BY FIDELITY MHLANGA
Civil Aviation Authority Zimbabwe (CAAZ )says it has begun the process of unbundling with an Inter-ministerial committee conducting an asset verification exercise which will inform the split process.
Last year, government enacted Civil Aviation Amendment Act which will see the regulator stand alone and the establishment of a separate entity, the Airports Company of Zimbabwe.
CAAZ Acting director-general Margaret Mantiziba told the Parliament Portfolio Committee on Transport and Infrastructure Development during a tour that the company was insolvent due to legacy debt amounting to US$268 million split as foreign debt, of US$ 166 million and shareholder loans worth US$102 million.
She added that the authority was engaging government for debt warehousing.
According to the new law, CAAZ’s assets will be transferred to the Airports Company of Zimbabwe while assumption of the liabilities will be subject to negotiations between the Transport minister, the aviation regulator, the Airports Company and Finance minister.
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For the year ended December 2017, Caaz reported long-term borrowings of US$416,2 million against a non-current asset base of US$444,5 million while current liabilities of US$279,8 million outweigh current assets of US$38,1 million, an unfavourable situation which has led to the Caaz board engaging government to take over the debts.
The bulk of the debts are legacy loans incurred by government from as far back as the 1980s which were then transferred to the authority in 2003.
In 2018, Caaz secured an additional US$153 million debt from the China Exim Bank which will be used to finance an upgrade of the Robert Gabriel Mugabe International Airport.
For the full year, Caaz reported a deficit of US$29,9 million compared to US$5,7 million in the previous year.
The deficit was despite 2% growth in total revenue from US$38,5 million in 2016 to US$39,2 million, as finance costs and an exchange loss of US$15 million stemming from the foreign legacy loans ate into the top line.
A huge chunk of the loans are denominated in euro and pound sterling.
Depreciation expenses amounted to US$17,2 million during the year under review.
Caaz incurred an operating loss of US$6,9 million, up from US$2,2 million in the previous year.
Total operating expenditure increased by 13% from US$40,7 million in 2016 to US$46,2 million with depreciation expenses chewing up 25% of that amount.