Govt to bend indigenisation policy on Airzim, says Mpofu

Published: 21 June 2015

Zimbabwe is willing to compromise on indigenisation stipulations to help the national airline to secure a new investor.

Transport minister Obert Mpofu said government was pursuing various efforts to ensure that Air Zimbabwe (Airzim) starts operating on a sustainable basis.

"We would be looking at several possibilities out of which a compromise where, indigenisation is concerned, one route of compromise would be selected and this would be an outcome of negotiations between the two parties. We are willing and are in the process of making sure that Airzim secures an investor," he said.

This comes as the country's indigenisation policy, which compels foreigners to cede 51 percent shareholding to locals, has been singled out as a factor in repelling investment in the aviation sector as well as in other sectors of the economy.

Mpofu told delegates attending the commissioning of Airzim's medium range Airbus A320 on Wednesday that government was assuming the struggling national airline's debt to make the carrier attractive to investment.

The State-owned airline - with $298 million debt overhang - requires close to $260 million in new capital to revive its operations.

Cabinet recently gave the airline an ultimatum to find a technical partner to revamp it, and help turn its fortunes.

Meanwhile, the A320 that was being commissioned is one of the two aircrafts which Airzim is leasing from Sonangol, an Angolan parastatal.

The hard-pressed national carrier is also broadening its revenue streams through the commercialisation of its technical and engineering services.

The airline is targeting the transport, mining, manufacturing, construction and printing industries, among others.

The services offered include non-destructive testing, electroplating, metrology, welding, precision machining and heat treatment.

According to Airzim acting chief executive, Edmund Makona, the airline also has plans to introduce flights to the United Kingdom and China but the company is being dragged by legacy issues.

The parastatal has for long been dogged by viability challenges and without any financial support from government - the sole shareholder in Airzim - the airline is currently surviving from hand to mouth.

It incurred a $45 million loss in 2010 before narrowing the losses to $28 million in 2011 and $26 million in 2012. The losses, however, widened to $39,4 million in 2013.
- dailynews

Tags: ObertMpofu,