A boardroom shake-up is looming at the Zimbabwe Iron and Steel Company (Ziscosteel) after the government and Indian firm Essar Holdings agreed to appoint a new board soon after the conclusion of the deal.
There are however indications that some ministries in the government were dragging their feet in guaranteeing the new investor uninterrupted supply of water, electricity and transport before operations commenced.
Industry and Commerce minister Weshman Ncube told NewsDay yesterday the finalisation of the Zisco and India deal hinged on the conclusion of a number of Memoranda of Understanding (MoU) from various government ministries including Transport, Water, Power, Mines and Finance.
He said Essar had asked the government, who were previously Ziscosteel’s majority shareholder to provide guarantees for uninterrupted supply of critical services.
“Officials are now dragging their feet, we have been talking front and back. We are now waiting for the conclusion on the conversation we are currently having,” said Ncube.
“We are trying to make sure all the conditions are met then we can begin implementation,” said Ncube
Ncube said a new July 31 deadline had been set to try and tie up loose ends of the deal adding that the Zisco-Essar deal would be put to rest once all conditions have been agreed upon.
“If all conditions are fulfilled, there will be a new board elected. Essar will select three board members and the government will select two,” Ncube said.
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“The MoU with the Ministry of Water Resources, Development and Management for continuous supply of water has been finalised but is now awaiting approval from Cabinet,” said Ncube.
“An MoU from the Ministry of Transport and Communication for the continuous use of rail transport to move coal has been completed and is now awaiting approval at the Attorney-General’s Office.
“Another MoU from the Ministry of Mines, to ensure consistent supply of coal, has not yet been finalised and negotiations are under way,” said Ncube He said the Ministry of Finance has to facilitate a project grant for the Zisco project.
Essar Africa which now holds 54% in Ziscosteel is expected to invest significantly in rehabilitating and repairing rail infrastructure to ensure consistent supply of coking coal from Hwange.
It will in the medium term also invest in a new power plant to avoid interruptions caused by crippling energy deficits rocking Zimbabwe.
Essar has made a commitment to spend over $740 million towards reviving Zisco, which has not been operating for a couple of years.
The Indian firm inherited the steelmaker’s debt, estimated at $340 million and salary-related arrears amounting to $22 million.
