‘We have an obligation to clean up Zinara’

26 Jan, 2020 - 00:01 0 Views
‘We have an obligation to clean up Zinara’

The Sunday Mail

Due to the magnitude of corruption plaguing the Zimbabwe National Road Administration (Zinara), many reckoned that rehabilitating the parastatal would necessarily involve a root-and-branch approach.

And the board

led by Engineer Michael Madanha (MM), which was appointed in January 2019, was tasked to do exactly that.

Our Online Editor, Garikai Mazara (GM), sat down with the board chairperson (MM) and asked him about the direction Zinara is taking as well as what the future holds.

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GM: You have maintained, since your appointment, that Zinara should stick to its core mandate, that of funding road projects. Do you have road projects that you think are a priority this financial year?

MM: True, Zinara now only sticks to its core mandate, which is to fix, collect and disburse levies to the four road authorities in the country specifically for roadworks.

But let me give you the background of how Zinara was operating previously.

Because of a plethora of challenges in local authorities, from lack of capital, skills to equipment, Zinara had taken over the implementation of road projects, which was not within its mandate.

Zinara had all those, from skilled personnel, the financial muscle and the equipment, but it was not its mandate to construct and rehabilitate roads.

It was within this matrix that a lot of underhand dealings took place.

You will find that from the Grant Thornton audit report, of which US$71 million was reported to have been siphoned from Zinara, there are four classes of financial outlay that we have since categorised.

The first one was when quality roads were completely funded and done, of which the tendering process was done by Zinara, which was wrong.

Second, quality roads which were completely funded but not finished.

For instance, out of 10km paid for, you will probably find eight kilometres done to standard.

The third class involves roads that were completely paid for but were poor-quality roads, probably because of leakages either within Zinara or the contractor.

The last class of roads were paid for, but nothing was even done.

We have such roads in Chegutu, for instance.

So when we were appointed as a board, we resolved that we stick to our mandate, as defined in the Road Act, to fix levies, collect the same and disburse to the four road authorities, which are rural district councils, urban councils, the District Development Fund and the Department of Roads.

GM: Do you have road projects that you think are a priority this financial year? If you have, which roads are these and why are they top priority?

MM: Our major priority is to ensure that the Harare-Beitbridge Road is well funded for completion by 2023. Right now there are five contractors on the ground, each doing 20km, which means we have covered 100km of the almost 600km stretch. To speed up the process, we intend to engage more contractors so that by 2023 we have finished the road. The Harare-Beitbridge Highway is of prime importance to us because it is the major artery of the country, and the sooner it is completed, the easier it is to do business for the country and the region.

Besides, all provinces will also get funding according to their priority lists. Our intention is to fund at least 20km per year per province, of which each province decides which road/s get priority.

I must hasten to add that road funding is not the sole prerogative of Zinara, Treasury also has a role to play in road construction, as well as donors. You must be aware of the Makuti-Kariba 6km stretch which is being funded by Jaica (Japan International Cooperation Agency). So, in some instances, there can be multilateral funding.

GM: How does Zinara hope to tackle inflation, first in terms of revenue as collections might not match the rate of inflation? On the other hand, what a contractor proposes or submits in a budget today might not be the same value at the time of implementation. How do you hedge against such eventualities?

MM: Cognisant of the day-to-day challenges that face the ordinary citizen in general and the motorist in particular, we will review tolling fees on a bi-annual basis, but other levies like fuel levy or motor licences (would be reviewed) on a regular basis.

Similarly, when prices increase we review unit prices so that contractors are able to complete their contracts – we do contract variations.

GM: The arrangement between Zinara, the Development Bank of South Africa (DBSA) and Group Five has dominated public interest for some time, with suggestions that Zinara is struggling to meet its obligations. What is the position now and has Zinara’s financial position improved enough to be able to meet these obligations?

MM: We pay DBSA in foreign currency, and converting RTGS dollars to USD (United States dollars) is a challenge due to inflation. We have ring-fenced the transit fee levies collected in USD to service the DBSA debt, and also we engaged a transactional advisor to negotiate the extension of the repayment period.

GM: Engaging a transactional advisor? Is it not one of the vices that the previous administration was guilty of, of engaging third parties?

MM: The previous executive, without any technical know-how and back-up, went to negotiate with DBSA for that loan, which in itself was a misnomer. You cannot have managers, most of them without intimate financial knowledge, negotiating with finance people, people whose life depend on negotiating.

So the result was that Zinara was left with contracts, and not just the DBSA loan, which were skewed against the road authority. The Intertoll agreement, for example, is drawing much more than Zinara is realising. We have a situation where contractors are reviewing their stake and takings yet Zinara is not reviewing its position. Yet these agreements have provisions for reviews by either party.

By the way, such contracts are supposed to be a win-win scenario. So what we are looking at is deal restructuring, not deal reversal, mapping the way forward. And these are negotiations which we cannot handle ourselves, deals that need financially-minded people to handle.

GM: On improving revenue collection, it is a matter of public record that your board has tightened most screws on the leakages that plagued the authority. Probably the public might be interested to know how widespread these leakages were and what you have done to plug these leakages.

MM: Leakages were rampant. But of most concern to us was changing the organisational culture that was obtaining at Zinara House, where backbiting, personal wars, fighting for positions was the order of the day.

Under the CEO, we had three directors: technical, human resources and finance, and each director controlled revenue streams aligned to his portfolio.

For instance, the finance director controlled tolling, fuel levy, abnormal and overloads as well as some commissions. So he would control from the recruitment down to the collection, collation and auditing of these levies.

Similarly, the HR director would control licencing, which is about 50 percent of Zinara revenue, whilst the technical director would oversee all tenders and contracts.

So there was a deficiency of corporate culture, with each director being a demi-god, there were fiefdoms in the organisation.

When we got in as a board, the authority had gone for six months without a board and almost a year without a substantive chief executive. So the fights for power, control and the purse had reached intolerable levels.

So you find the leakages that were happening within Zinara were more of organised crime, with the floor-persons, possibly, paying illegal remittances to their bosses.

Those who were found to have crossed the line were not punished, but merely transferred from one station to the other.

But when we came on board, we sought to rectify these anomalies and so far we have not renewed contracts that had lived their full term. Some have voluntarily resigned. When all is said and done, we want to reduce our staff complement from around 650 to around 450.

So the cleaning exercise is still going on and we will not be deterred by those planting false stories about either myself or my board in the media.

We have an obligation to clean up Zinara and we are doing exactly that.

And it was just more than changing the toxic culture, we have also improved our systems to curb leakages, and actually our revenues have significantly increased.

Anyone who will be caught on the wrong side will be fired in accordance with labour laws. We are re-training our staff and restructuring and streamlining our activities. We are also reviewing our working conditions to meet workers’ expectations, to tie in with the expectancy theory. You cannot expect someone who handles your cash on a daily basis to be underpaid, so we are looking at constantly improving our staff welfare.

GM: It is also on public record that local authorities are not happy with disbursements from Zinara, what could be done to improve this relationship?

MM: Road authorities need to think outside the box and look for other sources of funding through PPPs (private-public partnerships) and BOTs (build-operate-transfer). Funds from Zinara will never be sufficient to fund the more than 98 000km of roads in the country. We will continue to increase funding to local authorities, but these funds will never satisfy all their needs. We all need to be innovative.

Zinara got into a relationship with Group Five to fund the Plumtree-Mutare highway and local authorities can copy the same example and engage in a public-private partnership.

GM: Could there be any new tollgates to be introduced on the country’s road network this year, or maybe in the foreseeable future?

MM: As I mentioned earlier, our core mandate is revenue collection, we do not construct tollgates; that is the mandate of our parent Ministry (Ministry of Transport and Infrastructural Development), they are the one who decide on new tollgates. At most, we just play an advisory role.

 

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