adminSenior Business Reporter
INDUSTRY and Commerce Minister Mike Bimha yesterday said the delay in the resumption of operations at the New Zimsteel, formerly Ziscosteel, was a result of outstanding engagements between the investor and creditors over the company’s debt repayment plan.The government and an Indian conglomerate Essar Holdings signed a $750 million deal to revive the former iron and steel giant in 2011.
Part of the conditions of the deal required the new investor to settle a debt amounting to $300 million and $200 million owed to foreign and local creditors respectively.
Minister Bimha said in Bulawayo that outstanding issues had nothing to do with policy issues anymore.
“There have also been engagements between the investor and creditors so that they come up with their own agreed ways of repayment.
“We’re meeting Essar officials next week with a view to see how best we can speed up the process,” he said.
The minister said progress on the Essar deal was now a question of speeding up the implementation.
“The government has given its support. The investor is willing and committed to continue. What we need to do is to speed up the implementation process. On further analysis of the plant, it has been discovered that a lot has been happening in those years when the plant was idle.
“There has been a lot of sabotage, a lot of erosion and there has been decay to a point that 65 percent of the plant has to be reconstructed so it’s more like building a new Zisco,” added Minister Bimha pointing out that this was also a factor leading to delays in resumption of operations at New ZimSteel.
During the inclusive government era, the Essar deal was stalled by the political bickering that existed between political parties.
The Redcliff-based steel manufacturing firm suspended operations in 2008 at the height of economic meltdown.
It is hoped that the operationalisation of New Zimsteel would go a long way in improving liquidity situation in the country through exports as well as supporting downstream industries, which at present are closed owing to operational constraints.
At its peak, Zisco, which is a strategic firm for the country’s economy, employed more than 4,000 workers producing about 750,000 tonnes of steel annually.
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