Zupco debt stands at $19 mln, new fleet driving recovery

Zupco debt stands at $19 mln, new fleet driving recovery

HARARE,  May 27 (The Source) –  Government transport operator, the Zimbabwe United Passenger Company (Zupco) has a $19,7 million debt and has resorted to using part of its monthly income to clear it, Parliament heard on Tuesday.

Presenting oral evidence before a parliamentary committee on local government, rural and urban development, acting Zupco chief executive Tendai Masaire said there had been “mismanagement” in the area of liabilities, a culmination of  unpaid debts to creditors and workers, outstanding salaries and a large pensions deficit.

“It (Zupco) has been making losses over the years but it’s heartening to note that from 2012, the losses have been decreasing because of the 305 buses acquired since 2011,” Masaire said.

Last year alone, the company had purchased 101 buses. The company’s total assets are valued at $39 million as at December last year, he added.

Acting local government secretary, Joseph Mhakayakora said Zupco had a  pensions contributions deficit of $1,2 million and had agreed with the Insurance and Pensions Commission  (IPEC) to produce a payment plan by June 30.

However, the pensions fund had $556,000 in its accounts, which would be paid out to pensioners, he added.

The board chairperson, Chipo Dyanda said 30 percent of the company’s monthly revenue would be committed to recapitalisation, with 12 percent of that going towards debt repayment.

“The strategy that we came up with was to save 30 percent of all revenue that comes into the company to the recapitalisation account. The remainder will be left for operations,”  Dyanga said.

“We save $800,000 every month towards the recapitalisation. In 2014 we want to clear the debts and  recapitalise. . We have set aside 12 percent to liquidate the debts which are being liquidated on a daily basis.”

She said so far the company had increased its fleet from 18 buses in 2011 to the current 305, although 65 buses were grounded.

Zupco officials were also quizzed about high turnover of chief executives after the company appointed four CEOs in a decade.

MP for Buhera South, Joseph Chinotimba asked why sacked CEOs were getting packages, including vehicles. He also wanted to know why Zupco was engaging technicians from China when it employed its own.

The operator employed a team of FAW technicians in 2011 when it imported buses from China, who are staying in the country at Zupco’s expense.

“How do you pay for external services yet you have your own people?” Chinotimba asked.