Parliament will push to complete processes around the Zimbabwe Iron and Steel Company (ZISCO) Debt Assumption Bill by end of next month to aid the takeover of the giant steelmaker by Chinese firm, Tian Li, an official said yesterday.
Tian Li, a subsidiary of the Hong Kong listed R&F Properties in August last year agreed to invest up to $2 billion in ZISCOsteel, but the deal is held up by a $494 million debt the steelmaker has accumulated over the years.
Government gazetted the ZISCO Debt Assumption bill at the end of January to give Tian Li a clean slate and the Parliamentary Portfolio Committee on Finance and Economic Development is this week conducting public hearings on the bill in Harare (Monday), Kwekwe (Tuesday), Gweru (Wednesday) and Bulawayo (Thursday).
Zhang Li, the founder of R&F Properties and Tian Li’s parent company, was in the country last week and met with officials from the Industry ministry, ratcheting pressure on government to resolve the debt issue.
“This bill has a lot of urgency. We will conclude the public hearings this week and prepare our reports but we are targetting that all parliamentary due processes would have been completed before the end of April,” the committee chairman David Chapfika said after a public hearing in Kwekwe.
The bill showed that ZISCOsteel’s debt stood at $494 million as at December 2016, with $211.9 million of that being external loans owed to KFW (Germany), Sinosure (China) and Sumitumo (Japan) who is owed $6 million.
Domestic loans amount to $57.7 million while domestic suppliers, utilities and statutory obligations are at $219 million.
Former workers asked members of the committee if the Bill makes provision for outstanding salaries to be paid as a matter of urgency.
“The government should take full responsibility of the bill as it was a mistake they made, it is the government mistake which they did and they should take the bill. I am 100 percent for the government taking over the ZISCOsteel debt and reviving the company. But there is need to address issues of former workers and the pension fund as well,” a former ZISCOsteel site foreman Robert Rose said at the hearing.
A planned Extraordinary General Meeting planned for last month to seek approval from minority shareholders for the Hong Kong-based firm Tian Li takeover was postponed indefinitely, according to officials.
The restart of ZISCOsteel, which was the biggest integrated steel manufacturer in Africa before its collapse in 2008, is seen as key to reviving Zimbabwe’s economy.
Its resuscitation would also be crucial to the operations of Hwange Colliery Mine and the National Railways of Zimbabwe (NRZ), which are both struggling but are in the midst of implementing revival programmes.
A 2014 study by the Zimbabwe Economic Policy Analysis and Research Unit (Zeparu), stated that Zimbabwe lost over $20 billion in potential revenue as a result of Ziscosteel’s collapse. – The Source