MAJOR ZIMBABWEAN OPTICAL FIBRE LINK PROJECT HIT BY LACK OF RISK COVER
Implementation of a US$40 million (Z$33 billion) optical fibre link being undertaken by Zimbabwe Express Services (ZIMEX) and the state-owned fixed telephone network, Tel-One, has hit a snag with international insurers being reluctant to provide political risk cover.
Sources privy to the project admitted that it has been handicapped by failure to acquire political risk insurance. The project, to be run on a Build Operate and Transfer (BOT) basis, requires international risk cover to shield overseas financiers of the project from unforeseen dangers that may curtail the repayment of loans by project operators.
They said the project to link Zimbabwe’s major towns, cities and growth points with optical fibre cables to replace radio links had been hard hit by the country’s unprecedented economic melt-down and political crisis, both of which have seen international rating agencies downgrading Zimbabwe’s credit rating to junk status.
Telecommunications sources revealed to this newspaper this week that the protracted delay in the project had cost ZIMEX US$750,000 to date. "Due to the unforeseen delay, we have indeed incurred unbudgeted costs since we had contractual obligations with various suppliers," said Danisa Nkomo, the project chief engineer.
However ZIMEX chief, Delma Lupepe was quick to say that they had managed to get around the issue of political risk cover and international financiers for the project were soon to come on board to help kick-start the optical fibre link project.
"All parties involved - Tel-One, the government and other contractors have been informed and are updated everyday. We have in the meantime gone around the political risk insurance cover issue. We have in place our own facility, which has been accepted by the financiers and approved by the Reserve Bank of Zimbabwe. This has been done as a way of overcoming obstacles of the political risk insurance," said Nkomo, who could not provide details on the new plan of action to salvage the stalled project.
Nkomo said with the new revised programme of implementation, ZIMEX now envisaged to start at the end of next month. The first phase of the project will link Plumtree, Bulawayo, Gweru, Harare and Mutare, covering a distance of about 1 200km. The first phase would also involve installation of traffic measure equipment.About US$20 million apiece has been budgeted for each of the two phases of the project. Phase two of the project will link Marondera, Hwedza, Nyazura, Mvurwi, Kwekwe, Nkayi, Gokwe, Chakari, Chegutu and Sanyati. Financial Gazette