A million-dollar deal between privately-owned Limsol Trading and Kwekwe City Council to save the local authority’s traditional beer brewer, Simba Breweries, has collapsed after the private partner pulled out.
Acting city treasurer Morris Mutema told council Limsol had pulled out of the public-private-partnership deal which had seen council hand over operations and assets of the loss-making counter to the firm.
Operational challenges at Simba Breweries forced Limsol to close shop six months after taking over from council in March 2010.
The closure has reportedly affected 51 employees who have not been paid their salaries since January last year.
The workers have taken the matter to the High Court.
Mutema said council was now in the process of auditing its assets before it takes over the beer brewing company.
“We now have the keys of Simba Breweries and are carrying out an audit before we take over the plant. This is after Limsol wrote to us advising council they are pulling out of the deal for reasons they explained in the letter,” he said.
Last year, Limsol director Gary Crause told NewsDay his company was pulling out of the deal because the local authority was acting like an “unfaithful partner”.
“We can’t continue to be involved in this deal because council is behaving like an unfaithful partner.
“They say things in public which we never agreed to and now it looks like we are out to loot Simba Brewery which is nothing, but a shell,” said Crause.
But council maintains Limsol breached contractual agreements and therefore the local authority had no obligation to pay Limsol for developments at the plant.
“We have consulted our lawyers who told us that it is Limsol who breached the contract, and therefore we have no obligation to them although we will be engaging them on a way forward.”