by Grace Chekai
An Inter-Ministerial meeting is reported to have been held recently and anonymously resolved to recommend to cabinet to nullify the ZISCO-ZimCoke deal because of irregularities inherent in the agreement, the Harare Post can report.
The Inter-Ministerial meeting follows the resolution reached by cabinet in the 60th meeting on 21 May 2020 where it was agreed that the ZISCO and ZimCoke deal must be reviewed and the Ministry of Industry and Commerce was directed to convene an Inter-Ministerial committee meeting urgently.
Cabinet also said that the review process of the deal must be initiated and a clear road map to revive ZISCO must be reached at.
A contact with Zimbabwe Iron and Steel Company (ZISCO) board revealed to this publication that subsequent to the cabinet directive, an Inter-Ministerial meeting was held on 28 May, this year and attended by Minister of Finance and Economic Development, Professor Mthuli Ncube, Minister of Industry and Commerce, Dr Sekai Nzenza, Minister of Mines and Mining Development, Winston Chitando and interim ZISCO board Chairperson Dr Gift Mugano.
After presentations, all ministers agreed to notify cabinet to nullify the deal citing flaws in that pact and other irregularities in the agreement.
Some of the flaws which were cited included; the evaluation of assets, demarcation of boundaries, and the control of shared infrastructure at the integrated steel plant.
According to the contact, ministers expressed their reservations on the transfer of 34 percent Government shareholding in ZimChem to ZimCoke without the evaluation of shares and the transfer of assets to ZimCoke without agreement on retiring of the US$ 225 million debt.
The debt asset swop agreement signed on 29 March 2019 between ZISCO as represented by former board Chairperson Nyasha Makuvise and ZimCoke entailed a takeover of coke plant made up of four coke oven batteries, a piece of land measuring 323, 3431 ha, lot of 5 Ripple Creek Estates, which is ZISCO land in Redcliff measuring 2,339,6 ha in total of which 493,1169 ha was allotted for further development of Torwood township, ZISCO`s 34 percent shares in ZimChem and eighty five ZISCO specialised coal wagons.
Contact said over and above, the stated assets demarcation was done unilaterally by surveyors hired by ZimCoke.
It was revealed that when this deal was proposed, the understanding was that ZimCoke would in exchange for the coke oven, take responsibility for the repayment of the ZISCO debt to KfW of Germany amounting to US$ 225 million, and inject a further US$ 133 million for the removal of the coke plant.
However, KfW is reported to have refused to release the Government of Zimbabwe to cover the ZISCO debt, and has insisted that the ZimCoke-Government of Zimbabwe understanding on the US$ 225 million debt was thereby a bi-lateral arrangement between the two parties, and as such KfW could not be compelled to surrender the Guarantee on that basis.
