REPRESANTATIVES of NewZim Steel workers yesterday claimed that Essar Africa Holdings has not injected money into the firm since its takeover.
Report by Veneranda Langa
The workers told Parliament’s Industry and Commerce Portfolio Committee that instead, the new management last year borrowed $13,5 million from CBZ to pay a salaries debt using Ziscosteel assets as collateral security.
The Ziscosteel Joint Workers Union led by Bennedict Moyo was giving evidence before the William Mutomba (Buhera North MP)-led committee on the state of affairs at the steelmaking firm.
According to the deal, Essar Africa Holdings was expected to invest $750 million into Ziscosteel now known as NewZim Steel to resuscitate the plant and equipment.
According to the workers, their salaries had been sustained through selling sundries like metal scrap.
They claimed $5,5 million raised from the sale of iron ore from Bimco Mine just disappeared into thin air while they wallowed in poverty.
“The $13,5million borrowed from CBZ to pay our outstanding salaries was an Essar debt taken using Ziscosteel assets as guarantee, and the way the loans are structured was such that when the deal is complete Essar will pay, but if the deal failed there was no guarantee that they will pay,” Moyo said.
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“No one is paying attention to the plight of the 3 500 workers who depended on that plant and as we speak, $5,5 million iron ore from Bukwa was sold and up to date the money just disappeared into thin air.”
According to the workers, the parent ministry (Industry and Commerce) had ordered the $5,5 million to be removed from the Bimco Mine account where it had been deposited. The workers complained that they were not consulted when the deal was negotiated.
They also claimed that the creation of a parallel management structure had caused a lot of problems for them because neither Ziscosteel nor Essar was taking care of the workers’ plight.
“There is no coke oven to talk about as well as the steel furnace or plant. We need at least 36 months to be comfortable,” Moyo said.
“Number four blast furnace was damaged and it will take 18 months to start working, while number three furnace will take about six months to start working.”
