The Standard’s headline, “Chinese take over prisons” caught my attention. On the face of it, it is a very good property development deal; the type that has driven urbanisation and economic growth in China.
The Chinese propose to take over urban land housing the Harare Prison Complex in exchange for a new prison complex in the countryside, the value proposition being the opportunity the premium location of land in the capital city offers the property developer and his investors.
Harare Prison complex is a good location for their project. It helps too that the prison had outlived its sell-by-date, needing to be completely rebuilt, a process itself that drives economic activity.
In Japan I believe the law requires perfectly good skyscrapers, in particular to the African eye, to be re-built every 50 years. For the same reason of ensuring economic growth, perfectly good cars, in particular to the African eye, are condemned to the scrap yard in Japan and Western Europe hardly over five to 10 years old!
Since however, the land in question is state land the project must be done transparently. Let us avoid the YTL/Zesa power deal and Essar sagas. Firstly, whose land is it; city of Harare or Central government and have rates been paid over the years?
Secondly, there needs to be independent valuation of the land; and the new prison complex to be built by the investor needs all its architectural drawings and costed bill of quantities, including of civil works prepared by competent independent professionals.
The Ministry of Public Works should go for a public tender for the project, requesting sufficient bid bonds and performance bonds to deter fly-by-night operators and those without the capacity to carry out the project. It may very well be that upon perusing the bids Government of Zimbabwe may need to top up the funding.
Over and above the barter deal, the investor may need to pay GoZ some money. The Chinese investor, whose idea this may be, should not be short-changed. Innovative ideas must always be rewarded, and not stolen.
This can be achieved by giving them a first mover advantage in the form of a 5 to 10% cost advantage over all other bids, as part of the project’s adjudication criteria besides an assured refund of their verifiable costs to date should they lose the public tender.
Otherwise there is no need to be xenophobic. We need the money and the jobs it brings. This, after all, is what is called Foreign Direct Investment. The project must however be transparently executed.