zambia weekly wrap - november 15 edition

Fastjet secures permit to operate domestic routes in Zambia 

London-listed Fastjet managed to secure permits to operate domestic routes in both Zambia and Uganda. The airline’s primary base is in Dar es Salaam but it is looking to raise capital from investors to expand operations to Zambia and Uganda by early 2015. CEO Ed Winter said that this was a significant step along the road to becoming a truly pan-African airline.

Detractors will say that “domestic operators should be given priority” etc but this has been the case for many airlines like Zambia Airways and Zambezi Airlines – both of which no longer exist. The airline industry is a tough place to make money and even more so in Zambia because of high fuel and general costs. Fastjet will introduce more options and more competition for domestic travel which could be a catalyst for domestic tourism (a sleeping giant). The Government has also been working on modalities for establishment of a national carrier but so far nothing concrete. However, they should implement a measure to remove 5% customs duty on aviation fuel as per 2015 budget which will bring some relief to the small airline industry. 

Works at $52m Lunzuwa Hydropower Station complete

Upgrading of the Lunzuwa Hydropower plant from 0.75MW to 14.8MW in Northern Province has been completed.  Once online, the plant will supply power to Mpulungu, Mbala and some parts of Kasama. However, commissioning has been delayed because of the low water levels at Musonda Falls.

The start of the rainy season should see the power plant come online over the next few weeks as water levels begin to rise. Business and social service delivery should see some marked improvement in the areas under coverage – ZESCO will also be able to save money because they will cut down on the usage of diesel generators. The total generation capacity increases to 2,324.8MW as of 2014 which is still only slightly above a third of Zambia’s potential.

Independent report finds flaws in Kangaluwi mining project

A 76 page independent report by Dr. Kellie Leigh (PhD) investigating the proposed Kangaluwi mining project in Lower Zambezi National Park found key issues which were not fully addressed by Australian miner Zambezi Resources and said that the information provided by the miner was fatally flawed (amongst other things). There is an ongoing court case over the matter which is up for hearing on November 17 2014. The hearing will be the first attempt by the High Court to interpret the provisions of the Environmental Management Act (EMA) of 2011, with respect to the powers a Minister has over decision-making by the Zambia Environmental Management Agency (ZEMA).

Key findings of the report include flawed documentation process, flawed underlying economics, negative tourism impact and a few others. As I said in a previous post covering this subject, I am biased against this Kangaluwi mine because it weighs a finite project likely to impose irreversible damage on a pristine environment against more sustainable projects like tourism and agriculture which can benefit future generations. I will be keeping an extra special eye on the developments surrounding this case.

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