Joram Gumbo issues statement on Zimbabwe Airways and dualisation of Beitbridge-Harare Road

B. Implementation of Cabinet Decision

          Mr. Speaker Sir, in implementing the Cabinet decision the then Minister of Transport, Communication and Infrastructural Development, Hon. Goche:

       i.            established the new airline under the Companies Act [Chapter 24:03] which was registered as Zimbabwe Airways (Pvt) Ltd, registration number 3015/2012.  This name was adopted because during name searching at the company Registration Office, it was noted that the name Air Zimbabwe (Pvt) Ltd was already registered.  The new airline obtained an Air Service Act Number 13 of 2012 valid for the period April 2012 to April 2015.  The First directors of the company as per the requirements of the Companies Act were Mr. Andrew Bvume from the Ministry of Finance and Economic Development and Ms. Angeline Karonga from the then Ministry of Transport, Communications and Infrastructural Development.  The Secretary was Mr. Luckson Madzinga from the then Ministry of Transport, Communications and Infrastructural Development;

    ii.            established an interim board and the board was chaired by the then Permanent Secretary in the Ministry of Transport, Communications and Infrastructural Development, Mr. Patson Mbiriri.  Other Members of the Board were Permanent Secretaries in the Ministries of Finance and Economic Development, State Enterprises and Parastatals, Tourism and Hospitality, Environment and Natural Resources Management and Industry and Commerce; and

 iii.            authorised the engagement of Ernst and Young Zimbabwe on 14th May 2012.  The consultants’ terms of reference, among other things included developing business model for the new airline, validation of the assets and liabilities, identification of potential strategic partners and evaluating the best approach in establishing the new airline.

C. Findings by the Consultants

          The Consultants presented the Air Zimbabwe challenges which were mainly emanating from the following factors:

         i.            huge debt overhang which made the entity unattractive for strategic partnership.  The debt rose from unpaid creditors and interest on debt which accrued every month.  The debt then was sitting at US$282 million. Among the creditors were workers who were owed salaries and retrenchment packages;

      ii.            There was mismatch between the Airline’s fleet and its huge staff complement; and

   iii.            the airline possessed an old fleet that was expensive to operate, the new airline hence would only agree to render services to the new airline as a premium.

Following these recommendations, the Minister then shelved the operationalisation of the new airline while the Ministry engaged the Ministry of Finance and Economic Development on the debt issue.

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