Road Transport and Safety Agency (RTSA) has said that Government will NOT spend a single penny from tax payers’ money or the treasury on the new project to manage the Traffic System in Zambia as the concessionaire takes all the related risks and expenditures.
Yesterday it was made public that Zambia had awarded Austria’s Kapsch TrafficCom AG a joint venture contract to design, install and operate a road traffic surveillance system to curb accidents under the PPP model as prescribed in the PPP Act of 2009.
Accrding to the statement , this is the first PPP project to ever be finalised in a very short period of time with the Kasumbalesa Boarder Post PPP project being one of the first ever two PPP projects to be implemented in Zambia since the PPP Act was assented on the 26th of August 2009.
The project follows the Build Operate Transfer (BOT) model which means the whole project will eventually be owned by the Zambian Government through its Agency the Road Transport and Safety Agency (RTSA).
In a BOT Project the project company or operator generally obtains its revenues through a fee charged to the utility/ government rather than tariffs charged to consumers.
In common law countries a number of projects are called concessions, such as toll road projects, which are new build and have a number of similarities to BOTs.
Following the tripled number of vehicles on Zambia’s – 700,000 in the 10 years to 2016, Government has been concerned with the increasing road fatalities.
In 2016 alone, 2,206 people died in traffic related accidents.
The Zambian Government, through RTSA has therefore partnered with Kapsch TrafficCom whom they have awarded a nation-wide concession contract to improve road safety and traffic management in Zambia under a 50:50 joint venture with Lamise Trading Ltd in an effort to significantly increase road safety and traffic management.
A Concession gives a concessionaire the long term right to use all utility assets conferred on the concessionaire, including responsibility for operations and some investment.
Asset ownership remains with the authority and the authority is typically responsible for replacement of larger assets.
Assets revert to the authority at the end of the concession period, including assets purchased by the concessionaire.
The scope of work for Kapsch will include design, installation and operation of systems and solutions for traffic surveillance, vehicle speed enforcement, vehicle inspection and vehicle registration which will be realized step by step during a ramp-up phase as a part of a 17-year contract.
The project is expected to create over 500 jobs and provide a boost to the economy through improved road transport, and reduced number of traffic accidents.
The projected revenues for the first three years of operation is in the range of EUR 90 million to EUR110 million.
In a PPP arrangement, the private sector in return receives financial remuneration in form of concession fees, user fees, or any other form of repayment that maybe agreed upon with the Government. In this process, the Government retains a significant role in the partnership as the main purchaser of services or the main enabler of the project.