Housing and Infrastructure Development Minister Ronald Chitotela yesterday told Parliament that government through the Road Development Agency terminated the negotiations with Intelligent Mobility Solutions (IMS) for an integrated road tolling concession agreement because the proposal was not in the best interest of the public.
And Chitotela says the cost of the Michael Chilufya Sata toll plaza on the Copperbelt was exorbitant because the exchange rate at the time was high.
Speaking in parliament, Thursday, when he delivered a ministerial statement, Chitotela also alleged that there could be some elements within the government system who could be feeding classified information to the opposition.
“The status of the concession agreement between Intelligent Mobility Solutions on the integrated tolling system in Zambia, Mr Speaker, in order for me to sufficiently answer the question of whether government allegedly single sourced the management of toll gates in the country, allow me to provide details of the background to the issues as follows; (i) On January 30, 2017, the Road Transport and Safety Agency received unsolicited proposal for the Public Private Partnership from Lamise Trading Limited in association with Kapsch International for the purpose of developing an integrated road traffic management and tolling system, (ii) after the determination, the proposal met the requirement of the Public Private Partnership Act number 14 of 2009, RTSA proceeded to issue an advert in the public media to request for the competing proposals, (iii) four competing proposals were received from MTM, KZM traffic of South Africa, Grandview International Zambia/Romania, Fisha consulting of South Africa and the Rashimita Information System of India,” Chitotela revealed.
“Out of the four proposals, only the proposal from Fisha consulting of South Africa was considered comparable in nature and scope to the original unsolicited proposal. The two proposals were then evaluated after which it was determined that proposal from Lamise Trading Limited in association with Kapsch International was the best. This led to the subsequent conditional approval of the Lamise Trading by the PPP council and the approval by the council was conditional upon Lamise Trading Limited and Kapsch International providing a legally binding joint venture agreement incorporated under the laws of Zambia for them to executive the project.”
Chitotela said giving the mandate of the road tolling was not approved by the Public Private Partnership because that was the mandate of the RDA.
“Mr Speaker it must be noted that the inclusion of the tolling and the construction of 36 new toll plazas was part of the initial submission to RTSA. However the tolling component was not approved by the Public Private Partnership Councils and therefore was not part of the concession agreement at that stage [and] this was because road tolling is the mandate of the Road Development Agency and not RTSA. Consequently on the 21st of August 2017, Lamise Trading in association with Kapsch at that time incorporated in Zambia as Intelligent Mobility Solutions submitted unsolicited proposals to the Road Development Agency for a separate tolling solution which was to be integrated with the RTSA system. The unsolicited proposal submitted by the Lamise and Capt involved he construction, enhancement, the expansion and maintenance of toll infrastructure at 25 tolling stations under the proposed concession [and] Intelligent Mobility Solution was to invest a total of US $38.3 million towards supplying, installation and maintenance of advanced integrated tolling systems at the 25 toll plazas for a period of 17 years,” he explained.
He said a decision was then made to terminate the negotiations because the proposal was not in the best interest of the public.
“Mr Speaker, the PPP council then invoked Section 35 (d) of the PPP Act which I quote as follows ‘a contracting authority may negotiate an agreement subject to the approval of the PPP council without using the competitive in selection process in cases where there is only one source, the capable of providing the required service such as when the provision of the service requires the use of intellectual property, the trade secrecy or other exclusive rights possessed by a certain person or persons.’ In this regard, Intelligent Mobility Solutions was the only entity capable of providing the integrated tolling solution because to implement the tolling component, the use of intellectual property and other exclusive rights possessed through the RTSA concession agreement was required. And following the review, the consultation and negotiations on the proposed tolling solutions, a decision was made to terminate the negotiations with Intelligent mobility Solutions as provided for in the law. The negotiations were terminated because government was not of the view that the proposed concession was going to deliver value for money and therefore was not in the best interest of the Zambian people,” Chitotela further explained.
He said assertions that RDA had signed the said concession with IMS were incorrect.
“Mr Speaker, given the decision made by government, the wrong impression and deliberate miss information to the effect that the Road Development Agency has already signed the concession agreement with the Intelligent Mobility Solutions are totally incorrect, dishonest and unfounded. Mr Speaker, I wish to take this opportunity to reiterate that the government of His Excellency Mr Edgar Chagwa Lungu, President of the Republic of Zambia is committed to work with the private sector, in developing quality infrastructure across the country. Government has also got interest to work with the private sector to improve revenue streams for reinvesting in infrastructure assets in our desire to work with the private sector. Our only condition is that the partnership created by government and the private sector should result in a win-win situation. This is because we have a mandate to deliver and we shall continue to undertake the projects that provide maximum benefits to the economy and the people of this country,” Chitotela said.
The minister then said there were bad elements within the government system who could be feeding wrong information to the opposition.
“My strongest suspicion Mr Speaker is that there could be bad elements within the government system who are misinforming our colleagues (opposition) and because they don’t want to verify, they are running with that information as the truth. And that is unfortunate, it is making them very unpopular. It is just a deliberate ploy to cause paralysis in government operations and we are determined. We will not succumb to deliberate moves to cause paralysis in government operations,” he said.
Asked by Monze Central UPND member of parliament Jack Mwiimbu why the minister’s position was contradicting the statement from IMS chairman Walid El Nahas as quoted by News Diggers, Thursday, saying negotiations were still on-going and not terminated as claimed by Chitotela, the minister said the RDA had written to IMS informing it of the revocation of the negotiations.
“There are two proposals and there are two applications for concession. The other one is to do with the road safety enhancement where we have seen the cameras on the road. Therefore because of that, the same concessionaire proposed to now integrate the tolling programme in motion where RDA was engaged. The one that was approved [with] the condition approval given was on the road enhance security system which is in operation, but because they wanted to integrate the tolling and weigh in motion, they brought another proposal,” Chitotela responded.
“A conditional approval was given to allow Road Development Agency [which is] a contracting authority to look at the proposal of them expressing intention to do business with government. After that, Road Development Agency who are the negotiating authority engaged the IMS and if my memory serves me well, I think it must have been between 1st and month-end of October where they could not agree to the conditions and terms, and RDA wrote to the concessionaire advising them that we have now revoked the conditions in the Act, we are terminating the negotiations. That is the official position [of government and] I will not delve into hearsay.”
And asked by Mwembeshi constituency Independent MP Machila Jamba to provide proof of the letter that the negotiations were indeed terminated, Chitotela said the letter was available but the problem was that it was “confidential” hence could not be shared.
Meanwhile Chitotela said the cost of the Michael Chilufya Sata toll gate was high because of the exchange rate at the time.
“Mr Speaker, the Michael Chilufya Sata Toll Plaza has been constructed at a total cost of US$4.3 million inclusive of 16 percent value addition which is VAT and 5% contingency. The contract for the project was signed in July 2017 at which point the exchange rate between the United States Dollar and Kwacha was about US$1 to K8.9 contrary to assertions that the toll plaza cost K52 million. The true cost of the toll plaza in local currency is K38.27 million,” said Chitotela.
“The cost breakdown is as follows; civil works US$1.8 million, building US$707 thousand, tolling systems, booths and equipment US$161,700, power supply and related installations US$270,573, signal lights systems and traffic control US$58,000, surveillance systems US$143 000, designs fees US$95,739, preliminaries and generals US$319, 130, VAT US$602,517, contingency US$159,659, bringing the total cost to US $4.3 million.”