Business

Private sector key in scaling up public transport systems, says Govt

Government has said that it will not stop revamping and modernising the public transport systems using private entities like Landela Investments which has been instrumental in the acquisition of new buses.
It has emerged that contrary to the criticism being pushed by those opposed to President Mnangagwa’s administration, Government had actually saved about USD 6 million by acquiring 162 buses through Landela Investments.
Landela is using its own resources to bring in the buses into the country and get paid in local currency as it makes its contribution to the national economy.
Landela Investments has been linked to businessman mogul Kudakwashe Tagwirei but a search at the registrar of companies has revealed that he is neither a shareholder nor a director in the company.
Locally prices for the Marcopolo, VW and Golden Dragon buses being bought by Landela costs between between USD 223 000 and USD 357 000 per bus.
Landela is selling those buses to Government at around USD 215 000 and getting paid in local currency using the offial exchange rate of 1:25.
Local Government and Public Works Minister July Moyo said they would continue buying more buses in a bid to modernise the public transport system.
“There are those who are opposed to Government programmes and they write incorrect information even on social media but we will continue to follow what the President (Mnangagwa) is doing to improve the transport system. He will launch more buses soon,” said Minister Moyo.

“Those willing to have their buses included can simply go and register under Zupco so that we have many owners but one system to control who does what. During the Covid-19 era, Zupco can be trusted in terms of sanitising the buses and checking passengers face masks than leaving it to kombi operators. The new transport system will also cover how vendors will be linked with the 457 bus termini to ensure health and safety measurements are adhered to.”
Landela Investments, and according to its officials, intends to bring 500 more buses by June 2021.

How government saved millions of dollars.

Investigations have revealed that Landela prices, and for the prices after duty and taxes are cheaper than what is being charged by local companies who are the agencies of the buses brought in by the firm.
A price check from Zimbabwe Motor Distributors (suppliers of Marcopolo and VW buses) and FAW Zimbabwe (suppliers of Golden Dragon buses) showed that the buses were going for between USD 223 000 and USD 357 000.
This means that if Government the buses locally, it could have spent nearly US$40 but the Landela route will see it parting with about US$34 million.
Inquiries from ZMD, which holds the franchise for VW buses, showed that each bus is being sold for USD286 000. Landela bought 30 VW buses at about US$6 million and if it had sourced the buses from local suppliers, it could have forked out US$8,5 million.

At Faw Zimbabwe, 64~ passenger seater Golden Dragon buses are pegged at US$223.300, translating to US$27 million for 122 bought by Landela.
Landela used about USD 24 million for the coaches.
Landela Investments also bought 10 Marcopolo buses at about US$2 million and saved US$1,57 million because locally ZMD was charging each bus US$357 000.

Why Government decided to buy the buses than leasing

Landela was leasing its buses to the Central Mechanical and Equipment Department (CMED) in a same model where companies and individuals are leasing to Zupco.
The cost of hiring the buses was high, thus Government and Landela entered into an agreement for the latter to sell its 162 buses.

Out of the 162 buses valued at ZWL$863,2 million, CMED has paid ZWL$132,4 million, leaving a balance of ZWL$730.8 million.
If the buses had been paid for using the parallel market rates of 1:70, would each bus would have cost 14 million ZWL meaning the government would have had to fork out 2.3 billion ZWL
A Landela official said: “Apart from this being our own way of contributing to this economy, we as Landela have mines around the country and we can use the local currency payments by Government to cover the local components needs of our mines. We know that this is not the exchange rate for us to recoup our investments on the buses but the difference is our contribution to Government programmes,” said the company.
The official said 500 more buses were expected into the country by June 2021 as 2000 buses are required for the mass public transport system.

Tendai Guvamombe