Wednesday, April 24, 2024

New Lusaka-Ndola Dual Carriage Way: A PPP or a Scam? Emmanuel Mwamba Weighs In

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The New Dawn Government of Zambia has 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. The deal has sparked a debate on whether it is a Public-Private Partnership (PPP) or a scam.

At the Launch Ceremony held at Protea Hotel in Ndola, Ministers went to a great extent to demonstrate that Government “would not spend any money on the project” as this was a PPP. “The Concession Agreement has secured a revenue-sharing mechanism during the concession period. The road will have toll gates and upgrade of two weigh bridges being fully funded by the concessionaire from construction to maintenance,” said Minister of Infrastructure and Housing, Hon. Charles Milupi.

Public-Private Partnership (PPP) is a partnership between the public sector and the private sector, forged for the purpose of delivering a project or a service traditionally provided by the public sector. “In the road sector, whilst toll concessions are one form of PPP, tolls should not be considered synonymous with PPP, as there are many instances of publicly financed roads carrying tolls,” explained Amb. Emmanuel Mwamba in his article.

“It is for this reason that Zambia High Ways now carry toll plazas and the roads remain publicly funded and does not have a private partner,” he added.

The financing structure of the Lusaka-Ndola Dual Carriage Way is another issue of concern. “Let us be clear, both NAPSA and Workers Fund Compensation Board are public pension schemes and are public institutions. This is a publicly funded project with $200million proposed to be sourced as a loan contracted from a private bank by Government!” exclaimed Mwamba.

He further highlighted that “NAPSA was formed through an Act of Parliament to provide income security against the risk arising from retirement (old age), death and invalidity with a focus on adequacy of benefits while the WCFCB is a social security scheme responsible for compensating workers in respect of accidents suffered and diseases contracted during the course of their duty.” Thus, the use of public pension schemes to finance a PPP has raised questions about the government’s intentions and the accountability of such partnerships.

There are different models of PPPs, as Mwamba noted in his post. “The purpose of entering into a PPP project is to free Government resources and provide for other urgent social needs but use the opportunity to access private-sector financing to build public infrastructure.”

He also explained that “the private sector then recovers their money through tolls or user charges of the road or Government takes the burden and picks up the tab as a public debt and pays the private partner through taxes.”

Another well-known model is where the private sector finds the investment to finance, build, and operate the project. But Government or the Public partner then retains ownership of the assets after the expiry of the lease or concession period.

As the debate on the Lusaka-Ndola Dual Carriage Way deal continues, it is important for the government to address the concerns raised by the public and provide transparency in the partnership. As Mwamba stated, “the success of PPPs is dependent on transparency, accountability, and mutual respect between the public and private sectors.”

26 COMMENTS

  1. Emmanuel, do not pretend not to know how projects are financed in many other countries. We had 3 options here. 1. To finance the project from our budget which is a none starter; 2. to borrow from same shylocks which is a none starter since we are trying to get out of one and 3. to go PPP way. i think the option is the best especially that they are also going to maintain the same road. So do not condemn everything from government

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  2. “the success of PPPs is dependent on transparency, accountability, and mutual respect between the public and private sectors.”
    I ABSOLUTELY CONCUR WITH YOU ON THIS ISSSUE – THE PPP OR SCAM!!! CONTINUE SHADING MORE LIGHT.

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  3. When greed and dishonest take center stage of any negotiations, it overshadows logic. The UPND are saying the PF’s US$1.2BN deal was a scam as compared to their US$577M. If the UPND deal is clean then why have they given a 25yrs concession? Surely, if it were clean we should expect a shorter concession period. Why should Zambians be made to pay for that long period on a well negotiated deal? These people can’t think properly

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    • That’s what Millipede wants you to believe and by the time you realize it, the situation will have worsened.

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  4. Continue asking those questions which you know answer to whilst hh and his family comtinue stealing to enrich their ego

  5. People who keep bashing the PF’s 1.2 billion are conveniently forgetting this was an outright construction and the road would be owned by Zambia. This 577 million is privatisation of roads in which we don’t own the roads for 25 years. And depending on the language of the contract, they can extend it to recoup their investment and more.

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  6. There are a multitude of different innovative ways one can employ to mobilise resources for infrastructure. We don’t have to always look at what we have done. THE UPND has chosen one way. If PF feel, given our bankrupt position they have a better alternative, they should outline that with sufficient detail instead of just trying to cast aspersions on what others are doing.

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  7. PF supporters love debt or nkongole.
    “People who keep bashing the PF’s 1.2 billion are conveniently forgetting this was an outright construction and the road would be owned by Zambia.”
    Zambia assets like Kafue Gorge Lower dam and ZNBC are essentially owned by China because of the PF debt.
    They can grab those assets if they choose.

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    • F00Iish woman. It can’t point us to any legal agreement that allows China to take ownership of any of our parastatals. Propaganda and lies is the order of the day for upnd supporters. You are learning from your f00Iish cheating president. Most of these upnd cadres are in diaspora so they don’t care for you Zambians who are suffering. Moon yellow yako independent

  8. Is it that some Zambians are arithmetically illiterate or their thinking has been clouded by political affiliation? This road will cost a total of $1,177,000 of which $600,000,000 will be borrowed by GRZ at 9.5% interest whilst $577,000,000 will be MOICs (whoever they are) investment to be recouped over 25 years through tolls and other levies. Last time I checked it cost $26,000,000 per km for a proper dual carriageway. Makes you wonder what sort of road we are getting. If UPND sycophants for once tried to think critically they would be asking whether this a good deal for Zambia?

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    • I totally disagree with your assumptions.
      1. GRZ IS NOT INVESTING INTO THIS ROAD AT ALL AND THEREFORETHEY ARE NOT PAYING INTEREST AS YOU PERCEIVE. IT IS THE PRIVATE EQUITIES THAT ARE MAKING THE INTEREST IE NAPSA ETC @ 9.5%.
      2. IS THIS RETURN OF 9.5% BETTER FOR NAPSA AND THE PENSIONERS THAN THE WHITE ELEPHANTS LIKE LEVY MALL AND SOCIETY HOUSE ? AT LEAST RETIREMENT PAY OUTS MAYBE BETTER REWARDING.
      3. THIS IS THE MODEL THAT MOST COUNTRIES NOW USE TO FREE UP DEBT BORROWING BY GOVERNMENTS.
      4. IN ADDITION THEY HAVE TO MAINTAIN THE ROADS FOR 25 YEARS THAT OUR GRZ HAS FAILED SINCE INDEPENDANCE. THEY CAN NOT EVEN FILL A POT HOLE PROPERLY. WHERE IS THAT MONEY SUPPOSED TO COME FROM IF THEY HAVE TO PAY OFF LOANS WITH INTEREST ?

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    • @TURAY. First of all have some online etiquette and refrain from using capital letters when making comments to posts online. It makes you look primitive. Who are you upset with?

      Secondly I’d like you to increase your knowledge base by reading up on what PPPs entail. In this case we MOIC, comprising AVIC International Project Engineering Company, Zhejiang Communications Construction Group Co Limited and China Railway Seventh Group Co Limited, and public NAPSA and WCFCB. Both are putting in money, yes, but who are NAPSA and WCFCB lending the money to? MOIC or GRZ? Also look closely at the table above and you will note that it’s a debt paid at 9.5% interest per annum.

      Maybe am missing something and you know more about this deal than me.

    • Firstly, apologies for the capital letter, realized after the message was written and did not want to go back;;;;
      At least you have some great knowledge. The main concern, for me, is Napsa. How are they benefitting from this deal, which inevitably affects all of us. If Napsa and all ” investors” are getting their money back with a 9.5% per annum return over 25 years then is not a good arrangement as far as Pensions are concerned? Is it not a safer arrangement than borrowing from an foreign source?
      You certainly are clues up on some of these areas ;;;;

  9. The much needed Ndola-Lusaka dual carriage road needed to be done during PF period. They failed whatever model they intended to employ. Today PF can not be listened to in what ever manner, type and fashion they present their concerns over it will not yield anything. They should have even constructed 100 metres of a road model for Zambians to see. The snake along Ndola-Lusaka road is bad to be a model.

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  10. I totally disagree with your assumptions.
    1. GRZ IS NOT INVESTING INTO THIS ROAD AT ALL AND THEREFORETHEY ARE NOT PAYING INTEREST AS YOU PERCEIVE. IT IS THE PRIVATE EQUITIES THAT ARE MAKING THE INTEREST IE NAPSA ETC @ 9.5%.
    2. IS THIS RETURN OF 9.5% BETTER FOR NAPSA AND THE PENSIONERS THAN THE WHITE ELEPHANTS LIKE LEVY MALL AND SOCIETY HOUSE ? AT LEAST RETIREMENT PAY OUTS MAYBE BETTER REWARDING.
    3. THIS IS THE MODEL THAT MOST COUNTRIES NOW USE TO FREE UP DEBT BORROWING BY GOVERNMENTS.
    4. IN ADDITION THEY HAVE TO MAINTAIN THE ROADS FOR 25 YEARS THAT OUR GRZ HAS FAILED SINCE INDEPENDANCE. THEY CAN NOT EVEN FILL A POT HOLE PROPERLY. WHERE IS THAT MONEY SUPPOSED TO COME FROM IF THEY HAVE TO PAY OFF LOANS WITH INTEREST ?

  11. It’s a scam and not much different from the PF debts. At the end of their tenure it will be revealed that these chaps are actually the PPP themselves.

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  12. Firstly, apologies for the capital letter, realized after the message was written and did not want to go back;;;;
    At least you have some great knowledge. The main concern, for me, is Napsa. How are they benefitting from this deal, which inevitably affects all of us. If Napsa and all ” investors” are getting their money back with a 9.5% per annum return over 25 years then is it not a good arrangement as far as Pensions are concerned? Is it not a safer arrangement than borrowing from a foreign source?
    You certainly are clued up on some of these areas ;;;;

  13. Mwamba focus on your case with ACC. Leave these matters to those of us who will be driving on this road while you are in orange overalls.

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  14. Its you whose arithmetic is illiterate. How can a road costing $1,177,000 have $600,000,000 of the cost borrowed by GRZ at 9.5%?
    Are you one of the govt beneficiaries of this contract deliberate to confuse us?

  15. Its you whose arithmetic is illiterate. How can a road costing $1,177,000 have $600,000,000 of the cost borrowed by GRZ at 9.5%?
    Are you one of the govt beneficiaries of this contract deliberately wanting to confuse us?

  16. Turay and will saywhatiwant have shade more light on this concession. This is the information that miss chushi kasanda should be disding out to keep us well informed. Furthermore it’s a pity that politicians and praise singers conveniently choose information what to release from both the new project and the old one in order to suit their narrative. It would be interesting to know what are other infrastructure apart from the road itself would have been under pf and also on this one.

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