Thursday, 17 June 2010

I write what I like…..Zamtel: More questions than answers…

WE all agree that Zamtel was not the ideal model of a profit-making company.
The privatisation of the Zambia Telecommunications Company (Zamtel)
has always been opposed by civil society organisations and opposition
political parties, and have accused the government of lacking
transparency in the sale of one of the last remaining state-utility

First, Cabinet decided to sell 75 percent of the Zamtel shares and
appointed RP Capital of Cayman Islands, an alternative investment firm
specialising in identifying intermediate and long-term investment
opportunities on behalf of institutional investors and qualified
high-net worth individuals in Eastern Europe, the Middle East, Africa
and India, to evaluate its assets.

However, the evaluation report has never been made public and was a
subject of a tribunal as it was alleged by civil society organisations
that Dora Siliya, then Minister of communication and transport, had
ignored the advice of the attorney general in awarding a $2 million
contract to RP Capital to evaluate Zamtel.

Mumba Malila, the Attorney General, had advised Siliya against signing
a memorandum of understanding between government and RP capital of
Cayman Islands to evaluate ZAMTEL assets. Mumba Malila’s contract as
Attorney General was never renewed. I will leave that to you

Anyhow, government said it cannot make public the valuation report as
it would jeopardize the privatisation process. Government said it
would be wrong to disclose the value of Zamtel as all the prospective
buyers would bid around the value of the assets and frustrate the

Well, we all remember that in 2002, government shelved plans to
privatise Zamtel, opting instead to commercialise it but this did not
work out either as the performance continued to decline.
Zamtel, established about 40-years ago, is encumbered with liabilities
amounting to more than $120 million. It also has an annual operational
deficit of $17 million and is heavily indebted to Government in
unremitted taxes.
A Parliamentary committee on communication, transport, works and
supply in January last year recommended that Zamtel should be
restructured and recapitalised to find a lasting solution.
But it seems this fell on deaf ears, instead government sold 75
percent of Zamtel shares to Lap Green N of Libya at the cost of US$257
million. And President Rupiah Banda now says the sale is not irreversible.

Really? Why the government has decided to turn a deaf ear to the opposition to
sell Zamtel no one knows. We all know the effects that privatization
has had on the social and economic life of this country.
Or have we all forgotten the lessons of Zambia Airways? Did the
Zambians not have a quarrel with the government when they were
liquidating Zambia Airways? How many years down the line have passed
and they are still struggling to dispose of its assets? It is way over
a decade now.

It is easy for government to claim that it will pay all the workers
their due packages, but from past experience, we know that that has
not always been the case. Upto now, we still have former ZCCM workers
who have not been paid.

Further, what guarantee is there that management positions in Zamtel
will be retained by Zambians? Where do they think these Zambians, whom
the country trained at great cost will utilize their skills?
What was wrong with just re-organising Zamtel, putting an efficient
management in place and stopping political interference for it to
succeed? We all know that Zamtel is solid, one just has to look at the
human resource that is there, the buildings and now the optic fibre
that it is putting in place.

With the new owners, we know that a massive staff reduction programme
will need to be carried out. So, when our fellow citizens contribute
to the unemployed, we know who to blame – the MMD Government.

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