Mnangagwa bullish on TelOne future prospects

Mnangagwa bullish on TelOne future prospects
Published: 17 March 2019 (253 Views)
The professionalism of TelOne's management, including their determined push to turnaround the State-owned enterprise (SOE), will likely be a drawcard for reputable technical partners or suitors, President Emmerson Mnangagwa has said.

Last week, TelOne commissioned a US$23,6 million National Backbone Fibre Link in Beitbridge, which connects Zimbabwe to the rest of the world through South Africa.

The project was financed through a facility from China.

President Mnangagwa said the parastatal had used the funds for the Government "initiated and guaranteed project" in a prudent manner.

He implored all public entities to "take a leaf from this good example and instil a culture of good stewardship, hard honest work, accountability and transparency in the completion of national projects".

"The days of incomplete projects and non-payment of loans are over. TelOne (Pvt) Limited is one of the companies that my Government has put forward for partial privatisation.

"I am confident that this robust infrastructure we are commissioning today (last Wednesday) will help the company to attract the most suitable strategic partners," said President Mnangagwa.

Need for Parastatals Reforms

TelOne, which was assisted by Government to get a US$98 million loan from China Eximbank for the National Broadband Project, is one of the 41 public entities that will be restructured.

Government hopes to not only cut its investment into loss-making parastatals, but to spruce them up for credible suitors.

In 2016, 30 out of 93 State-owned enterprises (SOEs) that were audited recorded a staggering loss of US$270 million due to weak corporate governance systems and ineffective control mechanisms.

Zimbabwe has 107 parastatals and most of them have become "money-spinning machines" for top management despite their unenviable financial position.

Government is determined to restructure these entities through full or partial privatisation, listings on the Zimbabwe Stock Exchange, mergers and liquidations.

Parastatals milking the fiscus

There is growing concern that while parastatals often queue at Treasury for financial rescue, they routinely fail to turnaround the fortunes of their ailing businesses.

However, President Mnangagwa said last week his administration will not tolerate either poor performance or failure to complete targeted projects.

TelOne was reportedly able to account for every penny used from the US$98 million facility.

TelOne managing director Mrs Chipo Mtasa said of the US$98 million, a total of US$23,6 million was used on the National Backbone Fibre Link while the rest of the funds went to the establishment of Data Centres in Harare, Bulawayo and Mazowe, as well as upgrading the entire voice/broadband systems and some access systems.

The National Backbone Fibre Link project - which was completed in 18 months - was jointly implemented by Huawei Technologies of China and TelOne engineers.

Some of the subcontractors who worked on the project include Best Group, RH Engineering and Pachedu.

Upstream internet bandwidth service providers, through whom the connectivity to the rest of the world was facilitated, include the West Indian Ocean Cable Company (WIOCC), Telkom of South Africa, TDM Mozambique (for provision of backhaul services) and Orange France.

Government Target

Government announced last year that at least 11 SOEs will be privatised under the public enterprises reform framework for 2018-2020, while some will be liquidated, merged or departmentalised as enunciated in the Transitional Stabilisation Programme (TSP).

Two SOEs and three IDC subsidiaries will be liquidated, while 11 entities will be merged and seven departmentalised into line ministries.

Other measures include demerging the Grain Marketing Board (GMB) into a commercial business unit and the Strategic Grain Reserve, promulgation of the Civil Aviation Amendment Bill to provide for the unbundling of the authority into a regulator and an airports authority.

Government recently said an institutional support for parastatal reform framework was being put in place to ensure deserving entities get funding under the $3,2 million grant from the African Development Bank.

Performance reviews will assess in detail the concerned SOEs' governance system, financial, operational, legal environment, processes and procedures affecting them.

These entities include Agribank, Allied Timbers, SMEDCO, Zinara, SIRDC and IDBZ.

The European Union has also availed funding for the performance review of an additional three SOEs - the Forestry Commission, the Zimbabwe Parks and Wildlife Management Authority (Zimparks) and the Environmental Management Agency (Ema) - under the natural resource programme. CMED, Arda, Printflow and Natpharm will also be put under performance reviews.

- zimpapers

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