5 September 2008
FINANCE and National Planning Minister Ng'andu Magande has deferred a US$1.6 million debt, which Zambian Airways owes to National Airports Corporation Limited (NACL) to protect the airline from collapse contrary to the decision by his counterpart at the ministry of Communication and Transport, Dora Siliya.
Ms Siliya has explained that allowing a deferment would be discriminatory and against public interest.
Speaking in an interview in Lusaka yesterday, Mr Magande said he had taken the decision in order to protect Zambian Airways from collapse, but Ms Siliya said she had earlier rejected the request by the airline, saying she had received similar requests from other players in the industry but had turned them down.
Ms Siliya said in an interview in Lusaka yesterday that there was no way that Mr Magande could defer the payment of the debt owed by a private company without the approval of Cabinet.
Ms Siliya said although Mr Magande wrote to her justifying the deferment, she did not approve the proposal because the matter was beyond her and the Finance minister and that was why she referred it to Cabinet.
"There are so many other private airlines with similar problems and I don't see what is special about Zambian Airways to seek political intervention in this matter," Ms Siliya said.
She said any decision regarding the request by Zambian Airways needed to be done by the company as a business and seeking the intervention of the minister would render it political.
Mr Magande said in an interview yesterday that Zambian Airways had been asked to settle the $1.6 million debt within two years to save the company from collapse and give it enough time to mobilise the money owed.
In a letter to Ms Siliya dated June 25, 2008, Mr Magande says his ministry had gone through various documents and held meetings with the chief executive officer of Zambian Airways over the debt.
Mr Magande said in the four-paged letter to justify the deferred payment that the global economy was facing a serious crisis spurred by incessant increases in the price of fuel and it was against this background that Zambian Airways approached NACL and the Government.
He said Zambian Airways had become a major player in the Zambian aviation industry and its contribution to the economy had been tremendous as evidenced by the airline's growth over time.
"Accepting the deferment proposal will obviously have financial implications on the operations of NACL as it would translate into loss of projected income. Similarly, NACL could lose the same projected income if the company goes down," Mr Magande said.
He said by preserving Zambian Airways, the Government would actually be reinforcing the Zambian economic empowerment policy and this would also be in line with the policy of private sector-led growth.
In a letter dated August 8, 2008 to Zambian Airways chief executive officer, Mutembo Nchito, Ms Siliya says the company had, in fact, not provided sufficient grounds in terms of its business plan to show how the current debt would be repaid.
She said NACL was a public institution and its management was accountable to the board, which had directed that the deferment of the payment would be discriminatory and detrimental to NACL operations.
"The board is accountable to its shareholders, the Government, which is ultimately accountable to the public. Therefore this request for the deferment of payment would not be in the public interest," she said.
NACL acting managing director, Robinson Misitala said in an interview that as at July 31, 2008, Zambian Airways owed NACL $1.6 million in air passenger service charges, landing and parking charges, ground handling charges and air navigation charges.
Mr Misitala said NACL management was due to meet Zambian Airways to agree on how the airline would liquidate the debt.
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