Zimbabwe Airways purchase price inflated by more than $100m

As the spotlight remains firmly focused on the country's controversial new airline, Zimbabwe Airways - which has been linked to the family of former president Robert Mugabe - disturbing allegations are emerging that the purchase price of its aeroplanes bought from Malaysia Airlines was allegedly inflated by more than $100 million, from $70 million to a staggering $180 million.

Highly-placed sources told the Daily News yesterday that worryingly, no plausible explanation had so far been received as to how this had happened and to whom the "extra money" had gone to — a development which had apparently prompted President Emmerson Mnangagwa to initiate a probe into the deepening saga of the new airline.

This comes as the government took delivery of one of the new planes on Wednesday, a Boeing 777 jetliner, as part of the opaque deal that will see a total of four wide-bodied planes eventually being sourced from Malaysia.

At the centre of the controversy is a secretive company, the Zimbabwe Aviation Leasing Company (ZALC) — which all along was said to be fronted by Zimbabweans living in the Diaspora, but is now suddenly said to belong to the government.

ZALC owns Zim Airways, and its documentation is still not publicly available — including at the offices of the Registrar of Companies.

The well-placed sources who spoke  to the Daily News yesterday said an "unhappy" Mnangagwa was "seized with the Zim Airways matter", which he apparently believed was part of  "a grand scheme to steal public funds" by people who had the backing of Mugabe and his much-despised wife Grace when the nonagenarian was still in power.

"All in all, a total of $140 million cannot be accounted for as we speak, and that is why Mnangagwa had to order (Transport minister Joram) Gumbo to bring home the planes which were bought secretly using public funds.

"In addition, Gumbo was supposed to bring two planes, but upon arrival in Malaysia on Monday he discovered that the extensive modifications which engineers had recommended on the other plane for it to be able to fly again had not  been completed," one of the sources said.

Another source said "a red flag" had been raised when the purchase price of the four planes  ballooned to $180 million from the originally quoted $70 million — which money the government had already apparently released."No one can say where this money went to, as the Malaysians have no idea about it, and no one locally can provide definitive answers about what happened. It's a mega problem," the second source said.

But Finance minister Patrick Chinamasa disputed all these claims yesterday, telling the Daily News that he had only instructed the Reserve Bank of Zimbabwe (RBZ) to float Treasury Bills to the tune of $41 million for the purchase of the planes.

"I gave an instruction to the RBZ to issue Treasury Bills to raise the money for the planes and they raised $41 million which we used to pay for the planes. I don't know who is raising the figure to $180 million. There was never any such money," he said.

RBZ governor John Mangudya and Gumbo could not be reached for comment yesterday.

In the meantime, a senior government official has also accused Chinamasa and Gumbo of "misrepresenting facts" when the Treasury chief claimed on Wednesday that ZALC was a government company.

"Gumbo  and Chinamasa must not hide behind their fingers. This project was never a government project at its inception, despite the fact that it was financed by public funds. This is why the plane which has been received carries personalised registration.

"All government-registered aircraft have Civil Aviation Authority of Zimbabwe (Caaz) registration codes. If this aircraft belonged to government, it would have followed the registration procedures followed when registering the Air Zim fleet," the official said.

The Boeing 777 jetliner that came on Wednesday is registered as Flight Z-RGM, which people have presumed to stand for Zimbabwe-Robert Gabriel Mugabe.

Yet another source also told the Daily News that delivery of all the four planes should have been completed in October last year — around the time that Mugabe cut loose most ministers who were supporting Mnangagwa's bid to succeed him. However, this had apparently been delayed due to a dispute between Zim Airways and Caaz, which refused to register them — a move that allegedly resulted in Gumbo making changes to the Caaz board, where he brought in Mandas Marikanda as its deputy chairperson.

Marikanda is understood to have played a pivotal role in the marriage of Chikore and  Mugabe's daughter, Bona — where she is said to have acted as the groom's chief emissary during the bride price negotiations.

Marikanda also sits on the board of Air Zimbabwe.

"Caaz flatly refused to register and sanction the delivery of the planes. That is the reason why Gumbo fired some of the board members in February ... and because of these shady deals, it could be a matter of time before Zimbabwe is blacklisted by the International Civil Aviation Organisation (ICAO)," the source claimed.

An aviation expert who spoke to the Daily News also said the deal to purchase the Malaysian planes was "way too costly".

"Firstly, no one wanted those old planes and so they should have cost much, much less. Secondly, Zim Airways has no capacity to operate those aircrafts, as they have no trained pilots and engineers for them.

"This means that they will need to hire expatriates to fly the planes, and the going rate for a B777 captain is at least $20 000 per month, which  is unaffordable in this market, where you don't even have the passengers to justify the investment.

"You require at least three sets of pilots per aircraft, although you can even go up to five if you have 15-hour flights and above," the expert added.

The Boeing 777 which arrived in the country on Wednesday was being flown by a set of five Malaysian pilots.

Chikore disembarked from the aircraft in a full captain's gear, despite being just a first officer which is a berth below a pilot.

Investigations by the Daily News have revealed that the Malaysian planes are part of the 12 which were manufactured on order by Boeing in 1994, and were delivered to Malaysian Airways three years later in 1997 — where they have been operating until they were retired.

Gumbo has blamed Caaz and Air Zimbabwe officials for leaking information to the press about the Zim Airways deal.

"I am really not happy about that ... I'm working very hard for the country but some people still call you names," a visibly annoyed Gumbo, who was officiating at the arrival of the Boeing 777 on Wednesday, said.

Speaking at the same function, Chinamasa invited more scrutiny to the Zim Airways deal when he said ZALC was a government company which it had used to acquire the planes from Malaysia, allegedly as a strategy to overcome sanctions.

"I am here to categorically state that the aeroplane standing outside is the property and an asset of the government of Zimbabwe. I know speculation has been rife that the airline belonged to the former first family. That is false.

"They have no interest of any kind in this aircraft. I am also here to make it clear that Simba Chikore (Mugabe's son-in-law) has no shareholding at all, directly or indirectly," Chinamasa said.

"We kept the deal under wraps to avoid the trap of sanctions. As you know, we are under  sanctions and with the hostility that we have received, it was difficult to do business.

"Each time we said we were going to one country for business, lots of emails would be sent there and we would not get any favour from the hosts. So, we decided that it was best to keep our  heads cool and remain focused until the deal was done," he claimed.

This contradicted Gumbo who has consistently said that the little-known ZALC owned Zim Airways.