By Ndakaziva Majaka
The Auditor-General Mildred Chiri has warned about the ability of 15 State-owned enterprises to continue as a going concern.
In her State Enterprises and Parastatals Report of 2016, the government auditor named Zesa Holdings (Zesa) and its subsidiaries; TelOne, Grain Marketing Board (GMB), National Railways of Zimbabwe (NRZ), Zimbabwe National Water Authority (Zinwa), and others as the main parastatals draining treasury without contributing anything towards the national fiscus.
Chiri pointed out that Zesa — along with its subsidiaries Zimbabwe Power Company (ZPC), Zimbabwe Electricity Transmission and Distribution Company (ZETDC), Powertel Communications (Powertel) and Zesa Enterprises (Zent) — were all operating at a loss.
“Without qualifying my opinion, I draw your attention to the fact that the company’s current liabilities exceeded its current assets by $66,1 million as at December 31, 2015 from $65,3 million
“This condition indicates the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern,” Chiri said.
She also said Zent, a Zesa subsidiary mainly involved in the manufacture and repair of power and distribution transformers and line material, had incurred a loss of $9 million at the end of 2015 up from $7 million prior year.
Another Zesa subsidiary, ZPC, is also in the doldrums, battling to service over $271,2 million foreign long-term loans at the close of 2015.
“The company’s major customer, ZETDC, was also failing to recover amounts owed to it by their customer which was affecting its ability to pay amounts it owes the company.
“This resulted in the company failing to meet its obligations as they fall due. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue operating as a going concern,” Chiri said.
Chiri said ZETDC, Zesa’s distribution and retail of electricity to the final end user, had incurred a loss before tax of $111,4 million for the year ended December 31, 2015 from $118,3 prior comparable period
“The company also had an accumulated loss of $516,6 million from $438,3 million,” the auditor-general said.
Powertel — another wholly-owned Zesa subsidiary — was also identified as one of the poor performers on the parastatals roster by Chiri, after incurring an operating loss of $549 417 for the year ended December 31, 2015.
“During the year ended December 31, 2015, and as at that date, the company’s current liabilities exceeded its current assets by $1,6 million down from $9,1 million in 2014.
Chiri recommended that the company urgently come up with sustainable revenue growth strategies that ensure profitability.
Chiri also singled out Zinwa which incurred a $13,2 million loss for the year to 2015, from $13,9 million prior period.
Chiri also said struggling NRZ could not continue on a going concern basis.
“The Railways also incurred a net loss of $59,7 million from $40,8 million contributing to a cumulative loss of $336,2 million,” she said.
The auditor also said fixed telephone operator TelOne closed 2016 with a net liability position of $111,9 million from $98,9.
Chiri also said the Zimbabwe Mining Development Corporation and its subsidiaries were also draining treasury, incurring a net loss of $10 million during the year ended December 31, 2014 from $56,5 million. Daily News