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Parliament Committee Tables Troubled Zisco Deal

Parliament’s industry and commerce committee heard about the troubled Zisco-Essar deal today from Zisco board chairman, Nyasha Makuvise.

Surprisingly, committee chairman William Mutomba barred the media from attending the hearing after Mr. Makuvise said he would be sharing what he called “sensitive information.”

The Zisco-Essar deal was signed in 2010. Three years on, it remains troubled.

The media was not allowed in today’s hearing but previously the parliamentary committee had warned that Zisco’s privatisation was in danger of collapse as ministers continued to row over the transaction, fearing Essar Africa Holdings may be forced to withdraw from the deal because of delays.

Workers’ representatives Benedict Moyo and Obert Shoko Bishi, whose statements were heard by the press, accused Industry Minister Welshman Ncube, the president’s office and Essar for sabotaging the deal.

Moyo and Bishi said employees were suffering as a result of lack of payment and anxiety over their future.

The president’s office is now responsible for the $750 million deal, but implementation remains bogged down by political bickering between the industry and mines ministries.

Moyo said the payments issue is dire, with some employees facing eviction soon.

Ziscosteel chief executive officer, Alois Gowo, told the committee that some service providers have started legal proceedings against the company to recover money owed to them.

Gowo, who told the committee three months ago that production was set to resume anytime, said he is not involved in negotiations to revive the company and has no clue when things might fall into place at the troubled parastatal.

The government signed the $750 million deal to revive Ziscosteel under a new company called new Zimbabwe Steel Limited but it has not been finalised because of differences between the industry and mines ministries over its terms, including access to iron ore reserves.

Gowo said they are still operating as Ziscosteel, adding that money invested into the company appears as loans in Ziscosteel books.

Gowo is, however, optimistic that the deal will be finalised soon so that production may resume.
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