THE US$360 million Harare-Kanyemba Road project will be the shortest gateway from South Africa through Zimbabwe to Zambia and further into the regional interior of Africa, reducing the distance by about 585 kilometres.
That is like cutting the distance by the long Harare-Beitbridge highway stretch.
Documents seen by The NewsHawks say the 354km tendered for project is being implemented by government and a private sector consortium of local construction firms, Exodus & Company (Pvt) Ltd and Ncube-Burrow Consulting Engineers.
It will be financed through a global loan facility of US$360.5 million to be raised through six US$60 million revolving facility tranches. The government will unlock each facility with a 30% contribution (US$18 million) which will result in a total contribution of US$108 million, leaving a balance of US$252 million to be raised.
In the deal, government is the borrower, while PIM Nominees (Pvt) Ltd is the lender. The tenure of the facility will be six years, with the grace period after signing of the loan agreement being nine months. As part of the agreement, the money will be used for the sole purpose of the project over five years, nothing else.
The loan interest is one month Secured Overnight Financing Rate plus 5% per annum, while the penalty interest on unpaid due payments is 3%.
After various funding options were considered, the loan facility route was deemed the best structure following comprehensive analyses of alternatives which proved to be unfit tolling models for the project.
The first US$18 million payment from the government has already been made, kickstarting works on the Harare-Kanyemba Road.
Documents say the Harare-Kanyemba Road is being upgraded, widened and constructed to improve the transport and trade route from South Africa — the continent’s most sophisticated economy — while unlocking Zimbabwe’s agriculture, commerce and tourism potential, especially in the remote Kanyemba area.
Kanyemba is a small border settlement on the Zambezi River where Zimbabwe, Zambia and Mozambique meet just upstream of Lake Cahora Bassa.
It is situated on the banks of the river in the extreme north-eastern of Zimbabwe, forming a boundary corner with Zambia and Mozambique. The upper reaches of Lake Cahora Bassa, Zambezi’s second-biggest hydro-electric facility, is not far downstream from Kanyemba.
Lake Kariba — the world’s largest man-made dam — is 300km upstream.
Although remote, Kanyemba is a focal point for fishing and hunting activities in the nearby Dande Safari Area, and the end-point for long-haul canoe safaris along the Zambezi River starting from Chirundu or Mana Pools.
A few small fishing lodges and camps are found in the area, with boat launching facilities and a makeshift bridge.
Access into or out of Kanyemba is by air charter or by off road vehicles along a long, rough and dusty road.
“The Harare-Kanyemba Road is considered a strategic route for regional trade and integration linking the North-South Corridor, which is why government wants to rehabilitate it mainly focusing on upgrading, widening and construction of the 354km stretch to facilitate efficient movement of human and vehicular traffic, as well as goods and services,” one document says.
“The project has construction and financing aspects. It will be financed through a global loan facility of US$360.5 million which shall be raised through six US$60 million revolving facility tranches. Government will unlock each facility with a 30% contribution (US$18 million) which will result in a total contribution from the state of US$108 million, leaving a balance of US$252 million to be raised. The loan facility route was deemed the ideal structure following comprehensive analyses of alternative options which showed as unfit tolling structures for the project.”
Government say the Harare-Mvurwi-Guruve-Kanyemba Road, given a national project status, will bring huge economic benefits.
“It will significantly will impact on the economy and provide multiple benefits, among them regional integration as part of a development corridor, improve accessibility to the markets, as well as private sector participation in infrastructure development,” one of the documents says.
“An underdeveloped road network is usually associated with sub-optimal economic performance and low quality of life.”
The documents also say farmers along the highway corridor up north will benefit.
“Agriculture is the economic mainstay in Mashonaland Central province, specifically in Mazowe, Guruve, Mvurwi, Concession, Muzarabani and Mbire districts. The main cash crops grown in the area include cotton, soya beans, potatoes and tobacco, which are bulky and heavy to transport to the market.
“The region has huge potential for the production of other crops such as maize, beans, sesame, and sugar cane, among others. Therefore, the construction of the project will be a catalyst to agricultural development. Agricultural yields will most likely increase, and farmers will find better markets for their produce locally and regionally, in Zambia and Mozambique. It will also boost irrigation development already underway in Kanyemba and Mushumbi.”
Further, the project will also enhance trade upon completion.
“Regional road infrastructure plays a crucial role in promoting intra-regional trade and movement of people and vehicles, creating an enabling environment for a sustainable flow of goods and services. The road is expected to boost regional trade within the Southern African Development Community and East African Community.
“It is a regional trunk road and forms part of the A-11 and A-12 highway, which runs from Harare to Kanyemba border to Mozambique and Zambia. Zimbabwe receives goods from the ports of Durban in South Africa and Beira in Mozambique, which are further transported to Zambia and Malawi via Chirundu Border post. The road will provide an alternative route to Zambia through Kanyemba and onwards to Malawi, relieving congestion along the Harare-Chirundu Road.”
A feasibility study to determine the technical, economic, financial, social and environmental viability of rehabilitating and upgrading the trunk road on a public-private partnership basis was done in 2019.
Exodus & Company, one of the five contractors on the Harare-Beitbridge highway construction project, will be the lead contractor for the Harare-Kanyemba Road construction. It will sub-contract construction works to other contractors, some of them involved in the Harare-Beitbridge highway construction undertaking.
Exodus & Company started operations in December 2007. It made its mark in the housing construction sector through Madokero Estate, a mixed-use housing development in Harare, completed in December 2015.
Piggybacking on the Madokero Estate development, Exodus & Company approached government under a public-private partnership model to develop 497 hectares of land in Ruwa, 25.5km to the east of Harare.
The project, known as Mabvazuva, was placed on the market in August 2015. From June 2016, the company embarked on a journey to transform itself from a housing development entity to a general contracting, build-design and infrastructure development firm.
The scope of activities for the company increased to include infrastructure and complex buildings construction. It won its first road construction project for the resealing and rehabilitation of two kilometres for Zvimba Rural District Council the following year, 2017.
In 2019, together with four other local contractors, Exodus & Company was awarded a contract for the rehabilitation, upgrading and widening of the Beitbridge-Harare- Chirundu highway. It has so far completed 60km of road works.
Before being awarded the Harare-Beitbridge contract, the company participated in and won the international tender for the Harare-Kanyemba Road in 2018.
The scope of the project includes six bridges and four tollgates.
Feasibility studies indicated that revenue from tollgates will not be financially viable to provide resources to fund the project, which then necessitated government to propose to finance it through public resources.