No easy walk in Zimbabwe for Easipark

2012-01-14 10:12

Parking management services company Easipark has become one of the first South African businesses to fall victim to Zimbabwe’s controversial indigenisation project.

Easipark has been elbowed out of Harare and is still engaged in heated boardroom negotiations with Bulawayo City Council.

Now the Harare City Council has written to Easipark, giving it 90-days notice to cancel the parking deal.

The Indigenisation and Economic Empowerment Act came into effect at the beginning of 2010.

It requires all large businesses, including banks and mining industries, to sell 51% of their shares to indigenous Zimbabweans.

Easipark has been operating in Harare since 2009.

Part of its operations in the capital entailed developing and managing public parking bays.

In the first quarter of its operations the company achieved tremendous growth, with 68% occupancy in the Harare CBD.

The Harare deal was set to last for four years and was subject to review in 2013.

 But two years into its contract, a Zanu PF-aligned business pressure group that goes by the name Upfumi Kuvadiki – Shona for “resources to the youth” – started pushing for a review of the deal last year that would ultimately result in the South African company being sidelined.

“We received their letter of notification but I am not in a position to shed light on what our next step will be,” said Pegias Dube, Easipark’s Zimbabwe representative.

Easipark and the Harare City Council also had differences of opinion over the disbursement of funds.

That became Upfumi Kuvadiki’s entry point, with the blessing of Zanu PF stalwart and Local Government, Urban and Rural Development Minister Ignatius Chombo.

Chombo is involved in a protracted battle with the Harare City Council which is run by councillors from the opposition MDC.

“We have the full backing of the relevant authorities.

We will take over the parking bays.

We will tell the Harare City Council when we have done so,” said Upfumi Kuvadiki spokesperson Alson Darikayi.

In March, the pressure group forcibly invaded the parking bays, arguing that the South African company was milking the country’s lucrative parking business.

According to the deal, Easipark was taking 40% while Harare would take 60%.

The pressure group is bulldozing its way into the parking business using the excuse it is exercising the indigenisation drive.

The group is the brainchild of Minister of Indigenisation and Economic Empowerment Savior Kasukuwere and another Zanu PF heavyweight, Didymus Mutasa.

While Easipark is winding up operations in Harare, in Bulawayo it is still trying to win business from the city fathers.

Last year Easipark and three other South African companies tendered to manage the city’s parking bays.

Easipark won the tender but it was reversed after details emerged of an all-expenses paid trip to South Africa for councillors.

“The issue is back with the tender board.

They (Easipark) may get it or they may not.

The first time around irregularities were raised,” said Bulawayo mayor Thaba Moyo.

Dube said the company is still interested in doing business in Bulawayo despite the setback.

The African Development Bank (AFDB) in its December review of the Zimbabwean economy indicated that forced takeover of businesses would make Zimbabwe a high-risk business environment this year.

The banks said: “The ongoing implementation of the indigenisation and economic empowerment laws, and the expected national elections in 2012 continue to weaken external investor confidence.”

Most Zimbabwean cities do not have foolproof parking systems.

People park their vehicles anywhere, only to be issued with tickets from the city councils, which they easily avoid paying since most of the systems are not computerised.

The amount of traffic in Zimbabwe has greatly increased, largely due to car imports from countries such as Japan, China, Singapore and the UK.

This alone has attracted interest from companies interested in running parking bay systems.

The government has also recently erected tollgates on all the major highways to rake in benefits from the growth in traffic.

Gary Smith from the South African embassy in Zimbabwe said even though the two countries signed a bilateral agreement in 2009, situations such as this one still surface and that they would seek an audience with Zimbabwean authorities.

“It is unfortunate that even though we signed a bilateral agreement with Zimbabwe South African businesses in the country face these problems.

“We will engage with relevant offices, at the moment no South African company has approached us for assistance,” Smith said.

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