THE government has defaulted on a scheduled US$12 million ($1,2 trillion) debt repayment to China’s state-owned Aviation Industry Corporation of China (Avic) which last year supplied Air Zimbabwe with two MA60 passenger planes under a credit arrangeme
nt, businessdigest established this week.
The government had promised to clear the debt, acquired under a financing arrangement with the Chinese for the purchase of the two aircraft at the end of last year.
The Chinese had given Zimbabwe a third aircraft as a token of appreciation for the purchases.
Sources said Chinese aviation authorities had expressed displeasure at Zimbabwe’s failure to undertake its commitments to clear outstanding debts related to the acquisitions.
“The government has not paid the Chinese government as per agreement. It now appears our government negotiated in bad faith,” an official said.
The official said at present the Chinese had stopped some projects they were planning to undertake with their Zimbabwean counterparts due to their “failure to pay debts on an agreed date”.
Air Zimbabwe spokesman, David Mwenga, said he could not comment on the issues when contacted for comment, referring all questions to government which is the shareholder in Air Zimbabwe.
“About the procurement of the planes, talk to government who are the major shareholder of Air Zimbabwe,” Mwenga said, adding that it was the government which had acquired the aircraft for the airline.
He said Air Zimbabwe would make comments over the aircraft only if the issues related to operations.
No comment could be obtained from the Minister of Transport and Communication, Chris Mushohwe who brokered the deal on behalf of government.
“Last year the national airline dispatched a team of engineers to test and inspect the two MA60 aircrafts before they were bought. Government agreed to pay in installments at a subsequent visit which was led by Mushowe,” a source said.
The two planes service regional routes to Beira, Lusaka, Lilongwe and Lubumbashi, and the Bulawayo, Kariba and Victoria Falls routes locally.
The third plane (a gift from China) which is currently grounded due to lack of spare parts was expected to service Hwange and the Transfrontier Parks among other routes in a bid to promote tourism in the country.
“The third plane was grounded just weeks after it was handed over to the Zimbabwean government in January. The plane has failed to live up to its expectations.”
Air Zimbabwe intends to buy two other planes this year.
Presenting evidence to the Parliamentary Portfolio Committee on Mines, Environment and Tourism recently, Air Zimbabwe’s acting chief executive officer Oscar Madombwe said: “We intend to buy two long haul aeroplanes (767) and two 737 (medium haul) and one cargo plane. The funds would be made available by the government and Cabinet has already approved the proposals.”
The airline’s boss acknowledged that Air Zimbabwe was suffering from a shortage of foreign currency and negative public perceptions locally and abroad.
“The airline is suffering from negative perceptions from the travelling public, both local and abroad, on issues to do with safety, reliability and service delivery,” Madombwe said.
“As a result, there has been a decline in business. In 1999 we carried one million passengers, but last year (the figure) dropped to a mere 230 000. We are operating in a difficult environment,” he said.