Govt to take over Air Zim debt

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Government could assume Air Zimbabwe’s staggering $140 million debt, which has seen the beleaguered national airline struggling to recapitalise operations over the past two years.

State Enterprises Restructuring Agency executive director Edgar Nyoni made the disclosure yesterday while explaining the agency’s 2012 strategy to resuscitate ailing parastatals to the Parliamentary Portfolio Committee on State Enterprises and Parastatals.

The chairman of the committee, Zvishavane Runde MP Lawrence Mavima, had asked Nyoni to explain what the ministerial committee on Air Zim had done to save the “comatose” national carrier.

Air Zim, which owes employees about $15 million in unpaid salaries and allowances, urgently needs $20 million as a firefighting measure to keep it in the air.

“The major policy thrust as approved by government was taking over the debt and a Bill is being prepared by the line ministry, but we do not know when it will be presented to Parliament,” Nyoni said.

“The aim is to relieve the parastatal from the debt burden whereby government will be able to meet its obligations. Currently it employs 1 400 people and so there is a possibility of downsizing it. There is also a possibility of moving away the National Handling Services from the airline so that one can see its viability. Government is also looking at leasing some aircraft, but the main challenge is old planes and making sure that the routes that were cash cows are restarted.”

But Chiredzi North MP Ronald Ndava said the airline’s debt takeover by government might mean ordinary people in the countryside would assume the debt.

“Ordinary people do not use Air Zimbabwe and instead they might want capital to be put on purchasing buses instead of aircraft,” Ndava said.

Nyoni also said Air Zim would need to retrench so that by the time the airline resumed operations, they would be able to pay wages.

He said the national carrier needed rebranding to attract customers, upgrading of equipment and reworking of their pricing and marketing strategies.