Airzim woes: Poor corporate governance to blame
airline on poor corporate governance.
He told the Parliamentary Portfolio Committee on State Parastatals and Enterprises Management yesterday that management had come up with several turnaround strategies which were not taken on board.
The committee is chaired by Zvishavane-Runde House of Assembly Member Cde Larry Mavhima (Zanu-PF).
The legislators asked Mr Mavhunga if there was interference from the top.
“The issue of corporate governance has to be examined right from the top.
“This issue touches the whole value chain. It’s the chain which has got to be exami- ned.
“Management is very clear it has got to operate on commercial basis but if you can’t make commercial decisions then it means obviously the challenge lies not with management.
“Successive leadership management has come up with good strategic turnaround blue prints but when it comes to implementation, management has not been given the support.
“For instance the issue of retrenchment is not because of management nor the board but the shareholder,” said Mr Mavhunga.
He said there was need for the Government to expedite restructuring of the national airline so that it can operate viably.
He said strategic alliances were the only way which made other airlines successful.
Mr Mavhunga said the national airline has a debt of US$137,7 million with US$112,7 million being the internal debt.
He attributed the debt to price controls before dollarisation which he said made the airline to fly at a loss.
“Of the internal debt US$38 million is owed to statutory obligations like Zimra, NSSA and others while the Ministry of Transport, Communications and Infrastructural Development is owed US$26 million, and deferred salaries and allowances accounting for US$20 million and our bank overdraft is US$12,3 million.
“We have since asked the Government to write-off the internal debt but there is no position on that as yet,” he said.
Mr Mavhunga said the external debt of US$25 million was owed to IATA clearing house, global distribution system, spares, fuel companies and navigation fees.
He said the national airline needed about US$40 million to clear some of the debts.
Mr Mavhunga said Government had not been forthcoming with capital to help the airline stay afloat.
He also said shutting down Air Zimbabwe was not an option because most of the airlines that shut their operations were now worse off.
Mr Mavhunga said the imposition of illegal sanctions on Zimbabwe by the European Union and United States had also impacted negatively on their operations.
Passenger and Cargo general manager, Mr Moses Mapanda said Cabinet had circulated a memo instructing all Government officials to fly Air Zimbabwe as a way of promoting it.
He, however, said the directive was not being complied with.