South Africa has agreed with the Zimbabwean government to go on with the plan to upgrade the country’s busiest highway linking South Africa with countries in the north.
The two countries settled to embark on upgrading the Zimbabwe-SA highway, considering how devastating and unpliable the road has become in the past years. The highway is economically significant to both countries because it links landlocked Zimbabwe and Zambia to the Indian Ocean ports of Durban and Richards Bay.
The $2.7bn construction deal given to companies from Austria and China, will be one of the country’s biggest road projects since independence, Transport Minister Joram Gumbo told reporters.
The contract was officially signed on Monday with closely held Geiger International of Austria and state-owned China Harbour Engineering Company (CHEC), Transport Minister Joram Gumbo told reporters in the capital, Harare.
CHEC will work with Geiger to upgrade and add more lanes to the 900km highway from Beitbridge on the border with SA to Chirundu on the Zambian border.
The contract reveals that the companies would operate a 20-year agreement for the stretch of the road from Beitbridge on the southern border to Harare, while renewing the northern section to Chirundu would be funded with loans from the private sector, the minister said.
The highway has fallen into a state of disrepair as heavy-duty trucks use it to transport everything from maize to mining and power-plant equipment from SA to other parts of the continent.
CHEC is one of such several Chinese firms that have received contracts in Zimbabwe, for projects ranging from building power stations or revamping water plants, since President Robert Mugabe’s government fell out with western financiers in 2000.
The companies divided the highway construction into two phases to ensure a perfect and successful work. While the Chinese-Austrian venture builds and gets a 20-year concession to operate part of the highway, the other part will be financed by a loan from an unnamed party and investment from CHEC.
The recent renewal of the Plumtree-Mutare road, which runs from Zimbabwe’s western border with Botswana to its eastern border with Mozambique, was completed by Group Five in 2015 at a cost of about $3bn.
Zimbabwe’s crushed economy stills struggles to stand on its feet since its worst crisis in 2008. This has left the Zimbabwean government unable to pay public servants’ wages on time, and has delayed payment to army troops, with 83% of revenue collected going to salary payments.
The country missed its own deadline to repay $1.8bn to the IMF, the World Bank and African Development Bank by June 30 and President Robert Mugabe’s cash-strapped government says it needs $27 billion – more than twice the size of its economy – to fund a five-year plan to improve basic services and rebuild the country’s infrastructure.