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Kennedy Chokuda

Farirai Machivenyika, Harare Bureau
Government has gazetted the Zimbabwe Iron and Steel Company (Debt Assumption) Bill, H.B 2, 2018 to take over about $500 million owed to both domestic and external debtors.

The Bill was published by Clerk of Parliament Mr Kennedy Chokuda under General Notice 117 in an Extraordinary Government Gazette  published on January 19.

The parastatals owes $494 817 324 to both domestic and external creditors.

A schedule of the Bill indicates the company owes $211 912 400 in external loans, $6 095 620 to external suppliers, while $219 113 219 is owed to domestic suppliers, utilities and statutory obligations and $57 696 085 in domestic loans.

Clause 3 of the Bill shows the debts consist of liabilities incurred by Zisco before January 1, 2017, those validated and reconciled by the Debt Management Office and liabilities arising out of a Government guarantee or undertaking.

Clause 5 of the Bill says the Debt Management Office, when validating and reconciling claims, will require copies of the loan agreement or contract, other documents supporting the claim that include shipment schedules showing commodities supplied, quantity and price, initial balance, disbursements made, payments effected and the dates and principal amount of claim and interest.

Zisco stopped operations in 2008, making redundant more than 5 000 employees.

Attempts by two Indian firms to revive its operations have, for various reasons, failed since then.

In 2006, another Indian company, Global Steel Holdings Limited, was given management control of the firm after promising to inject $400 million in a rehabilitate, operate and transfer arrangement, but the deal failed to materialise under unclear circumstances.

Another Indian firm, Essar Africa Holdings, also signed a deal with Government in 2011 to revive the steel giant in a transaction valued at $750 million.
The deal also collapsed due to a number of reasons, including differences in the then inclusive Government.

At its peak the company was integral to the economy as it supported other companies and downstream industries.

Government has made revival of Zisco’s operations a priority and a Chinese company, R and F Company, has pledged to invest $1 billion in the undertaking.

Government has already signed a framework agreement with the company.

Besides reviving the company, the Chinese firm also intends to expand steel processing and production of stainless steel products.