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Tuesday, January 25, 2022

Hon Charles Milupi is abusing the Public Private Partnership Projects

Columns Hon Charles Milupi is abusing the Public Private Partnership Projects

By Amb. Emmanuel Mwamba

Minister of Public Infrastructure, Hon Charles Milupi has announced that the Public-Private Partnership Council has approved a 25-year Concession Agreement with a Private Company called Nkula Zambia in partnership with South Africa Business Development Forum to do roads in Western, North-western and Copperbelt Provinces.

According to this package dubbed “Development of the Western Province Trade Facilitation Routes inclusive of Resettlement Schemes and Border Facilities”, the Finance, Design, Construct, Rehabilitate, Operate, Maintain And Transfer Public Private Partnership Model, will cover a total of 2,208.5 kilometres of core road network.

Some roads will be neq construction while others will be upgraded to international bituminous standards.

Hon. Milupi listed the roads as follows;

1. Tapo – Kalabo – Sikongo – Angola Border Road (125km).
2. Sioma – Shangombo Road (175km).
3. Lufwanyama – Kankolonkolo – Kasempa Road (225km).
4. Kasempa – Kaoma Road – Luampa Junction (280km).
5. Luampa Junction – Machile – Simungoma Road (340km).
6. Livingstone – Katima Mulilo Road (225km).
7. Resettlement Roads (minimum of 500km).
8. Shangombo Bridge (approximately 8.5km).
9. Sikongo Border Post and Trade Hub.
10. Shangombo Border Post and Trade Hub.
11. Katima Mulilo Border Post and Trade Hub.

It is strange that a 25-year Concession has been given to a private company to build and run these roads in a non-competitive, opaque and non-transparent manner and whose value has not been disclosed.

The Concessionaire will seek financing and obtain a loan under the direct or indirect guarantee of the Republic of Zambia.

Looking at the roads, it appears that these are best done under public sector financing as they are non-economical but developmental in nature.
PPP roads are highly commercial and are financed by the private sector.

The return of investment is guaranteed by traffic volume that will help repay the loan through tolling or annuities.

Further, the value of the project has not been disclosed.

This is important as the private company involved will obtain the loan against the Republic of Zambia and the road assets and business plan on how to repay the loan, will act as collateral security or Government may issue a sovereign guarantee.

I noted that in South Africa, there are two models of PPP adopted for the development of national highways.
They are; Build–operate–transfer or, Build–own–operate–transfer.

This is a form of project delivery method, usually used for large-scale infrastructure projects, wherein a private entity receives a concession from the public sector to finance, design, construct, own, and operate a facility stated in the concession contract.

The mechanism to recover the investment is through BOT (Toll) or BOT (Annuity).

(a) BOT (Toll) Model: In the BOT (Toll) model, the Concessionaire recovers his investment by charging toll from the users of the road facility. This model reduces the fiscal burden on the government while also allocating the traffic risk to the Concessionaire. This is the model used for most of the projects and can be regarded as the default model for highway projects.

(b) BOT (Annuity) Model: Under a BOT annuity model, the Concessionaire is assured of a minimum return on his investment in the form of annuity payments. The Concessionaire does not bear the traffic risk and the Government bears the entire risk with respect to toll income.

CONCLUSION

From the above, it is clear that until the terms and conditions are disclosed, and until the commercial viability of this project are demonstrated, this may be a conduit to obtain a large international loan on the charge of the Treasury.

Hon. Milupi or the Council of PPP should not abuse their offices. They have a noble duty to disclose the value of this loan, and guarantees that Zambia is expected to give.

In my view, Hon. Milupi has chosen to undertake roads in his constituency and his province under an opaque process whose cost burden will be borne by the country.

If he genuinely wishes to do viable PPP projects, he should follow Zambia’s renowned trade routes such as the Lusaka-Chirundu, Lusaka-Livingstone, Lusaka-Ndola-Mufulira, Kapiri-Serenje-Mpika-Nakonde, and similar roads that are in an extremely dilapidated state but are core to trade/sea routes of the country.

20 COMMENTS

  1. The model of road development Charles Milupi and the UPND are adopting is far better than the corruption ridden road construction done under the PF. Zambia is trapped in huge national debt cause of reckless ECL and the PF.

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  2. The desperation of Emmanuel Mwamba is just sickening–just goes to show that this was a bunch of individuals who can not survive outside of politics–no real skill set to talk of and hence this pathetic display–analysis that is just shallow and totally misinformed; and we have to be subjected to this nonsense on almost daily basis. Get a life man.

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  3. In Zambia if you steal a goat you will surely get a sentence of more than 3 years but steal millions from government and you only get 1 year sentence of which you will only serve about 6 months if not less.

  4. Elections are useless where these no competition. You simply choosing one side of the same coin.
    The job of the politician is not to serve the poor, it is to serve themselves, their business partners, funders and their families.
    Don’t believe what you read in the papers, these politicians whether from govt or opposition are all friends with an exception of jealousy at times but overall there kids go to the same schools and their inter-marrying amongst themselves.
    There closer than you think. Citizens role in politics is just to vote and remain poor. 6 months as an MP is enough to be a millionaire. Whose serving who?

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  5. That’s I don’t vote…. you literally create someone and that someone suddenly becomes a god. That’s how PF started…panono panono until BOOM

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  6. So according to Ba Emma, we are so gullible that we have to believe that he is an expert on everything to do with governance? My brother…please sit down and drink some water. Give us some breathing space. Day in day out we have to be subjected to your rantings about anything and everything.

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  7. These politicians should stop dribbling us. Was this PPP not started by PF? why is it rotten now that UPND is executing it? The other day I was reading an article showing KK international as ECL legacy, I mean surely it’s common knowledge that these projects were a continuation from Mwanawasa through RB and then MS hijacked and renamed the Airports. Remember the noise people made when RB wanted to build a new state house? UPND should renovate state house and bring it to the 21st century. LT you have a duty to look through your archives and correct some of your publications.

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  8. The problem is not the PPP. The ‘real’ issue of concern for Mwamba are the provinces concerned…..North Western and Western Provinces. Look at Mwamba yapping about how uneconomic the project is. Someone should remind him that the majority of Zambia’s copper exports are transported from North Western province via Western province to the port of Walvis Bay. What is uneconomic is to transport copper from North Western Province through Nakonde to Dar es Salaam.

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  9. This milupi is a very canning thief. We warnedyou that the stealing in upnd will be done in such a way that if you have never been to school you won’t know it is happening. Some of us know how crooked hh is

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  10. It is a real problem to articulate issues convincingly when you did not artculate the same issues when you were a senior goverment officle in the past goverment…………

    That is the problem mwamba is facing……

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  11. flag Jigga Kayama Simangulungwa (formerly Corruption scandals: 48 Houses Social Security Cash Luxury Presidential Jet Ambulances Fire Trucks Mukula Trees Ndola-Lusaka Rd Malawi Maizegate Fuelgate Swaziland landgate Zesco Loans Honeybee)

    This dude living in South Africa for few years and he thinks he knows it all. Who is he educating about tolls with his copy and paste Internet toll 101?
    What is he saying in this us€less article? Don’t build roads in Western and N/Western provinces and instead continue building in the cities? Malabishi!

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  12. flag Jigga Kayama Simangulungwa (formerly Corruption scandals: 48 Houses Social Security Cash Luxury Presidential Jet Ambulances Fire Trucks Mukula Trees Ndola-Lusaka Rd Malawi Maizegate Fuelgate Swaziland landgate Zesco Loans Honeybee)

    And does this guy even know how much Zambian businesses have to pay through for shipping through Dar es salaam and Durban ports and in turn they have to pass the same fees on to the consumer? The untapped business potential doing business with Angola is massive. Education and healthcare are some of the services we could be exporting to the Portuguese speaking Angolans. What about trade routes to South and North America? Look at your atlas world map s!lly!

  13. flag Jigga Kayama Simangulungwa (formerly Corruption scandals: 48 Houses Social Security Cash Luxury Presidential Jet Ambulances Fire Trucks Mukula Trees Ndola-Lusaka Rd Malawi Maizegate Fuelgate Swaziland landgate Zesco Loans Honeybee)

    This dude living in South Africa for few years and he thinks he knows it all. Who is he educating about tolls with his copy and paste Internet toll 101?
    What is he saying in this us€less article? Don’t build roads in Western and N/Western provinces and instead continue building in the cities? Malabishi!
    Does this guy even know how much Zambian businesses have to pay through for shipping through Dar and Durban ports and in turn they have to pass the same fees on to the consumer? The untapped business potential doing business with Angola is massive. Education and healthcare are some of the services we could be exporting to the Portuguese speaking Angolans. What about trade routes to South and North America? Look at your atlas world map brother! Please shut the funk up and sit down!

  14. flag Jigga Kayama Simangulungwa (formerly Corruption scandals: 48 Houses Social Security Cash Luxury Presidential Jet Ambulances Fire Trucks Mukula Trees Ndola-Lusaka Rd Malawi Maizegate Fuelgate Swaziland landgate Zesco Loans Honeybee)

    And does this guy even know how much Zambian businesses have to pay through for shipping through Dar and Durban ports and in turn they have to pass the same fees on to the consumer? The business potential doing trading with Angola is huge. Education and healthcare are some of the services we could be exporting to the Angola. What about trade routes to South and North America? Look at your atlas world map brother!

  15. IT’S A GRAND IDEA TO HAVE THOSE ROADS DONE.
    MY ONLY HOPE WAS THAT THE NEW DAWN WOULD PRIOTIZE THE BUSY ECONOMIC ROUTES OF LIVINGSTONE- LUSAKA, CHIRUNDU- LUSAKA, LUSAKA -NDOLA,CHINGOLA-SOLWEZI , NAKONDE -KAPIRI WHICH ARE HANDLING HEAVY TRAFFIC. THESE MAJOR ROADS ARE HANDLING MOST SADDC CARGO ESPECIALLY WITH THE OPENING OF KAZUNGULA BRIGE AND RECEIVING TOLL FEES BUT ARE NOW AT THE BACK.
    IT’S A SHAME THAT PRIORITY IS NOW BEING SHIFTED!!
    ALSO MOST TRAGIC TRAFFIC ACCIDENTS ARE ON THESE MAJOR ROADS
    LUSAKA -COPPERBELT- SOLWEZI SHOULD BE PRIOTIZED
    TIME WAITS FOR NO MAN

  16. Mr Emmanuel Mwamba, this government knows what it is doing & the majority Zambians have trust in its work.

    They are different from you and your PF whose sole aim of getting into politics was looting and stealing public money for 10 years…

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