Government sets aside fund to mitigate project preparations challenges

GOVERNMENT has set aside a Project Preparation and Development Fund (PPDF) under the Ministry of Finance and Investment Promotion to mitigate against various project preparation challenges.

This came to light during a two-day Zimbabwe Investment Development Agency (Zida) strategic capacity-building workshop that began in Bulawayo yesterday.

Addressing the meeting, Bulawayo Provincial Affairs and Devolution Permanent Secretary, Mr Paul Nyoni, said the fund came after realising that contracting authorities are taken advantage of by unsolicited bidders due to failure to prepare their projects.

“To mitigate the project preparation challenge, Government has set aside a Project Preparation and Development Fund (PPDF) under the Ministry of Finance and Economic Development with the sole purpose of financing the undertaking of feasibility studies,” he said.

“This is a move in the right direction, as what is now outstanding is operationalisation of the Fund.”

Mr Nyoni was representing the Minister of State for Provincial Affairs and Devolution, Judith Ncube.

“This came after realising that contracting authorities are taken advantage of by unsolicited bidders due to failure to prepare their own projects and, as a result, transferring the responsibility of funding and undertaking feasibility studies to the private parties,” he added.

“This always brings challenges as the private parties look out for their interest at the expense of affordable and quality infrastructure and services for the citizenry.”

Mr Nyoni said Zida is working on the development of private-private partnerships (PPP) guidelines, which will help in providing clarity on the provisions of the law on PPPs in Zimbabwe, the Zida Act and Government policy on structuring of PPPs.

“This will accelerate the development of an effective project pipeline and ease the appraisal process and the implementation of PPPs,” he said.

“Furthermore, Zida is engaging all the provinces with the objective of understanding and soliciting investment opportunities to be developed into bankable and marketable pipeline projects.

“This aligns well with the country’s desire to leave no one and no place behind as we push the devolution agenda and grow our Provincial GDPs.”

Mr Nyoni said Government is determined to improve the economy as outlined in its economic blueprints, such as the Transitional Stabilisation Programme (TSP) and National Development Strategy (NDS) 1 and 2, all of which are targeting the attainment of Vision 2030, which envisions an upper-middle income economy by 2030.

To attain this vision, the country needs to mobilise financial resources through traditional funding sources, which include the national budget, support from development partners, debt and private sector funding as well as partnerships between Government and the private sector.

“On behalf of the Government, I wish to confirm our readiness for further collaboration and engagement with the local and international private sector,” said Mr Nyoni.

He noted that over the last year, notable southern region projects approved and under implementation include old Gwanda Road upgrading construction and tolling of the 120km old Gwanda Road, valued at US$110 million and the construction of a dam at the confluence of the Thuli and Moswa rivers and a 152km water pipeline to Limpopo province in South Africa.

Cabinet recently approved the construction of the 120km Old Gwanda Road by a private contractor, Zwane Enterprises under the Build, Operate and Transfer (BOT) arrangement.

The construction of the road, which will have two toll gates, is expected to be completed in 12 months. The company while awaiting approval, has been conducting feasibility studies, which established that 43 homesteads will be relocated to pave way for the construction of the road.

During the workshop, Zida head of project development, Mr Taurai Duku, said solid pre-feasibility studies for all projects were critical as they give a competitive advantage in attracting investment.

“Bankability means a project meets the requirements of the financier for them to provide capital for the project. The financial profits likely to be yielded by investment in a project will be more heavily weighted by the private sector compared with public sector and multilateral donor funders,” said Mr Duku.

Participants were encouraged to target potential investors when coming up with bankable projects. This came after some participants felt they were facing hurdles in fulfilling all bankable project requirements in rural communities. The workshop is attended by local authorities and several private and public sector players.

According to the engagement outline, areas to be covered include creating a pipeline of bankable projects, project preparation and development, prioritisation of investment opportunities and carrying out pre-feasibility studies. —chronicle