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Minister grilled over loans

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Senators yesterday ratified three loan agreements with China worth $380 million, but demanded an explanation from Acting Finance minister Gorden Moyo why Chinese firms also got the tenders for the jobs.

The senators said it was imperative for explanations to be made regarding how the loans would be paid back given the country was saddled with a $6 billion debt. They also wanted to know if the projects would be completed timeously given the country’s history of failure to complete important projects.

The concerns were raised during debate on the ratification of three loan agreements with the Export Import Bank of China in relation to the Victoria Falls Airport project ($150 million), the development and rehabilitation of municipal water and sewage treatment works for the City of Harare ($141,3 million) and the medical equipment and supplies project ($89 million).

“Why has it taken long to find the money when we had signed the agreements with the contractor and there are a lot of penalties involved? We want the minister to explain those,” queried Mutasa/Nyanga Senator Patrick Chitaka.

“How much due diligence was done to ensure we get value for money and can the minister assure this House that only $150 million is needed to complete the Victoria Falls Airport project or else we find by the time the project is completed it will be worth billions (of dollars)?”

Chitaka also challenged Moyo to explain how government would get 10% funding for each of the three projects as requirements according to the agreement were that China covered 90% of funding while Zimbabwe chipped in with the remaining 10%.

Bikita Senator Kokerai Rugara challenged Moyo to assure the nation that his reference to the funding as “cheap loans” would not result in shoddy work on the projects. But Moyo said due diligence had been done as they had learnt from past experience.

“There is going to be pre-assessment of equipment and material before it leaves China and assessments after installation as well as taking precautions to make sure we are not losers in that agreement. The Chinese offered concessional loans called cheap money and their conditions are that it is cheap money and therefore you use their technology,” he said.

The loans were ratified by both the House of Assembly and Senate.

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