Tuesday, October 21, 2014 Local time: 21:30

News / Economy

President’s Office Takes Over Troubled Essar, Zisco Deal

The President’s Office is now handling negotiations with Indian conglomerate, Essar Africa Holdings, to implement a 2010 deal giving Essar a majority stake in the Zimbabwe Iron and Steel Company (ZiscoSteel).

ZiscoSteel board chairman Nyasha Makuvise said the matter was taken over by the executive after Industry Minister Welshman Ncube and Mines Minister Obert Mpofu seemed unable to agree on the way forward. 

Speaking before the parliamentary industry and commerce committee in Harare on Tuesday, Makuvise said the President’s Office set up a committee to spearhead efforts to conclude the deal following a cabinet directive to implement the deal with Essar last December,.
 
Makuvise was accompanied by ZiscoSteel chief executive Alois Gowo, who said he and other ZiscoSteel heads are not primarily involved in the ongoing efforts but are only consulted to provide information about the company from time to time.
 
But the two said following their meeting with the ministerial committee two weeks ago, they are optimistic that operations at ZiscoSteel might soon resume. They could not give an exact date, however, saying they are not involved in the details of the implementation.
 
Makuvise told parliament that a speedy implementation of the deal would help the country in many ways and improve the plight of over 3,500 workers.
 
The two said they are doing everything they can to ensure that workers receive at least a bit of money but noted that the company cannot afford to meet the regular payroll when no production is taking place.
Report Filed By Irwin Chifera
Report Filed By Irwin Chiferai
|| 0:00:00
...
 
🔇
X

The government signed a $750 million deal with Essar to revive ZiscoSteel but implementing the deal is on hold over differences between the industry and commerce and mines ministries over its terms, including access to iron ore reserves.
 
Mr. Mpofu wanted to revisit the terms of the deal because Essar was to pay only $750 million for iron ore reserves he said are worth more than $30 billion. But in December last year cabinet said the deal should stand as it is.
 
In response Tuesday, members of the parliamentary industry committee said they are concerned at continued delays in finalizing the deal and questioned why ZiscoSteel board members and managers are not on the implementing committee.

Essar Aftrica Holdings bought a 53 percent stake in the defunct parastatal and changed the company's name to New Zimbabwe Steel Limited.

Radio