Zupco wants govt to warehouse $16,1m debt

The Zimbabwe United Passenger Company (Zupco) is saddled with a $16,1 million debt and now wants government to warehouse it so that it can work on a turnaround strategy for the bus operator now running only 56 buses.

BY VENERANDA LANGA

Zupco acting chief operating officer, Evaristo Madangwa yesterday appeared before the Parliamentary Portfolio Committee on Local Government where he said the company’s revenue has been declining since 2013 because of the depleted fleet which they have been buying from China.

“Our total debt is $16,1 million and we owe the pension fund $2,9 million, close to $6,9 million in salary arrears dating back from 2009, trade creditors $4,8 million, $2,9 million capital expenditure for the purchase of four buses that are still embargoed by the Zimbabwe Revenue Authority (Zimra) and we are yet to pay them $376 000 for the duty,” Madangwa said.

“We hope to approach the Finance ministry to warehouse our $16,1 million debt, and warehousing does not mean that government must take over the debt, we will service our debt later, but now we are looking at paying pension arrears and just want to cede our debt.”

But MPs from the committee said it was highly unlikely that Finance minister Mthuli Ncube would agree to warehousing of the Zupco debt as he had already indicated to Parliament that warehousing was not a good way of financing.

Madangwa said Zupco, which has a staff compliment of 351 against a fleet of 56 buses, was considering staff rationalisation as the ratio must be four staffers to one bus.

“From 2011 to 2015, we managed to buy 350 buses and in 2015 we bought 50 buses using funds generated from our own operations. After importing them a Statutory Instrument was gazetted where duty was charged on imported buses and they attracted additional duty, resulting in our buses being bonded and warehoused by Zimra. We are left with paying duty for five buses ($370 000). We paid $28,3 million for the buses using our own funds,” he said.

Madangwa said revenue declined from $10,7 million in 2016 to $8,1 million in 2018.

“We last made a $3,9 million profit in 2014, and from 2015 we incurred a $2,6 million loss, and then a $9,3 million loss in 2017.

He refuted allegations by MPs that they were providing free service to Zanu PF, saying the ruling party has been paying for the services rendered.

“At the moment, we are flighting a tender process for a transactional adviser to do a due diligence for the company and guide us on selection of potential investors. The privatisation process will address our urban and rural transportation requirements. We will work with the National Railways of Zimbabwe to offer transport solutions,” Madangwa said.

Source :

Newsday

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