From: barnhart@ddsw1.MCS.COM (Mr. Aaron Barnhart)
Subject: IPS:ZIMBABWE: HIGH PRICES THREATENS TRUCK HAULAGE BUSINESS
Date: Fri, 18 Dec 1992 03:12:30 GMT
Organization: Evanston, Illinois, U.S.A.

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Reference: Trade & Finance
Title: ZIMBABWE: HIGH PRICES THREATENS TRUCK HAULAGE BUSINESS


an inter press service feature

by andrew zhakata

harare, dec 9 (ips) -- the supply of vehicles in zimbabwe has
improved but government's ''excessive duty and sales tax'' on
heavy duty trucks has seen them being parked at assembly plants
waiting for buyers.

duty and sales tax imposed on new trucks by government are
currently at 35 and 15 percent respectively. these charges
coupled with the devaluation of the zimbabwean dollar last year
to encourage exports and control imports have dramatically
pushed up prices of heavy vehicles.

as a result, the cost of a new heavy- duty vehicle has risen
from the equivalent of 115,000 dollars to 178,000 dollars,
63,000 dollars of which account for duty and sales tax.

it is even more expensive for transporters to buy the trucks
on hire purchase because the charges -- with a 52 percent
interest rate -- are also prohibitively high, says, mark ginson,
manager of 'collegne transport'.

the high prices have adversely affected the sales of trucks
in zimbabwe. long-haul transporters who are desperately in need
of new trucks to replace their ageing fleets have resorted to
importing 10 year-old trucks from the united states leaving
brand new trucks gathering dust in assembly plants in zimbabwe.

for example, sales of newly assembled erf heavy-duty trucks
from hubert davies, zimbabwe's biggest heavy vehicle assembler,
have been at a standstill since february this year because local
transport operators cannot afford the duties imposed.

hubert davies bought 440 erf kits from britain last year
using a 8.53 million dollar british government grant. keith
battye, chief executive of hubert davies, says of the 340 erfs
assembled, 270 were sold and the remaining 70 have not found
buyers.

another 100 trucks are still in kit form in bulawayo,
zimbabwe's second largest city, waiting to be assembled.
demurrage charges, container rentals and storage of assembled
trucks are daily losses for hubert davies.

''hard currency was paid for the kits but someone is failing
to take a decision to abolish the heavy taxes so that we can
sell the trucks'', adds battye. (more/ips)


zimbabwe: high (2)

road haulage plays a pivotal role in landlocked zimbabwe
where agriculture is the mainstay of the economy and accounts
for almost 50 percent of foreign exchange earnings.

the transporters serve agricultural, manufacturing and
commercial sectors collecting the country's maize output and
other crops to respective depots and distributing inputs like
seed, fertilizers and chemicals to farmers.

hauliers are also used in international traffic for exporting
minerals, metals, textiles and clothing, machinery and transport
equipment earning zimbabwe about 120 million dollars in foreign
currency per annum and making the transport sector one of the
major foreign currency earners.

the current devastating drought gripping southern africa, has
also posed a challenge for road transport to move seven million
tonnes of grain needed for the over 18 million people at risk in
the 10 southern africa development community (sadc) member
states.

''but our viability is now threatened by excessive duty and
sales tax which must be scrapped immediately. we desperately
need new trucks to replace our ageing fleet, but we can't buy
them because of the exhorbitant prices'', adds ginson.

a spokesperson for the zimbabwe's transport operators
association (toa) which represents 105 freight operators and
passenger vehicle owners, says a large number of zimbabwean
transport operators register trucks in neighbouring countries to
avoid punitive taxes in zimbabwe.

''botswana dropped duty on trucks and there is no duty on new
trucks in malawi. south africa charges five percent duty. our
viability is being threatened by this inequality of the playing
fields in neighbouring countries and government must support us
by scrapping duty on trucks'', says the spokesperson.

commercial transporters, says toa, need an average of 200 new
vehicles a year for the next ten years to replace their fleets.
currently 49 percent of the over 2,000 trucks on the road are
more than eight years old and another 34 percent will reach the
end of their life before the end of 1993.

the current lifespan for heavy vehicles in zimbabwe has, out
of necessity, been extended but ideally they should be replaced
after between four or five years. (end/ips/az/oa/92)