HomeNewsZisco board redundant: Parly told

Zisco board redundant: Parly told

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THE Zimbabwe Steel Company (Zisco) board, responsible for spearheading the conclusion of the $750 million steel production deal between government and Essar Africa Holdings (Essar), has not been sitting since 2011 as the multi-million investment continues to stagger, a company official has said.

Report by Tarisai Mandizha

Appearing before a Parliamentary portfolio committee on Industry and Commerce, New ZimSteel chief executive officer Alex Gowo on Tuesday said the move had delayed progress as management remained unaware of major developments at the steel maker.

Currently, Gowo said, management was communicating directly with the chairman, while it remained unclear how the chairman had been communicating with other directors.

“The board last held a meeting in December 2011 and as far as we know, we have been communicating with the chairman of Zisco as there has not been a change legally on the structure of the board,” Gowo added.

Gowo said lack of information on the developments concerning the Essar deal was disturbing as management was not fully aware of what was happening. A new board comprising representatives from both Essar and government, including the Essar resident director of Middle East, Africa and Turkey, Firdhose Coovadia and former Zisco board chairman Nyasha Makuvise, was appointed in January 2012.

Gowo said: “We also have been informed of the other board, but whether it is operating or not, we are not sure. Maybe it’s because of the challenges that are being faced with the negotiations.”

On Wednesday, Finance minister Tendai Biti said parties involved in the deal should speed up its implementation.

“Protracted negotiations between the strategic partner, Essar Holdings and the government have delayed the process of rehabilitating the Zisco plant. Given the importance of Zisco, there is need to expedite the negotiations and bring the matter to finality,” he said.

Earlier this year, a cabinet resolution was made that the Office of the President and Cabinet (OPC) should take over the discussion of the deal.

Gowo said the company was not cognisant of the composition of the committee from the President’s Office, adding that he was informed the OPC had taken over discussions.
“As far as the company is concerned, we still recognise there is a board and that it has not been dissolved,” he said.

Last month, the OPC took over the co-ordination of the takeover of Ziscosteel by Essar Africa in a bid to bring closure to the multi-million dollar deal signed two years ago.

In March 2011, the government and the India-based investors agreed on a $750 million takeover of Ziscosteel, but the deal has not been consummated due to haggling over iron ore deposits.

The deal was first signed in August 2011, giving Essar 54% control of the new company NewZim Steel.

As part of the deal, Essar, was also awarded 80% ownership of NewZim Minerals with the government holding the remaining 20%.

The Indian company has, however, failed to commence operations after the government moved to reverse its decision on the grounds that the value of its iron ore claims should be verified first.

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