Zim gobbled more than US$114 mln on Trabablas if interests on loans are considered
By Staff Reporter
FINANCE minister Mthuli Ncube has indicated that Zimbabwe will spend more than US$114 million on the Trabablas Project considering that part of the money was funded by loans which will attract interests going into the future.
Initial reports indicated that the project was funded by an US$88 million loan from Fossil Mines (Private) Limited augmented by allocations from the International Monetary Fund (IMF)’s special drawing rights (SDRs).
Reports indicated that the loan agreement with Fossil Mines, formalised on December 6, 2021, under the Public Debt Management Act [Chapter 22:21], had an interest rate of Libor plus 5% per annum.
Lawmakers asked Ncube to come clean about total expenditure following concerns that the project was heavily inflated.
Emakhandeni legislator Descent Bajila (Citizens Coalition for Change) pressed Ncube to provide a comprehensive breakdown of the project’s cost and to clarify source of funding.
The Treasury boss said the initial loan arrangement for the Trabablas Interchange was US$88 million.
“The cost of Trabablas Interchange was driven by our initial loan arrangement of the order of US$88 million, which was provided by a consortium of contractors,” Ncube said.
“In terms of what we used from the special drawing rights, we were required to pay a deposit of US$26 million.
“So, we used US$26 million from the SDRs to pay that deposit and then the rest was structured as a loan from that US$88 million arrangement.
“So, we blended both the SDRs and the loan from the contractors.”
Bajila further sought clarity, saying Ncube’s explanation was not convincing.
Ncube told the House that the total cost was US$114 million split as US$88 million in loan agreement and US$26 million from SDRs.
Chikanga legislator Prosper Mutseyami questioned the rationale behind the additional US$26 million expenditure given that initially US$88 million was budgeted for the entire project.
In response, Ncube attributed the additional cost to “unforeseen project variations”, citing the “cost of relocating residents affected by the infrastructure”.
