Africa-Press – Zambia. However, government negotiates a revenue-sharing mechanism during the concession period. Infrastructure Minister Charles Milupi writes… Today, we joined a big number of our fellow citizens in Ndola on the Copperbelt Province, to witness the signing of the contract to finance, construct, operate and maintain 327 kilometres of the Lusaka-Ndola Dual Carriageway, including 45 kilometres of the Luanshya-Fisenge-Masangano Road, under Public Private Partnership (PPP) procurement model, at a construction cost of US$577 million.
The concession agreement signed between the Road Development Agency (RDA), as the contracting entity, and Macro Oceans Investment Limited, the Concessionaire, will cover a concession period of 25 years; three for construction and 22 for the investor to recoup their investment.
However, the government negotiating team managed to secure a revenue-sharing mechanism during the concession period. This means the government will get a component of the revenue that the Concessionaire will generate from tolling fees. Asides that, the Concessionaire will have to pay the necessary statutory obligations.
Further, the road maintenance cost during the entire concession period will be borne by Macro Oceans Investment Limited. The government will not pay a single cent or any sovereign guarantee, as the construction cost will be borne by Macro Oceans Investment Limited. This is a fulfillment of the UPND party’s manifesto on infrastructure development.
You may recall, however, that the Lusaka-Ndola Road was procured at a cost of US$1.2 billion by the previous government. With other extra costs such as interest, the total cost of that cancelled contract would have reached US$2.2 billion. And this was supposed to be a loan.
Going forward, any contractor, whether it is using the PPP model or our local resources, who will quote at an exorbitant price, we shall ignore their bids.
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