Zimbabwe Parliament report on ZINARA 2017-2018 audit- Part 5

Plumtree to Mutare Highway Project

304. ZINARA entered into a number of agreements to facilitate the 823 kilometre Highway from Plumtree to Mutare.
305. On 18 April 2011, Mr. F. Chitukutuku signed a Memorandum of Understanding (MOU) on behalf of ZINARA with the South African National Roads Agency Limited (SANRAL), the Development Bank of Southern Africa Limited (DBSA) and Infralink (Private) Limited.
306. The scope of SANRAL’s support services was to advise ZINARA on all aspects of Zimbabwe’s road management programme and transmission of knowledge and expertise to and capacity building of ZINARA particularly with regard to collection and management of revenue, safe and effective maintenance of Zimbabwe’s roads.
307. SANRAL was also expected to advise ZINARA on Zimbabwe’s tolling strategy and tolling policy framework and tolling legal framework as well as ways to continually address and expand road tolling in Zimbabwe into the future.
308. The MOU provided that there would be no costs to SANRAL in providing support services as SANRAL agreed to bear such costs internally except for out of pocket expenses (excluding but not limited to travel and accommodation expenses).

Development Bank of South Africa Loan

309. ZINARA, through Infralink (Private) Limited acquired a Single Currency Term Loan Facility of USD 206 600 000 with DBSA. The recipient of the loan disbursement was Group Five International.
310. The loan had the following terms, 1% of the facility amount as Commitment fee, 1.75% of the facility fees as front-end fees, interest rate of 6,18% + 3 months libor, a tenure of ten years from the first disbursement date and all taxes paid by the borrower.
311. The borrower was to repay the loan in thirty (30) equal quarterly instalments on the interest payments dates, commencing on the interest payment date occurring 30 months after the first disbursement date.

The Implementation Agreement

312. An implementation agreement between ZINARA and DBSA, Infralink (Private) Limited, Group Five International, Group Five Construction, Intertoll Zimbabwe, Ministry of Transport and Ministry of Finance was signed on 11 May 2011.
313. Infralink was a PPP, being joint venture with ZINARA owning 70% shareholding and Infralink with 30%. Infralink was bestowed with powers to implement and manage the Project and authority to procure and engage the necessary contractors and sub-contractors.
314. Group Five in its capacity as shareholder, by participation on the Board of Directors of Infralink was to assist in achieving the project financing requirements of the project and advise on strategies to optimise and periodic maintenance over the life of the projects roads.

Toll Operation and Routine Road Maintenance Contract

315. On 4 August 2011, Infralink (Private) Limited signed an agreement with Mzima Toll Road Services t/a Intertoll Zimbabwe for the collection of toll fees from the nine toll plazas along the Plumtree to Mutare Road.

Engagement and Mandate Agreement

316. This was an agreement signed on 30 June 2011 between ZINARA, Infralink and the Ministry of Transport and Infrastructure Development. In this agreement the Minister of Transport and Infrastructural Development, through the Department of Roads appointed ZINARA as an agent and representative to perform all things contemplated under the agreement within the scope of responsibility or authority of the Transport Minister.
317. ZINARA in turn appointed and engaged Infralink to implement and manage the project commencing from the commencement date until the date of expiry of the Operation and Routine Road Maintenance contract.
318. Infralink had the responsibility for the planning, design, construction, development, implementation and overall supervision of all aspects of the project.

Deed of Assignment and Charge

319. On 23 March 2012, ZINARA and Infralink signed a deed of assignment charge agreement. This spelt out that ZINARA, with full title guarantee hereby irrevocably assigns and agrees to or owing or from time to time becoming due or owing to ZINARA in the form of the road user charges.

Investor Agreement

320. ZINARA also signed an Investor agreement on 7 November 2014 with Golden Road, a private company incorporated in the British Virgin Islands. The agreement provided that:

“As and when ZINARA requires any funding, the investor shall either lend or advance the relevant project loan or procure that a financial institution selected by the investor, lends and advances the relevant project loan to ZINARA.”

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