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Workers Cry Foul As Essar, Zisco Deal Remains Dormant

Zimbabwe's parliament heard pleas Tuesday from distraught New Zimbabwe Steel Private Limited workers, who want the government and Essar Africa to iron out their differences over the $750 million acquisition deal that gave the Indian firm 60 percent of Ziscosteel, so they can get their livelihoods back.

Worker representatives told a parliamentary committee that the Indian steel giant is no longer paying them following the government's announcement it was studying the deal, which it says was grossly undervalued.

Essar Africa acquired 60 percent of Ziscosteel and 80 percent of Buchwa Iron Mining for $750 million dollars last year but the government says it's now trying to renegotiate the deal.

Last week deputy Prime Minister Arthur Mutambara told parliament the deal was very much to Zimbabwe's disadvantage.

Head of delegation Benedict Moyo said more than 3,000 workers and their families are now suffering as a result of the impasse.

The government sold its 60 percent shareholding in the then Ziscosteel to Essar resulting in the formation of New Zimbabwe Steel Private Limited some 14 months ago.

Essar then took over the payroll but stopped paying employee this month after government reneged and said it was studying the deal though sources say the 60 percent shareholding had already been transferred to the steel giant.

Moyo believes workers are being sacrificed in the government's negotiations with Essar, charging Industry Minister Welshman Ncube had failed to satisfactorily answer them, allegedly telling them President Robert Mugabe and Prime Minister Morgan Tsvangirai were unhappy with the deal.

Besides the 3,000 New Zimsteel employees, there are thousands other workers in down stream industries such as Bimco and Lancashire Steel, who will also be affected by the collapse of the Essar deal.