns are mounting as the much-needed construction

Bwin exits Zambian market after ‘$5 million investment’

An Austrian online betting brand acquired by Entain Plc has made headways in exiting the Zambian market claiming that there is a change of strategy at the group level and the focus is now shifted to a high-growth market.

Bwin the global sports betting platform was launched in Zambia in late 2022 November after seeing the booming market from the Zambian players of online betting.

Unconfirmed reports indicate that Zambia was only used by the company as a stepping stone to higher heights noting that the company has made huge profits during its 2-year time of operations in Zambia.

Speaking in an exclusive interview with the Zambian Business Times Times –ZBT, Bwin country marketing Manager Golden Ngandu, however, denied that the Company was leaving because of some irregularities which may include tax invasion and over-making a profit at the expense of the poor Zambians.

Ngandu confirmed that indeed the company has made significant progress in exiting the Zambian market as they have already given notice to the relevant regulatory boards and authorities.

He said, “As you may be aware, Bwin is part of the publicly listed company Entain plc which is our group, so now from Entain there has been a change in strategy where they have literally just pulled out of what they consider to be smaller markets and focus on high growth markets like brazil, north America so those are the areas that are being targeted now and that’s where the focus is going now.”

“So three countries are affected because that’s where the licensing was at the advanced stage we were actually making our inroads into South Africa and Kenya and Zambia as the only African Country where we were fully operational.”

Asked about the initial amount Bwin has invested in the Zambian market and what profit was realized from the investment, Ngandu said, “Over $5 million dollars had been invested in the Zambian market because we have been operating for over 2 years now.”

“Even the European there are markets where Entain has exited so it’s not necessarily out of profitability because you know as a business you give yourself targets and month on month for Bwin Zambia we were overachieving in terms of those targets but when it comes to the volume of growth, I think it’s the new strategy that the group came up with so, of course, they were some contributions in revenue but they were not up to the point that was meeting the new strategic objectives.”

Ngandu could however not mention how much profit had been realized from the over $5 million invested in the Zambian market. “what we can do is maybe allow me to get hold of the figures because I don’t want to speak to certain figures due to the different aspects of the business that we are handling. But I’ll request that your cue in a formal request to show the actual performance.”

An Austrian online betting brand acquired by Entain Plc has

SERIOES Property sold at an undervalued price by ‘K1.3m’ to Nyimba Investments Limited

The sale of Luanshya’s SERIOES International Company Limited properties, a company that was once a producer of suits for the local and international markets before the privatization era, has been rounded off by alleged corrupt deals.

Questions have risen on the alleged corrupt sale of the SERIOES International Limited Property Stand No. 1554 in Luanshya by the Office of the Administrator General and Official Receiver to Nyimba Investments Limited after it was revealed that the property was sold at a price that was lower than the reserve price by about K1.3 million .

The sale, which was finalized in May 2021, saw Nyimba Investments Limited acquire the property for K1,650,000, despite a higher offer of K2,951,000 being made by Antelope Wholesale Merchants Limited in June 2020.

According to the audit findings on the accounts of parastatal bodies and other statutory institutions for the financial year ended 31st December 2022, On 10th February 2020 Nyimba Investment Limited as seating tenants was offered to purchase property at stand No. 1554 situated in Luanshya at a reserve price of K2, 935,000.

However, the company (Nyimba Investments) responded with a counteroffer of K1,560,000 resulting in the Office of the Administrator General and Official Receiver placing an advert in the print media in May 2020 for the sale of the property at a reserve price of K2,935,000.

In this regard, on 3rd June 2020 Antelope Wholesale Merchants Limited made an offer of K2,951,000 for the property. However, it was observed that the property was finally sold to Nyimba Investment Limited in May 2021 at a price of K1,650,000 which was lower than the price offered by Antelope Wholesale Merchants Limited by K1, 301, 000.

The sale of property at a price lower than the reserve price is highly irregular and raises serious questions about the motives behind the sale.

With experts questioning the transparency and fairness of the sale process, it has also emerged that management did not provide a copy of the valuation report of the property sold, further fueling suspicions of foul play.

Reports indicate that Luanshya’s SERIOES International Company Limited was a Luanshya-based company that produced suits for the local and international markets. Suits made by SERIOES made it to the competitive European market and other international markets. It also produced various garments for the military and also exported to most of southern Africa.

SERIOES International Company Limited was also the maker of posh suits for government dignitaries such as ministers and presidents before It was sold off during the privatization era.

More details to follow…

The sale of Luanshya’s SERIOES International Company

IPP takes half a billion dollars knock after ZESCO debt write-off

Itezhi Tezhi Power Corporation – ITPC, an Independent Power Producer – IPP is on the verge of suffering serious financial losses after the power-generating corporation agreed to write off about half a billion United States dollars’ receivables from ZESCO after a protracted period of dispute, negotiation, and final arbitration.

Itezhi Tezhi Power Corporation – ITPC is a 120MW hydropower project located in the Kafue river basin in Southern, Zambia and currently supplying power to ZESCO.

ITPC’s debt with ZESCO had been allowed to accumulate to over $780 million from 2016 to 2022 due to the reluctance and dispute by the state-owned power utility Company –  ZESCO to settle the bill.

According to the statement issued by ZESCO Managing Director Victor Mapani, ITPC has since agreed to write off the receivables of close to half a billion US dollars ($453 million dollars) a situation which has raised suspicion that Tata Power Company (the co-shareholder) may have deliberately and corruptly tried to over bill the public utility ZESCO as there has been no justification as to how this huge debt was allowed to continue to grow over a period of about 7 years.

This means that the amount of debt owed by ZESCO to ITPC has been slashed down from $784 million to now only $179 million after the writing off of the whooping $453 million as well as an additional payment of about $152 million by ZESCO to ITPC in the last two years.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, ITPC Chief Executive Officer – CEO Moses Mbuta, however, highlighted that the reduction in the amount in question is a result of the revised tariff which was backdated to the time when they started supplying power to ZESCO.

He confirmed that there has indeed been a reduction in the debt owed by ZESCO admitting that there were some mathematical and business financial modeling errors that could have resulted in the miscalculation of tariffs and subsequently the total debt accrued by ZESCO.

“Yes there is that reduction and it can be attributed to two things, the first is that the tariffs were renegotiated between ZESCO and ITPC as the independent power producer, so the tariff was reduced and that reduction was back-dated to the commencement of operation date – COD which was in 2016.”

“So that entails that just by that reduction in tariff, [overall] debt was reduced and ZESCO has been servicing and has made some payments to that debt so that also caused the reduction.”

“That difference [of $453m] is because the reduction in tariff was back-dated from the time that we started selling power to ZESCO so that difference between the earlier tariff and the revised tariff is what gives you approximately that amount. The other term is to write it off but in our case, we say re-stating the account so we went back in time to 2016 and started re-invoicing using the revised tariff so that was automatic by virtual of that.” Remarked Mbuta.

When put to him that there are allegations that Tata Power and ITPC may have attempted to defraud ZESCO and Zambians since it’s a public utility?  Mbuta could not confirm if ITPC was using tricks to overcharge the power utility Company – ZESCO a situation which could have led to the loss of over $453 million in debt from ZESCO which ITPC has now let go.

ITPC is 50% owned by Tata Africa and 50% by ZESCO. The company has a 25-year concession and off-take agreement with ZESCO. More details to follow…

Itezhi Tezhi Power Corporation - ITPC, an

NATSAVE records a negative variance of over K231 million

The National Savings and Credit Bank –NATSAVE- recorded a negative variance of K231,644,774 for the financial years ended 31^st December 2020, 2021, and 2022.  

According to the Auditor General’s Report, the Bank recorded losses of K213, 131,000 in 2020, K81,679,122 in 2021, and K91, 263,164 in 2022. It was further observed that according to the NATSAVE strategic plan and budgets for the period under review, the bank had Return on Equity targets of 15%, 10%, and 19% for 2020, 2021, and 2022 respectively, but recorded negative Return on Equity of 421% in 2020, 298% in 2021 and 85% in 2022 indicating poor profitability of the Bank. “Return on Equity Return on equity (ROE) expresses profit after taxation (PAT) as a percentage of equity. It measures how much profit an entity generates for the benefit of its shareholders’’.

The Auditor General’s report further indicated that according to the NATSAVE strategic plan for the period under review the bank had Net Interest Margin targets of 25%, 13%, and 56% for 2020, 2021, and 2022 respectively. Although the Bank recorded positive net interest margins of 16% and 25% in 2021 and 2022 respectively, the margin recorded in 2022 was below the set target of 56%. “Net interest margin is a measurement comparing the net income a financial entity generates from its credit products such as loans and mortgages. It is calculated by comparing the net interest income against average earning assets”.

The bank further had a Gross Margin ratio target of 32%, 71%, and 63% for 2020, 2021 and 2022 respectively. It was however noted that the bank recorded a gross margin ratio of 33% above the set target of 32% in 2020, but unfortunately recorded Gross Margin ratios of 53% in 2021 and 58% in 2022 which were below the set targets.

With regards to Return on Assets, the bank had Return on Assets targets of -12%, 1%, and 0.3% for 2020, 2021, and 2022 respectively. “A review of the financial statements for the period under review revealed that the Return on Assets was negative in all the three years”. It was noted that the bank recorded a negative Return on Assets of 11 in 2020, 4 in 2021, and 4 in 2022. This was attributed to the losses the bank recorded in all three (3) years under review.

During the period under review, the regulatory capital of NATSAVE was negative K146,637,146 representing a deficiency of K239,085,961 below the required minimum regulatory Capital of K92,448,815 being 10% of risk–weighted assets of (K925.7 million).

The bank further recorded Regulatory Capital Adequacy ratios of 2% in 2020, negative 9% in 2021, and negative 16% in 2022 which were below the minimum 10% prescribed by Bank of Zambia. “The Capital adequacy Ratio indicates whether the Bank is stable in its meeting time liabilities and other risks such as credit, liquidity, and operations. Furthermore, it implies that depositors’ funds are protected and the bank is not at risk of insolvency”. The recommended rate by the Bank of Zambia is above 10%.

Furthermore, the Bank had equity of K50,625,514 in 2020 which was reduced to negative K27,381,782 and K107,557,184 in 2021 and 2022 respectively.

The report further indicated that a review of the suspense unclaimed fund schedule revealed that amounts totalling K1,060,040 which remained unclaimed as far back as 2009 had not been relinquished to the Bank of Zambia contrary to the Provision. It was noted in the report that “Section 160 (3) of the Banking and Financial Services Act No. 7 of 2017 stipulates that a financial service provider holding funds or personal property presumed abandoned under this section should report to Bank of Zambia on the amount and nature of such funds or property, in such form and at such time as may be prescribed by the Bank, and shall pay such funds or relinquish the property to the Bank upon expiration of a period of ten (10) years”.

In addition, a review of the 4th May 2021 Executive Committee minutes showed that NATSAVE engaged One World to pilot the bank-wide courier services including the distribution of 3000 Europay MasterCard and Visa cards. The report revealed that as of 31st December 2022, amounts totaling K374,194 had been paid to the service provider. It was however observed that none of the procurement procedures provided for under Section 37 of the Zambia Procurement Act No. 8 of 2020 were followed.

The National Savings and Credit Bank –NATSAVE-