04/03/2023
NDOLA-LUSAKA DUAL CARRIAGEWAY
The Ndola-Lusaka dual carriageway will cost US$577million to be recovered over a 25-year concession, translating into a monthly recovery rate of US$24 million per year or US$2 million per month. This is minus interest for which the cost of funds needs to be capitalised over the project life span of 25 years. Also, maintenance costs need to be factored in the funding model.
Before we joyfully celebrate this project, we have to ask what the weighted average cost of a trip between Lusaka and Ndola and vice versa will be for each vehicle. To derive positive cash flow and payback to the investor, the financial models used will have weighted average costs per vehicle per trip. Can the government kindly avail these details to the public to prepare us for how much the toll cost will be per trip. This is critical information, which for transparency and planning purposes we need to know in order to make informed decisions.
The South African experience of Gauteng Overhead Toll Plazas is that the project has failed and customers have refused to pay due to lack of a consultative process, leading to the South African treasury taking over the financial obligations to the operator using government revenues generated from other sources as opposed to toll fees anticipated at the project inception stage.
The whole project is now a white elephant. It begs a question in the Zambian context: will the toll fees for this project be affordable to road users and will customers stomach the costs to avoid the South African experience?
We have a debt issue we are currently dealing with and by asking forward-looking questions we want to avoid a repeat of the same.
Fred M'membe
