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New twist on ZUPCO bus deal

by Staff reporter
16 Jul 2020 at 08:04hrs | Views
The Zimbabwe United Passenger Company (ZUPCO) is leasing buses from Landela Investments despite earlier indications that Landela has been importing buses on behalf of the government, Business Times reported.

Landela Investments which has several mining initiatives in the country has been at the forefront of bringing in buses being used by the government to improve the public transport system after the ban on commuter omnibus in March.

The move was said to be saving the government from spending millions on buses through this arrangement.

The deal has been subjected to scrutiny over the murkiness of the arrangement with sources claiming that the government was actually not benefitting much from the deal.

Business Times has since been informed that the ZUPCO-Landela bus deal was not procurement but a lease agreement where the government is using the buses for a fee.

This publication was told this week that the deal did not go through the Public Procurement and Disposal of Public Assets Act as required by law. This means the bus assets being imported by Landela do not belong to the
State.

To date, Landela has brought in about 162 buses into the country and has been leasing them to the government while 500 more buses are expected.

The firm was said to be using its resources to bring in the coaches and selling them to the government in local currency using the official exchange rate system, a position which has since been questioned.

"Zupco buses are not procurement but a lease. So the matter did not go through the Public Procurement and Disposal of Public Assets Act and you are being hoodwinked into thinking that those buses belong to the state.

"The assets do not belong to the State and the State only receives and pays for a service," said a well placed source.

Procurement Regulatory Authority of Zimbabwe (PRAZ) chairperson Vimbai Nyemba contacted for comment about procurement issues raised around the Zupco bus deal, noted that individual entities are in charge of their procurement.

"Entities do their procurements and ZUPCO should have that information. After that, processes go to the Special Procurement Oversight Committee (SPOC) that deals with reviewing procurements and the regulatory board does not get involved," Nyemba said.

It is understood that the buses are owned by Landela but have been surrendered into the custody of CMED who are therefore in charge of servicing the buses. Zupco then gets the buses from the Central Mechanical and Engineering Department.

Ministry of Local Government and Public Works Director for Special Planning Honesty Magaya told Business Times that the buses were launched on the understanding that they were ZUPCO buses.

"When those buses are being launched our understanding is that those are Zupco buses. This issue can be best addressed by my principal," Magaya said.

ZUPCO chief executive Evaristo Mudangwe promised to revert back when Business Times contacted him for comment.

Subsequent efforts to contact him drew blanks as his number went unanswered.

Business Times heard this week that no proper due diligence was done on the investment company, Landela Investments prompting some senior officials at PRAZ to question the arrangement.

The state-owned bus company is currently making 500 000 urban journeys a day, which is one-way trips on a single route.

Government already has struck deals with China and Belarus to quadruple the conventional fleet to over 2 000 buses, with regular batches of the planned 1 500 new buses already arriving and a local assembly planned.

Zupco intends to triple the number of franchised kombis flying its colours to 1 000.

The capacity to transport 500 000 passengers a day means less than 250 000 urban residents countrywide are able to make the return journey to and from work, school or business each day by the mass public transport system with some requiring four journeys for the return trip from home to desired destination.

Zimbabwe deregulated the urban transport system in 1992 to allow for the participation of small commuter omnibuses who to date have failed to effectively regulate themselves.

After deregulation in 1992, transport operators opted to invest in cheaper small buses and commuter omnibuses.

Source - businesstimes

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