And Nahas revealed that motorists in Zambia will pay K975 for re-registering vehicles in order for the Road Transport and Safety Agency (RTSA) to install the Radio Frequency Identification chips that his company is providing.
News Diggers! has been carrying out an investigation into the government concessions signed between IMS, RTSA and the Road Development Agency, to establish why the State was engaging a private firm to takeover revenue collection at the said institutions.
But when contacted yesterday, the IMS boss said the concession agreements do not have any provisions for the private company to get involved in revenue collections.
In this verbatim interview, Walid El Nahas gives the IMS side of the story and explains government’s benefits from the concessions and further seeks public support for the deal.
Question: Was this deal subjected to competitive bidding? How did you coerce somebody in government to award it to you?
Answer: The RTSA concession was tendered and advertised in the newspapers for a month and half. We submitted our proposal first and after it went to the PPP unit, it had to be advertised for competing bids. They received the competing bids and we were the best solution. We got it without giving anyone in government not even a dollar. During that period, we also knew the PPP Act also protects us to do road tolling as well. Kapsch is a world leader in providing traffic technology systems. It has tolled in several countries and found solutions in several countries. So we joined the tolling in the same bid and it went to technical where it was approved.
Then when it went to the PPP council it was said that tolling shouldn’t come under RTSA, but it should come under RDA. So they approved RTSA and they asked us to re-submit the tolling under RDA with the protection of the PPP Act.
Tolling today brings the government about US$100 million a year. This is money that comes from cross border countries, and we all know that the correct mileage of these trucks is never declared. So when the two projects came together, it was to track these trucks to make sure that they pay the proper amounts for what they are declaring.
Q: How are you sharing this revenue with government?
A: The revenue split of this cross border tolling is 90 per cent gross to government and 10 per cent to us. From the 10 per cent that comes to us, we have to pay for the system, fix all the borders, we have to make sure that we pay the RTSA employees that are working on this project, which I think is a very reasonable deal because our profit margin here is one to two per cent.
In order to secure the cross border infringements on road tolling, we have to make sure that it is installed on the tollgates. So that when a person declares 500 kilometres but drives a thousand, on entry of the borders, he will be monitored on how much he is paying. The data will be given to all borders that this number plate paid this amount, so he will be asked to pay the penalty plus the extra. If he doesn’t have money, we have websites that are controlled by the National Road Fund Agency and RDA that foreign owners of these trucks can pay online and automatically it will show that it has been paid and the truck will pass.
Q: Are you collecting money on behalf of the government?
A: No! Government is running the show we are just in the backgrounds providing the technology and infrastructure which will be run by RDA and NRFA. Our role is just to support the technology and provide solutions. Today, there is no Escrow account any more. Everything goes into control 99. We don’t get involved in the money, we don’t have access to it. IMS doesn’t run RTSA, it does not run RDA or NRFA, it is a back office responsible for providing technology.
Q: Are you the company that is now responsible for registering cars in Zambia so that you can install the so-called Radio Frequency Identification chips on vehicles?
A: For security reasons, RTSA is handling the car re-registration and IMS doesn’t have access to anything.
Q: Is it true that you are frustrated that motorists have been too compliant against speeding, and you are not making the money that you intended to make, so you are now installing cameras secretly?
A: That is not true, our concession period was due to the fact that the government wants to achieve road safety. We cannot install speed cameras without making a public announcement of where it is going to be. We cannot change that because that is the law and we obey the law. This is RTSA and the police doing that remember, and we are only providing the technology.
Q: Some people have complained that your speed cameras are giving false information where someone receives an alert that they were speeding when in fact it is not true.
A: That is not possible, our cameras are all certified. They are the highest technology, they are the first cameras that are being launched with infrared technology for in the night. So the driver does not get bothered, and all this will be announced to the public.
Q: How much will you charge motorists for installing this device and how much will you get from that?
A: The revenue split will be as follows: The total charge will be K975
Q: Per vehicle?
A: Yes per car. From this charge, K525 goes to government, K200 goes to plate numbers and people will not have to pay extra for the plate, K100 goes to RFID technology, how much is remaining? K150, from this we have to pay all the employees of RTSA working on this project, and then the little that remains is what goes to IMS.
Q: I really need to demystify this, because Zambians are curious and would like to know why a foreign company will be monitoring their movements with this tracking device. Do you have access to the speed cameras?
A: The fines are done on the RTSA and Zambia Police Control. There are RTSA employees working on this. We are not involved at all.
Q: But people don’t understand why you are providing this technology that will enable RTSA and the government to monitor my car movements. My car is not a truck and I don’t transport goods, so why should you monitor where I go?
A: Today speed cameras are worldwide, the government doesn’t know where you are going, but they will know when you are speeding and you will get an infringement ticket. That is the only time they will know where you are speeding from. Don’t you think this is good development? And the government is not spending.
Q: Yes it is not spending, but when we look at the number of years when you will be implementing this deal, it shows that at the end of 17 years you will have collected so much from government and you will have spent nothing.
A: Excuse me! We will have spent nothing? My retain on investment is very clear sir, in this concessions. It’s well outlined that my retain on investment is about 13 to 14 per cent, which I think is very fair.
First of all, the 90 per cent that you have reported that IMS gets and the government gets 10 per cent. IMS has to pay VAT on revenue, withholding tax for the employees, withholding tax on office rent, by the way we have only four foreign expatriates and we have 55 Zambians. So total due to IMS after tax is about K400, 000, total due to government is about K1 million. This is the August operation schedule. This is even before our operational costs. So in August we ended up with a negative of K1,400, 000 while the government makes a positive of K1 million. This is from the August income. The actual split at the end of the 17 years is 81per cent RTSA and 19 per cent IMS.
Q: Let’s go to the road tolling. Zambians are asking why their government is failing to simply collect toll fees and they have to surrender this simple responsibility to you to collect money.
A: There is a very serious fact that you have to know. The government is not surrendering the tollgates to the company. Currently how does the government build the tollgates, the Ministry of Finance releases the money and it goes to RDA, RDA builds the tollgates and gives it to the NFRA to run the tollgates. Now instead of the Ministry of Finance borrowing money to give to RDA to build and handover to NRFA, there is a company called IMS which is offering to build these tollgates for them, hand them to toll structures and the NFRA will run the tollgates. So basically we don’t come anywhere near this. The IMS doesn’t come anywhere near this project. It’s just a Public Private Partnership where they run the show while we provide the technology to link it to RTSA. In other words we provide a loan for the infrastructure.
Q: So IMS will not be collecting toll fees?
A: Definitely not! The people who will be in the booths will be National Road Fund Agency workers. The people who will be working in the back office operation room are NRFA people. IMS will only be there for technical support if anything happens. The agreement we have with government indicates clearly that the data savers will be inside RDA. We have no access at all.
Q: Why are you saying to government that 17 years is good and seven years is bad for this project?
A: In the re-negotiations, the government said we run seven years on the already existing tollgates. Now this is a synchronized system which will have to work with the rest of the systems. If we are able to put the system together, it has to be a nationwide project, otherwise it will be ineffective. The refusal that we have on that is that it will not accomplish what we plan to do for the nation, for the benefit of revenue collection.
Q: Is it not only true that you would like the project to go for 17 years so that you can maximize your return on investment?
A: Listen sir, return on investment is not the question. The question is that they want to give the 10 tollgates, which is not how IMS would like to operate because we want to provide a system of technology that will be effective nationwide. In seven years they want us to do 10 tollgates, now the remaining tollgates once they are operational, what’s the conflict that will be there with our system on the other 10 tollgates? Then we will start going for renegotiations again. That is why we would like to build all the tollgates at the same time and install them with this technology.
Q: Have you finally agreed on this tollgates deal with the government over the number of years for implementing this project?
A: We haven’t agreed, but we are still negotiating to reach a place where we can do the best for the ministry to provide the solution for Zambia and at the same time trying to achieve the technology output that we are putting in Zambia.
Q: Thank you for allowing us to come and get your side of the story.
A: I would like to also thank you for taking your time to come and get facts about this project. I know that your newspaper would like to give the people of Zambia facts. IMS and Mr George Kapsch would like to thank the people of Zambia for the opportunity to do business here.