THE dealmaker of a project, which has been on the cards for 13 years to construct Zimbabwe’s second oil pipeline linking Beira in Mozambique and Harare, said this week major headways had been achieved towards kick starting the deal, as government insiders claimed it had been abandoned.
Eddie Cross, a former presidential advisor, told the Zimbabwe Independent that despite no movement on the US$850 million project, parties to the deal were on track.
He said the governments of Zimbabwe and Mozambique would be updated once a bankable feasibility study was in place.
To position Zimbabwe as the hub for the transportation of refined petroleum products in southern Africa, the state-run National Oil Company (Noic) and South African-based Coven Energy Limited agreed to establish a joint venture (JV) in 2010.
The two parties would each control 50% shareholding of the pipeline.
Cross, working with the then energy minister, Elton Mangoma, played the deal marker’s role. He put forward the US$850 million budget. Mangoma, a Movement for Democratic Change (MDC) legislator at the time, was the energy minister during the government of national unity era from 2009-2013.
This week, Cross claimed the JV has been established, marking the first steps towards implementation of the transnational pipeline deal.
“The joint venture between Coven Energy of South Africa and Noic has been finalised and it is now operational,” Cross said.
- Society must change its negative perception on disability
- Entertainment galore as showbiz regains its spark
- DeMbare coach demands consistency
- A Chinese miner’s response to the raging investment question
“A consultancy has been appointed to start work on the projects. This involves the detailed bankable feasibility study, which will be submitted to regional governments for approval.”
He said the mega deal would be strategic for Zimbabwe and was designed to whittle down congestion on the port of Beira and transform Harare into a regional hub for fuel.
Vivian Mandizvidza, corporate services director at Noic, said the firm was not in a position to comment on the deal.
“Given the nature of your inquiry, I advise that the appropriate authority to give you a comment, response or issue a statement on the issue is the Ministry of Energy and Power Development,” Mandizvidza said.
Newly appointed Veterans of Liberation Struggle Affairs minister Christopher Mutsvangwa, who had reportedly been linked to the project, said he had no commercial interests in the deal, which was seen as vital in ending acute fuel shortages that rocked Zimbabwe at the time.
Foreign currency shortages in Zimbabwe affected the flow of oil into the country until about five years ago, when government came up with a policy allowing retail outlets to trade in foreign currency.
But even as markets indicated that shortages were stemming out of poor policies, authorities felt Zimbabwe was being sabotaged by foreign monopolies.
In an interview, Mutsvangwa said the deal, commonly referred to as the Mining, Oil and Gas Services (MOGS), could only be explained by Cross.
He said in 2010, he was only speaking against monopolies in Zimbabwe’s oil sector, and outside his push for a fair playing field, he had not invested in the project.
“People say it is my project because I said we don’t want monopolies,” Mutsvangwa said.
“But I have nothing to do with it. I am not involved and the person who can give those details is Eddie Cross. He is the best person to give you a correct position.
“Check with the leadership at Noic and Cross. Noic are the regulators of the industry. They should be able to give that information,” he said.
The existing pipeline, which is controlled by Noic, is the only infrastructure pushing oil products from Beira to Harare.
It is used by several fuel companies.
Those opposed to a second pipeline see it as a commercial threat to the status quo.