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Ncube Essar frustrations

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Despite concluding one of the country’s largest investment deals in the last decade, Industry and Commerce minister Welshman Ncube is a frustrated man.

The $750 million Essar Global-Ziscosteel deal signed amid pomp and fanfare has turned into a nightmare for Ncube, who has had to move from one ministry to the other, to get all necessary paperwork in place and get the project off the ground.

Delays in implementing the deal have been attributed to political bickering and grandstanding by the coalition government members.

“For those of us coming from the private sector, I found developments in the government frustrating and exasperating at times,” Ncube told business executives who attended the Independent Dialogue Series last week.

“It is embarrassing that you sign an agreement in March last year and things that were supposed to take two months end up taking a year.”

The now defunct Ziscosteel was divided into two new entities — NewZim Steel and NewZim Minerals.

The Indian firm got a special Cabinet approval to acquire a 54% stake in Ziscosteel contrary to the requirements of the Indigenisation and Empowerment Act that require foreigners to hold at most 49% stake in local companies.

Memoranda of understanding (MoU) with Energy and Water ministries have been signed to guarantee uninterrupted supply of power and water respectively.

Additional MoU’s with the Finance ministry and that of Economic Planning and Investment Promotion for investment incentives, have also been signed.

“Essar has since taken charge. The state of affairs at Zisco is such that you have to go there and start rebuilding the plant,” said Ncube.

“What remains are the transfer of assets and you always get excuses. This week (last week) we were attending a mining indaba in Cape Town. The list is endless. We have to keep pushing and keep trying as hard as we can.”

Ncube attributed some of the challenges facing the country to divergent views of political parties, which he said made it difficult for them to agree on anything.

“The coalition partners come from different ideologies with different world outlooks and I don’t think we will ever reach an agreement. If we are able to reach an agreement, it might be watered down.”

The Indian giant firm has pledged to restore Zisco to its installed steel production capacity of 1,2 million tonnes per year within 18 months of assuming ownership.

Essar has since applied for a power-generation licence, that could see it producing 600 megawatts of electricity.

A board constituted by the government and Essar appointees has since been put in place to set the ball rolling and oversee implementation of a turnaround strategy.

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