PRESIDENT Rupiah Banda says the partial privatisation of Zamtel to Lap Green Networks of Libya can be viewed as being the most successful in the country’s history largely on account of the process that was used by the Zambia Development Agency (ZDA) to structure the transaction anchored on professionalism and transparency.
The President said Government raised about US$433 million from the previous 262 transactions but will this time around make US$257 million in Zamtel’s proceeds and a further US$127 million in guaranteed financing, bringing the total commitment to US$384 million.
He was speaking in Lusaka yesterday when he officially opened the 13th sitting for the Third Session of the House of Chiefs at Cabinet Office.
“Note that of this (US$433 million), the gross mining sector proceeds accounted for US$339 million and the non-mining sectors accounted for the remainder. As can be noted, the Zamtel transaction alone has raised US$257 million in sale proceeds,” he said.
The President appealed to traditional rulers to explain to their subjects the benefits of the partial privatisation of Zamtel to Lap Green Networks of Libya as it is probably the single most successful transaction of the 263 deals undertaken since 1992.
Mr Banda has also advised Zambians against politicising the sale of 75 percent shares in Zamtel because the benefits from the transaction will be immense and that only posterity will judge Government’s decision on the matter.
[pullquote]The President said Government raised about US$433 million from the previous 262 transactions but will this time around make US$257 million in Zamtel’s proceeds and a further US$127 million in guaranteed financing, bringing the total commitment to US$384 million.[/pullquote]
Mr Banda said the proceeds from the Zamtel deal demonstrate the difference that his Government is making in implementing the right processes aimed at bringing about change and stimulate the country’s economy.
He said Government has ensured that a substantial part of the US$257 million proceeds is allocated to the settlement of full terminal benefits for all Zamtel employees as agreed with union representatives.
Mr Banda said this is significantly different from previous transactions like the Roan Antelope Mining Corporation (RAMCOZ) where workers’ interests were not properly represented or accommodated.
He said independent auditors have been appointed to ensure that the package for every employee is correct and paid in full.
Mr Banda said all Zamtel employees will be given a lump sum proportionate to their grade and tenure at the company.
He said about US$98 million will go into the pockets of ordinary Zambians and the country’s economy.
“I hope that our people will invest this money cleverly to enjoy a lasting benefit,” he said.
Mr Banda said before the sale of 75 percent shares in Zamtel to Lap Green Networks of Libya, a concerted and sustained effort was made by ZDA to maximise the attractiveness of the company, improve its efficiency and prepare its other elements for post-transaction change.
“The process of privatisation was transparent and competitive throughout,” he said.
The President said the implementation of the privatisation process took into consideration some of the shortcomings observed in earlier processes.
“We had many bidders-all of them serious- and Lap Green Networks emerged from this competitive and rigorous process as the clear winner,” he said.
Mr Banda said the rigorous process ensured transparency and was done in accordance with the ZDA Act.
He said from the time Lap Green Networks takes over operations of Zamtel this monthend, Zambians will start seeing real change at the company as it will begin to actively compete and innovate in a way a modern telecommunications firm ought to.
The President, however, said that the key objective of the transaction deal was to find the right partner for the company and Government as an ongoing shareholder in Zamtel.
Mr Banda appealed to Zambians not to politicise the Zamtel transaction because without the intervention to privatise it, the company would have collapsed.
He said in its current form, Zamtel is unable to compete in the telecommunications market for various reasons well known by most Zambians.
The President said Zamtel made US$17 million loss in 2008 and more than US$30 million last year and that while its competitors like Zain have over three million subscribers, Zamtel has been struggling at barely 100,000.
“Even in the fixed line business where Zamtel is a monopoly, it has only about 240,000 connectivity,” he said.
He said the situation in which Zamtel is can only continue up to a certain extent beyond which it would collapse.
Mr Banda said Government has a duty to ensure that it safeguards Zamtel’s assets on behalf of the people and as such cannot allow the company to collapse while there are options to save it.
[pullquote]
The President said Zamtel made US$17 million loss in 2008 and more than US$30 million last year and that while its competitors like Zain have over three million subscribers, Zamtel has been struggling at barely 100,000.[/pullquote]
The President questioned the motive of those politicising the privatisation of Zamtel when it is clear that the prime objective of the transaction was to find the right partner that could raise capital, invest in new technologies and improve efficiencies that could help in turning around the company while Government continues to be a shareholder.
“The proof of Zamtel’s failure will not be in my words but in the turnaround that you, the Zambian people, will see at Zamtel within the next year. My Government and I have been criticised for this privatisation.
“But I challenge all Zambians to judge this privatisation by its results, the change they will see from a new and transformed Zamtel,” Mr Banda said.
thank u very much mr president now u are talking.am PF but this move is welcome i work for zamtel and i didnt no weather we were going to get our dues we are happy that zambians have been given a good deal first.now a quick reminder try by all means to prevent job loses.i thank u
We only hope our qualified relatives in the company ll be retained & given the right positions.Let an independent team to the selecting on those to remain & go.There should be no undercut methods or corruption in the selection process.What has costed zamtel is luck of expertism,mindset,low levels of education,empolyees not willing to embrance new ideas,tired minds,etc………
job well done RB and yr govt. I’m not MMD but a good deal is a good deal especially one that benefits Zambians.I’m only sad that this further reveals how Chiluba sold ZCCM for a song.All the mines sold for less of what zamtel has been sold for:((
In absolute terms, Banda’s statement is true. However, anyone worth their marbles wouldn’t compare Zamtel, (a profit making company) to ZCCM (which was losing $2,000,000 per day).
Separation packages, Mr President, are only paid to employess being made redundant and separating from the company.. which means they will have no jobs after this.. your statement is wishy washy and lacks intergrity and lacks any truth.. what we want ot know is the following.. (1) How many employess does ZAMTEL currently have? (2) You RB made it clear in Ndola & Shikapwasha afterwards that Zamtel had the fundermental problems was overstaffing from huge wage bill as of too many staff employed because of KKs employment policy and so the consequence was many would have to be separated and paid to go- We have records of this and aren’t fools.How many staff are losing their jobs?.. My estimate is at least 50%.. tell us. what the number is. 5000?, 2000?, 3000?
Mr President…. YOU LIE !!! how many people are being terminated and what were the terms of retrenchement agreed with the unions.. 2 month salary for every year served? 3 month salary for every year served? 3 times anual basic salary? We have all been to school, thanks to KK, and so know what ” TERMINAL BENEFITS” mean or how they are accrued.. What do you want to lie to people that LAPGreen will re-employ them? silly lies.. Now comparison.. TELECOMMUCATION industry is the most Lucrative world over and Billions of dollars are involved in any exchange e.g ZAIN africa sold for $10.9billion.. How can ZAMTEL go for any less that $1billion with annual revenue earnings of over $250million dollars? and had invested 200 in new project..you will burn for your lies, deceit & corruption..
Oh one other question Mr President.. As you seen to have been the brainchild of this scam and been Sales Director in this transaction, what was your COMMISSION on successful sale and delivery to LAPGREEN shareholders? 1% of Sales Value =$3.8million (K18billion) ? 2% ? I came to a near lynching once when I refused to pay our sales manger his commission for business he brought into the company.. I find it hard to believe that you and your cronies would go through all this, risking your lives and those of your families for nothing?? dude just tell us.. you went to collect your commission cheque in Libya last time te?
The sale of 75% ZAMTEL shareholding to another investor was a positive move.The government is not capable of running a telecommunications entity like ZAMTEL.The new owners will now have to fiercely compete with ZAIN and MTN .The government will however still have control over the entire sector through the Communications Authority(C.A),which will be granting periodic operating licenses to ZAIN,MTN,LAPGREEN and any other new player who will enter the market.My final prayer is that the former ZAMTEL employees get their severance packages quickly and in full.They can later rejoin LAPGREEN or move to ZAIN or MTN.
Next issue to deal with is the un-bundling of ZESCO and shareholding.
Generation-75% Govt,25% private
Transmission-75% Govt,25% private
Distribution-0% Govt, 100% private
#8 Independent… Interesting views.. But I’ll challenge u on ZAIN.. right now there huge public pressure is zambia and Zambia Consumer Protection authority has been petitioned to intervene in cal rates. The company has hidden rates and tariffs that are too too expensive.. We are talking about K1,700 per minute (40 cents) its crazy.. a ka20 pin talktime barely lasts 10 minutes now.. everyone is up in arms. so in theory whats you say is good. but you must understand consumer protection laws, enforcement agencies, publication of tariff, anti-monopoly over pricing LAWS & regulation have to be strengthen as well as offering VODACOM 4th licence if indeed competition is what we are forging here. But RB guaranteed LAPGREEN that VODACOM wont get licence. Where’s consumer benefit?
You must know that ZAIN has been protected by GRZ as far as the Consumer Protection issue above is concerned and now operate with impunity as there’s nothing we consumers can do to them.. Cal in program after program have disappointed Zambians compaining about the company with no help. GRZ turns a blind eye. In the UK celular providers have their tafriss regulated. GRZ refused. now we have LAP GREEN.. all these enture capitalists will do is “right price”.. increase tariffs, making fixed lines out of operational reach to many smaller businesses and house holds. There’s now way their tariff will be lower than ZAMTEL’s current charges. and Zambia business problem is not the products and services but COST OF DOING BUSINESS. COST COST. ZAMTEL was as cheap as it gets in Zambias environment
WELL DONE RB!FORGET ABOUT THE EMPTY MINDS, SOME OF THEM WERE IN GOVT WITH FTJ SELLING OUR COMPANIES CHEAPLY, SOME OF THEM ARE BIG BENEFICIARIES THEY EVEN HAVE MANSIONS AT THE EXPENSE OF RAMCOZ MINERS. SO WHAT CAN THEY SAY REALLY SHAME ON THEM FOR BEING HYPOCRITES. FOR ME SATA AND HH ARE SIMPLE NOISE MAKERS LOOKING FOR VOTES
RB thinks Zambians are fools. This was not about the people of Zambia but to make his children rich and the likes of DORA.
The money shud be used for capitol investment and I don’t mean buying ministers cars or building some some ia some chief’s area. Build malls, revive companies that died coz of master dribller, repair roads in residential areas and so on.
Ba BANDA dont sell what you didnt build;; build your own why do we have such leaders who canot poineer anything, except selling what they have found,and Zambia will go no where with such limited minds in leadership;; have a vision of what you are going to do for Zambians,, not only to think of how you are going to sell; it is a big shame to sell even the little that remained
You leave no loophole for us in the pact to challenge you. you are a clever economist RB. How we wish our main man Sata had the opportunities to set foot in a classroom.
Uncle frank#11; clearly you lack the faculty of reason and common sense, you think on the very spectrum that RB shines his light and clearly you are blinded by the effect. As much as it was a good rather only choice govt may have had as opposed to zamtel goin under, it has its detrimental effects on the employees that are going to lose their jobs and placed out of gainful employment. Zambia has 50% unemployment rate of which 80% live in poverty, RB has made a huge contribution towards those statistics among other things. the only advantage if i can call it that of selling 75% of zamtel is that a more dynamic and innovative company in terms of technology brings competition to the current ZAIN and MTN. By only having a 25% stake in Lap green govt can only collect dividends.
*za* how do u change the flag because am in South Africa not America.