'TTI operating at a loss in Bulawayo'

Tendy Three Investments (TTI), the company contracted to manage parking bays in Bulawayo, is reportedly operating at a significant loss and has proposed a drastic shift in its public-private partnership (PPP) agreement with the Bulawayo City Council (BCC). Under the current arrangement, TTI receives 70% of the parking revenue while BCC takes 30%. However, due to mounting operational challenges, TTI has suggested that the revenue split be reversed, with BCC taking 70% and assuming all operational costs.
Financial Struggles and Proposed Shift

TTI chairperson, Lizwe Mabuza, revealed this week that the company has been running at a loss since it began managing the parking system in February 2022. Despite the company's efforts to collect parking fees under the first phase of the PPP arrangement, the operational expenses, including salaries and taxes, have far exceeded the revenue generated.

"I am a founder of TTI and I have proposed to BCC for the 70%-30% setup currently existing to be reversed so that they get 70% and TTI pockets 30%, which BCC has shunned," Mabuza said. He further explained that TTI would be comfortable with receiving only 30% of the revenue as long as BCC bears the full financial responsibility for operational costs, including salaries and taxes.
TTI's Financial Challenges

A reliable source confirmed to Southern Eye that TTI has been operating at a loss for the past two years, a fact corroborated by an audit conducted by an internationally reputable firm. The audit found that despite efforts to manage the city's parking system, TTI has struggled to cover its expenses, which include a monthly salary bill of approximately US$100,000 for more than 300 employees.

Mabuza, who also has interests in real estate, mining, agriculture, and security, is facing increasing frustration from investors as the financial strain continues. His proposed shift in the revenue model highlights the growing pressure to make the partnership viable for both parties.
The PPP Arrangement

TTI was awarded the parking management contract by BCC in 2022, under a US$2 million PPP tender based on a build, operate, and transfer agreement. The aim of the partnership was to create a sustainable revenue stream for the city while providing employment opportunities for Bulawayo residents.

Under the original terms of the agreement, TTI collects parking fees, with BCC receiving 30% of the revenue. However, the proposal to alter this structure suggests that the current arrangement is not yielding the anticipated financial benefits for TTI. Mabuza has expressed that, while TTI is willing to accept a reduced share of the revenue, the company's financial sustainability hinges on BCC taking responsibility for covering the costs associated with running the service.
Potential Impact on Future Projects

Mabuza, known for his diverse business interests, has also proposed funding a bitumen plant to improve the state of roads in Bulawayo, particularly in the central business district and residential areas. However, the financial difficulties faced by TTI in managing the parking system are now causing concern among potential investors, who fear that similar challenges could arise in future projects.

The Zimbabwe Investment and Development Agency (ZIDA) had initially approved the Bulawayo parking project, following a positive assessment of TTI's operations in South Africa. However, the current financial struggles have raised doubts about the company's ability to fulfill the expectations of both the city and its investors.

As the situation continues to unfold, the possibility of a revised agreement between TTI and BCC remains uncertain. Mabuza's proposal for a revenue-sharing adjustment may be a last-ditch effort to stabilize operations, but it remains to be seen whether the city will agree to the new terms.