Industry and Commerce minister Welshman Ncube says the Essar Africa deal to takeover of the now defunct Ziscosteel, was the best available for the country.
The $750 million deal has been dogged by challenges resulting in its implementation being stalled, as ministries in the inclusive government continue to haggle over mining claims required by the Indian investors to breathe life into the steel giant.
Ncube on Monday said nobody could have foreseen the challenges the deal was going to encounter.
“I am not sure if one would have foreseen the problems because up to now I don’t understand the problem,” he told journalists at the Quill Club in Harare. “This is something I inherited from (Mines and Mining Development minister Obert) Mpofu (who is the former Industry and Trade minister).
“Whoever was going to come was going to inherit the problems.
“I still believe that this is the best deal that was available for Zimbabwe. We should never forget that Ziscosteel was a bankrupt company under sanctions and had debt in excess of $400 million. It had no capacity to pay, given the state of Zisco at the time it was put up for tender.”
Ncube said it would have been cheaper for Essar to buy land and start a new plant than to revive Ziscosteel.
He said that was one of the reasons why Chinese investors that had expressed interest walked away, as they wanted a special vehicle to underwrite the debt.
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As part of its commitment to the deal, Essar agreed to take over the debt owed by the government, pay Ziscosteel workers salaries of $2 million every month and to replace obsolete equipment.
In addition, the company pledged to resuscitate the Munyati Thermal Power Station.
“I don’t know what better deal one would ask for,” he said.
He said he had failed to meet the 12 months deadline set by the government to operationalise Ziscosteel since 2009 despite it being one of his main mandates.
“My mandate when I became the minister of Industry and Commerce in 2009 was to have Ziscosteel opened within 12 months and 36 months later, it is still closed,” he said.
“Unlike the other minister, I can’t sit back and say I am disinterested. It’s our job to push for the revival of Zisco.
“That was one of the terms of reference that I had when I came into office.”
