Zimbabwe News and Internet Radio

Austrian firm wins Harare-Beitbridge road contract

By John Kachembere

Geiger International (Geiger) has emerged as government’s partner for the $2 billion dualisation and rehabilitation of the Harare-Beitbridge road.

File picture of road construction
File picture of road construction

Although Transport minister Joram Gumbo declined to go into details about the deal saying the “time was not yet ripe” to make a formal announcement, his statements come after President Robert Mugabe had confirmed on Monday that a contractor had been found.

This publication is reliably informed that Cabinet approved the deal two weeks ago.

“They (Geiger) first have to come into the country and then we make a joint statement,” he said when pressed further on when the project was likely to commence.

Work on one of Zimbabwe’s busiest roads — carrying between 1 000 and 5 000 vehicles per day — was stalled by court processes in 2013 after the initial winner of the tender, Zimhighways, took government to court for breach of contract.

The court case was, however, withdrawn and thus leading to the submission of fresh bids for the mega project, and the Austrian-based company won the tender or mandate on the second bite of the cherry.

However, analysts say the global defence contractor and manufacturer faces a daunting task in mobilising funds for the refurbishment of the 585 kilometre-long single carriage road into a two-lane carriage way.

As it is, Geiger is reportedly seeking to leverage on its China links and specifically Shanghai headquarters for the construction of Zimbabwe’s bumpy, and dangerous major artery that had rapidly deteriorated due to increased heavy vehicular traffic.

The Harare-Beitbridge road is not only part of the trunk network in Zimbabwe, but also a major component of the north-south traffic corridor directly linking Harare and Pretoria, and providing landlocked Zambia with access to the Indian Ocean ports of Durban and Richards Bay in South Africa.

Although many have hailed the agreement between Mugabe’s government and the Austro-Sino conglomerate, observers have also expressed concern about the viability of the project and especially related to Zimbabwe’s capacity in repaying the $2 billion loan given its ever-deteriorating economic fundamentals.

“According to the proposal, we understand the parties want a 25-year tenure and this means Zimbabwe needs to pay at least $80 million a year — excluding interest repayments — but given our traffic levels and the issue of competing needs it maybe an uphill task to service the loan,” they said.

“When you look at government’s struggles in paying its monthly wage bill and other obligations such as energy imports, and all, you  can see that we may not have the capacity to take care of these obligations, especially given the current economic conditions,” analysts said.

A once-prosperous nation of 13 million people, Zimbabwe has struggled since Mugabe defeated rival Morgan Tsvangirai in a 2013 vote marked by allegations of irregularities.

The 92-year-old leader’s victory ended an uneasy power-sharing deal with the opposition, with foreign investors remaining deterred by corruption and an indigenisation policy requiring foreign-owned businesses to cede 51 percent of their shares to black Zimbabweans.

In the process, hundreds of companies have closed and at a time a devastating drought, acute cash shortages, rising unemployment and declining global metal prices have worsened matters.

Resultantly, the International Monetary Fund has slashed the country’s growth target from 2,7 percent to 1,5 percent this year.

Prior to the latest agreement, hammered out in Cabinet last week, Geiger had knocked on Zimbabwe’s doors in 2012, but it is unclear how it came unstuck. Daily News