Council last month resolved to put in place an interim board that will oversee the running of Easipark Holdings until a new board is set up.
This development comes after Easipark Harare failed to declare dividends to council which led council to take over sole operation of the parking business in September 2013.
Easipark is a joint venture parking business that was formed in 2009 through an agreement between City of Harare (CoH) and Easihold Proprietary Limited of South Africa.
However, endless squabbles have characterised the deal leading to councillors pushing for cancellation of the deal arguing that the City was not benefitting much from the arrangement. Some media reports alleged that at least $1.2 million has been siphoned off from the Easipark company accounts while CoH claims to have received no dividends since August 2010.
Council’s business committee that sat in June noted that updated reports on the way forward to resolve outstanding issues concerning Easipark had not been submitted. The committee was also concerned about the composition of the management committee considering that members of the Easihold committee were not attending meetings.
“The committee (Business Committee) further noted with concern the alleged disposal of Easihold shares in this joint venture agreement to a third party without the consent of council and was convinced that this was a clear breach of the joint venture agreement by Easihold Pty of South Africa,” read minutes of the business committee meeting.
The committee was however advised by the acting corporate services director that the delay in submitting reports was a result of the arbitration process where the joint venture agreement was cancelled. Agreeing on terms of disengagement and asset sharing was a time consuming process.
The committee then resolved to appoint an interim board comprised of the deputy mayor, town clerk and the head of the city’s business development unit to run the entity with immediate effect. The resolution was later adopted by the 1835th full council meeting which sat early last month.
The interim board was tasked to make sure that a properly constituted board of directors is appointed to run the company as soon as possible.
“The interim board should prepare for the amalgamation of Easipark (Pvt) Ltd and City Parking (Pvt) Ltd to undertake the parking business in the City and to ensure that dividends were paid to the City of Harare,” read part of the resolutions of the business committee.
Council’s other parking company City Parking (Pvt) Ltd is reportedly doing well as it has been constantly providing revenue to council. In the first quarter of this year City Parking is said to have remitted $40,000 to council while a total of $250,000 is projected this year.
“The town clerk reported that City Parking (Pvt) Ltd commenced operations in the parking business in January 2013 with seed capital of $1.1 million that was advanced by ZB Bank of which (the) loan has been fully paid off,” read the business committee minutes.
Many stakeholders have over the years argued that council’s parking businesses has got potential to realise vast revenue for council, which might in turn go towards better service delivery for the City.
However, council is faced with many challenges in the running of the parking business which include shortage of equipment and competition from parking touts who are now wide spread in town. Hopefully, the new interim board will be able to address some of these issues.