Govt borrows US$88m from project contractor

Finance minister Mthuli Ncube.

GOVERNMENT has signed a US$88 million loan deal with Fossil Mines (Private) Limited for the construction of the Mbudzi Interchange in Harare. Ironically, Fossil Mines is a sister company to Fossil Contracting — one of the firms involved in the Mbudzi Interchange project.

In a general notice 131B of 2023, Finance minister Mthuli Ncube said the loan agreement was signed on December 6, 2021.

“The loan interest rate shall be London interbank offered rate plus 5% per annum. The grace period is a period of nine months on the principal amount. The final maturity date for the loan is June 6, 2025,” the notice read.

“The loan facility shall be utilised for the sole purpose of funding the construction of the Mbudzi Interchange and Divergence Routes Road Infrastructure Project. The financier shall oversee the project implementation and disburse directly towards the project implementation.”

In December, the United States  government placed Fossil group chief executive officer Obey Chimuka and two of his  companies — Fossil Contracting and Fossil Agro — on the sanctions list.

 Fossil Contracting is one of government’s biggest infrastructure contractors.

The Mbudzi Interchange project is expected to ease congestion at the intersection along the busy Harare-Beitbridge Highway.

Government says 51 owners of properties which were demolished to make way for the multi-million dollar Mbudzi Interchange will be compensated.

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