IDC loses $71m in glassmaking deal

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THE Industrial Development Corporation (IDC) has failed to recover $71 million from the Romanian government 14 years after the Zimbabwean government partnered the South-Eastern European nation in a glass manufacturing deal that failed to materialise, an official has said.

Business Reporter

IDC and Romsit, a Romanian parastatal, entered into a deal to manufacture glass sheets.

IDC spokesperson Derrick Sibanda in an interview yesterday said the
$62 million is for the expropriation of the company’s rights while $9 million was for interest charges.

“We have lost money as a company since 1999, so the $62 million is for the expropriation of our rights as shareholders. Romsit failed to provide the appropriate technology for the manufacturing of glass sheet for IDC unit National Glass in Kadoma,” he said.

Sibanda said Romsit South Africa has been ordered to pay $4,2 million by the 1999 determination by the Paris-based International Court of Arbitration for failure to comply with the terms.

He said the figure was up to $9 million due to interest charges.

IDC has failed to secure the funds as Romsit has been privatised after the deal leading to IDC’s failure to get compensation.

Sibanda said IDC demanded compensation for the “expropriation of IDC’s rights” from the Romanian government through the International Court for the Settlement of Investment Disputes.

“IDC has been greatly prejudiced by the non-performance of the Romanian contractor, (Romsit) and because of this failure a sheet glass making plant is lying idle in Kadoma and hundreds of jobs were lost,” Sibanda.

He said Zimbabwe was presently importing all its sheet glass while such a plant existed.

“The amount paid in damages could be utilised for rehabilitating the glass plant as well as implementing the numerous Greenfield projects which IDC is currently pursuing,” he said.

The parastatal has another glass manufacturing unit Zimbabwe Glass Industries  in Gweru that   produces 110 tonnes of molten glass which translate to 135 000 bottles of 375ml beer bottles per day.
IDC invested $5,5 million into Zimglass together with a consortium of banks.

1 COMMENT

  1. Why am I not surprised..after all this is the IDC..by the way how many companies under their portfolio are still functioning and how many people are still employed by this monolithic monstrous clay footed entity? Given its past record of cannibalising companies in its portfolio and turning them into effluent when is it going to be put to pasture?

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