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Air Zimbabwe bailed out by govt departments
27 Jun 2017 at 07:23hrs | Views
Various government departments loaned insolvent Air Zimbabwe over $8 million to bankroll its operational expenses in the 2016 financial year.
The Auditor-General (AG) Mildred Chiri revealed this in a forensic report of government departments' revenue statements and fund accounts for the year ended December 31, 2016.
The AG established that the New Number Plate Revolving Fund (Fund) - established to import blank registration plates and to sell plates to vehicle owners - had extended $7 million to the struggling airline.
"The Fund advanced $ 7 578 660 to Air Zimbabwe for its operation expenses and total loans amounting to $36 492 777 have been issued to date," the AG said in her findings.
"The constitution of the fund has no provision for issuance of loans to related parties. Air Zimbabwe has over the years been unable to make any repayments towards the reduction of the debt."
"The accumulation of the Air Zimbabwe debt poses a financial albatross to the fund and may have negative effect on its operations."
Chiri added: "The Fund's management should avoid straying from its core business and the loans made to Air Zimbabwe should be recovered."
In response, the fund's management said the Transport ministry okayed the loans.
"Loans to Air Zimbabwe made during the year under review were done with the blessings of the ministry," the management said.
It also emerged that the Meteorological Services Fund, established to facilitate the provision of weather services and related products, had also loaned hundreds of thousands of dollars to the ailing airline.
The Meteorological Services Fund is owed $1 684 443 by airline operators, a figure which represents 92 percent of the total assets of the Met Fund.
"The debtors who owe the fund the bulk of the money are Air Zimbabwe and South African Airlines. The ministry has engaged lawyers to recover money from South African Airlines and the issue is being dealt with by the courts," said the Meteorological Services Fund management.
"As regards Air Zimbabwe, discussions to recover the amount owed have been made but the airline cannot pay at the moment as it is nearly insolvent. Efforts are being made to recover money owed by other airlines."
The Auditor-General (AG) Mildred Chiri revealed this in a forensic report of government departments' revenue statements and fund accounts for the year ended December 31, 2016.
The AG established that the New Number Plate Revolving Fund (Fund) - established to import blank registration plates and to sell plates to vehicle owners - had extended $7 million to the struggling airline.
"The Fund advanced $ 7 578 660 to Air Zimbabwe for its operation expenses and total loans amounting to $36 492 777 have been issued to date," the AG said in her findings.
"The constitution of the fund has no provision for issuance of loans to related parties. Air Zimbabwe has over the years been unable to make any repayments towards the reduction of the debt."
"The accumulation of the Air Zimbabwe debt poses a financial albatross to the fund and may have negative effect on its operations."
Chiri added: "The Fund's management should avoid straying from its core business and the loans made to Air Zimbabwe should be recovered."
In response, the fund's management said the Transport ministry okayed the loans.
"Loans to Air Zimbabwe made during the year under review were done with the blessings of the ministry," the management said.
It also emerged that the Meteorological Services Fund, established to facilitate the provision of weather services and related products, had also loaned hundreds of thousands of dollars to the ailing airline.
The Meteorological Services Fund is owed $1 684 443 by airline operators, a figure which represents 92 percent of the total assets of the Met Fund.
"The debtors who owe the fund the bulk of the money are Air Zimbabwe and South African Airlines. The ministry has engaged lawyers to recover money from South African Airlines and the issue is being dealt with by the courts," said the Meteorological Services Fund management.
"As regards Air Zimbabwe, discussions to recover the amount owed have been made but the airline cannot pay at the moment as it is nearly insolvent. Efforts are being made to recover money owed by other airlines."
Source - dailynews
