18 May 2018

Zimbabwe: Airzim Saga - Tale of Half-Truths, Lies and Deception

As someone - unknown - once said "if words don't add up, it's usually because the truth wasn't included in the equation".

The same can be said of the story of Zimbabwe Airways (ZimAirways), which involves the formation of the new airline, its ownership and buying of new planes - used Boeing 777s and Embraers for US$70 million. The saga has also sucked in national flag carrier Air Zimbabwe (AirZim) and ministers.

The story of ZimAirways and AirZim is not only that of government's determination to press a self-destruct button on the debt-ridden state-owned airline, but that of ever-changing narratives which read like a cock and bull story, an implausible tale told as an excuse to cover up a bad deal and corruption.

The airline is on its knees mainly due to extended periods of mismanagement, corruption, state impunity and poor corporate governance, among other factors. Yet in the midst of this, Treasury, which has for years poured public funds into the airline, has over the past two years discretely sunk taxpayers' money into the ZimAirways project, whose arrangement and inner-workings are as clear as mud.

Government now says ZimAirways is a state project and Finance minister Patrick Chinamasa has come out in the open insisting on this. He also says the Zimbabwe Leasing Company (Zalc) is a state entity. Transport minister Joram Gumbo publicly supports this and has come out validating it.

Rewind to November 2017, Gumbo told the Zimbabwe Independent that government was facilitating the setting up of ZimAirways owned by lawyers living in the diaspora.

As drama continues to unfold, what has emerged is that directors behind Zalc, the firm which controversially bought four Boeing 777 planes for Zimbabwe Airways, are lawyers. Documents also show Harare lawyer Phillipa Phillips is one of the two Zalc directors, together with another lawyer Gift Watinaye. It is not clear why the lawyers are representing government interest there, if Chinamasa's explanation is anything to go by.

"We were approached by the Zimbabwe Aviation Leasing Company, which said it was seeking partners, so we took them to Malaysia which had shown interest in the Air Zimbabwe deal, but could not take it, as long as there were legacy debts.

"So when Zalc came, my ministry was ready to assist because all we want is to use our facilities at the airport and at the same time creating jobs."

Gumbo also said former president Robert Mugabe's son-in-law and ex-AirZim chief operating officer Chikore had nothing to do with ZimAirways as he remains an AirZim employee. He, however, said Mugabe's son-in-law was giving "advice" to Zim Airways as he was an "expert" in the aviation industry, without elaborating what was in it for them.

During the secretive negotiations to clandestinely buy aircraft from Malaysia while at the same time trying to wind down AirZim, Chikore, who then worked for the national carrier, also worked with Gumbo to set up ZimAirways. Gumbo then failed to explain this conflict of interest on Chikore's involvement in the murky project.

"I involved Chikore when I was looking for partnerships, so Zimbabwe Airways are also seeking his advice and expertise. They are talking to him, just like Fly Africa is doing, so that he gives them best advice. He has experience in the aviation field and that is what we want," Gumbo said.

It only took Chinamasa to come to his defence when he said the ZimAirways project had been kept off the radar as a sanctions-busting measure. A closer look at the initial purchase agreement, however, for the planes, tells a different story.

Documents show the sanctions-busting story is a smokescreen as the purchase agreement openly indicates government bought the airliners on behalf of AirZim. This suggests the sanctions-busting narrative was a convenient smokescreen to cover their tracks.

Gumbo for his part did not explain why he had been telling government ZimAirways was a state project, yet publicly insisting it was a private entity.

However, Chinamasa, who officiated at the delivery of one of the aircraft last month, said ZimAirways was wholly-owned by government contrary to Gumbo's remarks. He also said Zalc was a government special purpose vehicle.

Gumbo and Chinamasa's explanation was that two Boeing 777-200 were bought from Malaysia Airlines through their sole agent PricewaterhouseCoopers Kuala Lumpur, but are now being leased to ZimAirways via Zalc. They claimed ZimAirways and Zalc are owned by government.

But Gumbo had always maintained they are private companies owned by Zimbabwean Diasporans. As the Independent continued with its investigations, it also emerged that Zalc's offices are located at 1426 Gletwyn in Harare, a property linked to Psmas manager Mavis Gumbo, although she denies any connection to the airline. Mavis is related to the Transport minister. Despite her denials, details show she is linked to ZimAirways.

Documents gleaned by the Independent and investigations show in October 2016 government entered into an agreement with the Malaysian Airline System Berha for the sale and purchase of four Boeing 777-200ER aircraft with manufacturer's serial numbers 29065, 29066, 28421 and 28422. The agreement was signed by Gumbo and former Mines minister Walter Chidhakwa -- Mugabe and Simba's relative -- on October 10, 2016. In the terms and conditions of this agreement also signed by Lim San Peen of Malaysia, the parties agreed "the aircraft are made available for sale on the basis they are solely to be used for commercial aviation purposes. The intended operator of the aircraft is Air Zimbabwe (Pvt) Ltd."

The initial arrangement was that two of the Rolls Royce-powered planes would cost US$16,5 million each, while the other two would be bought for US$18,5 million apiece, bringing the total to US$70 million.

But Gumbo and his associates later decided to buy two Boeing 777s for US$18,5 million and US$16,5 million, a total of US$35 million. It was also later resolved to buy two Embraers for US$6 million using Treasury Bills. This brought the total of the revised deal to US$41 million.

However, documents show that even if the planes were bought in AirZim's name, the flag carrier's board and management were later kept in the dark after their initial involvement. Chinamasa did not produce documents to back his account.

In yet another glaring example of government's deceit, Chinamasa and Gumbo in their joint statement to painstakingly justify the setting up of ZimAirways said government could only bail out AirZim once the airline has a turnaround strategy. What Gumbo did not disclose was that he had written the foreword for AirZim's strategy for 2018-2020 contrary to his claims.

There are many other misleading remarks and claims told about the story which has left ministers and their cohorts entangled in a web of half-truths, lies and deception.

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