News / National
Mnangagwa intervenes on ZimAirways scandal
06 Apr 2018 at 08:04hrs | Views
PRESIDENT Emmerson Mnangagwa has ordered Transport minister Jorum Gumbo to bring home Zimbabwe Airways (ZimAirways) planes secretly bought using public funds, while government investigates the dodgy deal that could collapse the debt-ridden flag carrier Air Zimbabwe (AirZim).
Following the Zimbabwe Independent's dogged reportage on the deal - that reeks of non-disclosure and conflict of interest by government officials, abuse of public funds and potential asset-stripping of AirZim - Mnangagwa last week ordered Gumbo to bring the planes from Malaysia.
Official sources said, after reading the Independent's story last week, and following the issue over months, Mnangagwa held a meeting with Gumbo, his ministry and central bank officials, where he demanded clarity on the deal.
When it became clear that the arrangement was murky, the president demanded that the planes - Boeing 777 aircraft - should now be flown to Zimbabwe and be parked under government control until the situation is clarified and settled.
ZimAirways, associated with Gumbo and former president Robert Mugabe's son-in-law and ex-AirZim chief operations officer Simba Chikore, negotiated a consignment of four Boeing 777 long-haul passenger jets from Malaysia, but had paid only for two of the aircraft.
The company was also in the process of purchasing two Embraer ERJ145 planes from the United States.
"About US$34 million was paid for through the Reserve Bank of Zimbabwe for the two Boeing 777s using public funds.
"The planes cost US$18 million and US$16 million each," a senior government official told the Independent. "ED (Mnangagwa) was alarmed by the deal after repeatedly receiving conflicting briefings on it, prompting him to demand a full report and an investigation to ascertain the ownership structure, organisation and control of the airline as well as its relationship with AirZim."
This comes as several versions of the deal have been circulating in aviation circles and the corridors of power, as well as among the public.
ZimAirways versions:
Version 1:
Officially, ZimAirways is supposed to be a government project. According to the authorities, the new airline was going to buy and keep the planes for AirZim, while parliament steered through a process to assume the state airline's over US$300 million debt to clean its balance sheet to start on a new page. Gumbo has reportedly been peddling this version in government circles.
Government was last year said to be rolling out an ambitious plan to overhaul AirZim which would have seen Treasury taking over the airline's legacy debts by way of liquidation before acquiring new planes from Asia and rebranding to ZimAirways.
It is understood Auditor-General Mildred Chiri had been tasked with overseeing and auditing the airline with a view to winding up its operations before the proverbial rise of the phoenix.
At Independence in 1980, the airline had 18 planes in its fleet, but now it is now virtually a shell. Sources close to the deal say senior Ministry of Transport officials, including Angeline Karonga, in charge of legal affairs, were directors in ZimAirways. However, Karonga denied this, but said ZimAirways was a government project.
"I am not on the board; you can speak to the permanent secretary for details on what ZimAirways is," she said. "It is a government company."
Karonga's comments were in line with what Gumbo had reportedly told Mnangagwa on Friday, but in sharp contrast to his other version that it was a private company which he has been consistently telling the Independent.
Version 2
The second version, which Gumbo has constantly said in public, is that ZimAirways is a private company owned by Diasporan Zimbabweans. He has told the Independent several times since last year that he was assisting the airline to establish itself, although it was a private entity.
He repeated this to the Independent last week. Gumbo said he had facilitated that ZimAirways purchase aircraft from Air Malaysia after AirZim failed to raise funds to buy the equipment.
This raised suspicion of possible conflict of interest for him - he has been contradicting himself depending on who he is talking to - and Chikore who started assisting ZimAirways while he was still at AirZim.
According to this version, ZimAirways was supposed to enter the market, but soon after that AirZim was expected to be closed and its staff and equipment transferred to ZimAirways.
Version 3
Investigations by this paper indicate ZimAirways is owned by a local firm, Zimbabwe Aviation Leasing Company (ZALC). An enquiry with the registrar of companies in Harare indicated ZALC was registered under file number 3015/12.
The file has, however, been missing from the office.
Locally-based German aviation expert Jerry Haas, who has been posting on microblogging website Twitter accounts on the ZimAirways project, initially tweeted last year that government would wind down AirZim before allowing ZimAirways, which is emblazoned with national colours, to take to the skies. According to this version, ZALC was going to be also registered in Mauritius and would then lease planes to AirZim from there. The state airline would pay ZimAirways for the services, and have the money siphoned offshore.
Version 4
ZimAirways will enter the Zimbabwean market as a private airline like Fastjet Zimbabwe and Fly Africa Zimbabwe to compete with these and AirZim as well. Instead of AirZim being closed as part of the deal, it will be forced to collapse on its own due to competition and then ZimAirways would take it over on its own terms, with asset stripping being the main agenda.
Haas recently posted on Twitter, saying the ZimAirways deal was on track and is now reaching finality. "#ZimbabweAirways back on track. Documentation on the final stage. Should be cleared to take-off soon," Haas tweeted on March 21. His latest version was that ZimAirways is a private company which would compete with AirZim.
Version 5
The fifth version is that ZimAirways is owned by Chikore, although Gumbo has a vested interest in the deal. Chikore could not be reached for comment as his phone was not reachable. He did not respond to text messages.
Sources told the Independent this week that government will pay for fuel for ZimAirways planes, which were bought using taxpayers' money, to be flown to Harare as part of investigations of the deal.
"Mnangagwa wants the planes to flown home so that they are parked at the Robert Mugabe (Harare) International Airport, while an investigation is being carried out. Gumbo may, however, face problems in flying the planes because the Malaysians are insisting on payment for the other two planes before they are released," a source said.
"ZimAirways received massive discounts because they negotiated for a package of four planes. The price would have been significantly higher if they had just purchased only two aircraft."
Gumbo last week insisted he would not allow AirZim to collapse, although he has been actively assisting its competitor ZimAirways to start flying.
AirZim has also been failing to get strategic partners.
AirZim, which at one time was reported in parliament to be seeking US$1 billion recapitalisation, immediately requires US$45 million to be operational, according to the airline's Strategic Turnaround Plan (2018-2020).
The airline requires US$26 million to settle its foreign debt; US$6 million to buy three Embraer ERJ145; US$4,6 million for International Air Transport Association clearing house joining fees, among other financial obligations. Official documents show that as at December 2017, AirZim had local debt totalling US$341 million.
Following the Zimbabwe Independent's dogged reportage on the deal - that reeks of non-disclosure and conflict of interest by government officials, abuse of public funds and potential asset-stripping of AirZim - Mnangagwa last week ordered Gumbo to bring the planes from Malaysia.
Official sources said, after reading the Independent's story last week, and following the issue over months, Mnangagwa held a meeting with Gumbo, his ministry and central bank officials, where he demanded clarity on the deal.
When it became clear that the arrangement was murky, the president demanded that the planes - Boeing 777 aircraft - should now be flown to Zimbabwe and be parked under government control until the situation is clarified and settled.
ZimAirways, associated with Gumbo and former president Robert Mugabe's son-in-law and ex-AirZim chief operations officer Simba Chikore, negotiated a consignment of four Boeing 777 long-haul passenger jets from Malaysia, but had paid only for two of the aircraft.
The company was also in the process of purchasing two Embraer ERJ145 planes from the United States.
"About US$34 million was paid for through the Reserve Bank of Zimbabwe for the two Boeing 777s using public funds.
"The planes cost US$18 million and US$16 million each," a senior government official told the Independent. "ED (Mnangagwa) was alarmed by the deal after repeatedly receiving conflicting briefings on it, prompting him to demand a full report and an investigation to ascertain the ownership structure, organisation and control of the airline as well as its relationship with AirZim."
This comes as several versions of the deal have been circulating in aviation circles and the corridors of power, as well as among the public.
ZimAirways versions:
Version 1:
Officially, ZimAirways is supposed to be a government project. According to the authorities, the new airline was going to buy and keep the planes for AirZim, while parliament steered through a process to assume the state airline's over US$300 million debt to clean its balance sheet to start on a new page. Gumbo has reportedly been peddling this version in government circles.
Government was last year said to be rolling out an ambitious plan to overhaul AirZim which would have seen Treasury taking over the airline's legacy debts by way of liquidation before acquiring new planes from Asia and rebranding to ZimAirways.
It is understood Auditor-General Mildred Chiri had been tasked with overseeing and auditing the airline with a view to winding up its operations before the proverbial rise of the phoenix.
At Independence in 1980, the airline had 18 planes in its fleet, but now it is now virtually a shell. Sources close to the deal say senior Ministry of Transport officials, including Angeline Karonga, in charge of legal affairs, were directors in ZimAirways. However, Karonga denied this, but said ZimAirways was a government project.
"I am not on the board; you can speak to the permanent secretary for details on what ZimAirways is," she said. "It is a government company."
Karonga's comments were in line with what Gumbo had reportedly told Mnangagwa on Friday, but in sharp contrast to his other version that it was a private company which he has been consistently telling the Independent.
Version 2
The second version, which Gumbo has constantly said in public, is that ZimAirways is a private company owned by Diasporan Zimbabweans. He has told the Independent several times since last year that he was assisting the airline to establish itself, although it was a private entity.
He repeated this to the Independent last week. Gumbo said he had facilitated that ZimAirways purchase aircraft from Air Malaysia after AirZim failed to raise funds to buy the equipment.
This raised suspicion of possible conflict of interest for him - he has been contradicting himself depending on who he is talking to - and Chikore who started assisting ZimAirways while he was still at AirZim.
According to this version, ZimAirways was supposed to enter the market, but soon after that AirZim was expected to be closed and its staff and equipment transferred to ZimAirways.
Version 3
Investigations by this paper indicate ZimAirways is owned by a local firm, Zimbabwe Aviation Leasing Company (ZALC). An enquiry with the registrar of companies in Harare indicated ZALC was registered under file number 3015/12.
The file has, however, been missing from the office.
Locally-based German aviation expert Jerry Haas, who has been posting on microblogging website Twitter accounts on the ZimAirways project, initially tweeted last year that government would wind down AirZim before allowing ZimAirways, which is emblazoned with national colours, to take to the skies. According to this version, ZALC was going to be also registered in Mauritius and would then lease planes to AirZim from there. The state airline would pay ZimAirways for the services, and have the money siphoned offshore.
Version 4
ZimAirways will enter the Zimbabwean market as a private airline like Fastjet Zimbabwe and Fly Africa Zimbabwe to compete with these and AirZim as well. Instead of AirZim being closed as part of the deal, it will be forced to collapse on its own due to competition and then ZimAirways would take it over on its own terms, with asset stripping being the main agenda.
Haas recently posted on Twitter, saying the ZimAirways deal was on track and is now reaching finality. "#ZimbabweAirways back on track. Documentation on the final stage. Should be cleared to take-off soon," Haas tweeted on March 21. His latest version was that ZimAirways is a private company which would compete with AirZim.
Version 5
The fifth version is that ZimAirways is owned by Chikore, although Gumbo has a vested interest in the deal. Chikore could not be reached for comment as his phone was not reachable. He did not respond to text messages.
Sources told the Independent this week that government will pay for fuel for ZimAirways planes, which were bought using taxpayers' money, to be flown to Harare as part of investigations of the deal.
"Mnangagwa wants the planes to flown home so that they are parked at the Robert Mugabe (Harare) International Airport, while an investigation is being carried out. Gumbo may, however, face problems in flying the planes because the Malaysians are insisting on payment for the other two planes before they are released," a source said.
"ZimAirways received massive discounts because they negotiated for a package of four planes. The price would have been significantly higher if they had just purchased only two aircraft."
Gumbo last week insisted he would not allow AirZim to collapse, although he has been actively assisting its competitor ZimAirways to start flying.
AirZim has also been failing to get strategic partners.
AirZim, which at one time was reported in parliament to be seeking US$1 billion recapitalisation, immediately requires US$45 million to be operational, according to the airline's Strategic Turnaround Plan (2018-2020).
The airline requires US$26 million to settle its foreign debt; US$6 million to buy three Embraer ERJ145; US$4,6 million for International Air Transport Association clearing house joining fees, among other financial obligations. Official documents show that as at December 2017, AirZim had local debt totalling US$341 million.
Source - the independnet
