HARARE – Government is targeting a capital injection of nearly US$400 million by investors towards the revival of two struggling parastatals, meat processor, Cold Storage Company (CSC) and public transporter, the Zimbabwe United Passenger Company (Zupco, a cabinet minister said on Tuesday.
Revival of the two parastatals is part of long term plans to reform state-owned enterprises through commercialisation, privatisation or partial privatisation, which is expected to aid the economy’s overall recovery.
Finance and Economic Development Minister, Professor Mthuli Ncube said a United Kingdom-based firm, Boustead Beef, had been secured to revive the CSC and was expected to pour in over US$130 million into the company over a five year period.
The firm will get a 25 -year concession to recoup its investment.
“We agreed that they should invest at least US$130 million over a five-year period and we think that over a 25-year period they should be able to recoup their US$130 million and then give it back to government,” he told journalists at the 16th post-Cabinet briefing.
Questioned on the duration of the deal, Ncube said the “25 years is a typical concession period for most concessions.”
“The upside is enormous and we should not be worried about the concession period. We will be able to get value for money on this,” he said Besides reviving CSC’s dwindling cattle herd, which was less than 350 in 2017, Boustead Beef will also re-open the firm’s derelict abattoirs, meat processing and canning factory as well as tannery.
Thousands of jobs are expected to be created.
“The company will employ people and will start exporting to China, Botswana and Angola. The benefits are incredible for the economy…” Prof Ncube said.
While government, as sole shareholder, is in the meantime pushing the rejuvenation of Zupco on its own, it is in the medium term targeting to offload 49 percent of its stake in the transporter to a private investor, Ncube said.
The government expects to sell the stake for up to US$250 million.
With 39 buses having been delivered already under the revival programme, the finance minister said 200 buses were expected to be delivered from South Africa and 100 from China.
Talks for 500 more from Belarus were still on-going, he said.
“Our intention is to have a target of a thousand new buses. When Zupco is in full flight, when the new partner comes in, we expect the bus fleet to grow to about 3 000 and higher,” Prof Ncube said.
He said Zupco was integral to government’s plan to have a functional mass transportation system in the country.
“We have no difficulty offloading the 49 percent, but we want a cash injection of no less than $250 million into the company through that sale of equity and that will go a long way in revitalising the infrastructure,” he said. – New Ziana