Kuda Tagwirei To Buy 500 More ZUPCO Buses For Govt At A Loss In A “Sensitive Deal.”
14 June 2020
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State Media

Kuda Tagwirei

Government will buy 500 additional buses over the next 12 months through Kuda Tagwirei’s Landela Investments, state media has revealed.

Under a deal that has been struck with Government, the firm uses foreign currency generated from its local ventures to facilitate the transaction, which will then be settled by authorities using local currency at the official interbank exchange rate.

“Apart from this being our own way of contributing to this economy, we as Landela have mines around the country and we can use the local currency payments by Government to cover the local needs of our mines,” a company representative, who elected to remain anonymous owing to the sensitivity of the matter, told The Sunday Mail.

“We know that this is not the exchange rate for us to recoup our investment on the buses, but the difference is our contribution to Government programmes. We did not receive any assistance from the Reserve Bank of Zimbabwe, but used own resources to import the buses on behalf of Government.”

The firm said about 500 more buses were expected in the country by June 2021.

It is believed that 2 000 buses are required for the mass public transport system.

Local Government and Public Works Minister July Moyo said Government was not backing down on the acquisition of new buses as it moves to sanitise the public transport sector.

He said some elements who were opposed to the Zupco bus project and bent on spreading falsehoods.

Government, he added, will not be deterred.

“There are those who are opposed to Government programmes and they write incorrect information even on social media but we will continue to follow what the President (Mnangagwa) is doing to improve the transport system. He will launch more buses soon,” said Minister Moyo.

“Those willing to have their buses included can simply go and register under Zupco so that we have many owners but one system to control who does what. During the Covid-19 era, Zupco can be trusted in terms of sanitising the buses and checking passengers’ face masks than leaving it to kombi operators.

“The new transport system will also cover how vendors will be linked with the 457 bus termini to ensure health and safety measures are adhered to.”

It is believed that the decision to purchase buses from Landela Investments for the Zimbabwe United Passenger Company (Zupco) rather than procuring them from local suppliers could have saved the country more than US$6 million.

Information gathered last week revealed that the buses were acquired from Landela Investments for US$200 000 per bus, while the same coaches were fetching between US$223 000 and US$357 000 at other local suppliers.

Overall, had Government bought the 162 Marcopolo, VW and Golden Dragon buses locally, it would have spent over US$40 million compared to the US$34 million charged by Landela Investments.

Zimbabwe Motor Distributors, the franchise holder for VW buses, sells a single coach for US$286 000.

Landela Investments bought 30 VW buses for US$6 million, which represents a US$2,5 million discount.

At Faw Zimbabwe, which supplies Golden Dragon buses, a 64-passenger seater is pegged at US$223 300.

This translates to more than US$27 million for 122 buses.

However, Landela Investments sourced the same number of coaches for US$24 million, thereby saving US$3 million.

The company also bought 10 Marcopolo buses at a cost US$2 million, saving US$1,57 million in the process.

A single Marcopolo bus costs US$357 000 from Zimbabwe Motor Distributors.

Initially, Landela Investments was leasing its buses to the Central Mechanical and Equipment Department (CMED) in the same way companies and individuals do to Zupco.

The cost of hiring the buses was high, thus Government and Landela Investments entered into an agreement for the latter to sell its 162 buses.

Out of the 162 buses valued at $863,2 million, CMED has paid $132,4 million, leaving a balance of $730,8 million.

Had Government bought these buses using the parallel market rate of US$1: 70, each bus would have cost $14 million, while the total bill would have ballooned to $2,3 billion.

President Mnangagwa on Friday unveiled 40 more Zupco buses in Chinhoyi to boost the transport utility’s fleet.

The number of Zupco workers has increased from 372 to 4 500, while depots grew from seven in 2018 to the current 18.

It also has 15 satellite depots.