Concern as Zisco Steel Debt Assumption Bill yet to be implemented

By Staff Reporter

Redcliff Legislator Lloyd Mukapiko has raised concern over the slowness in the implementation of the Zisco Debt Assumption Bill which he says is yet to materialize and benefit ex-workers who are living in poverty.

Speaking to this publication earlier this month Mukapiko said government must expedite the Debt Assumption which he said was gazetted a year ago.

He also said government must settle the ex workers severance packages in hard currency as the value of the bond note has been eroded.

“The bill was assumed a year ago and to date we are yet to see any progress in that regard. The situation will make us question government’s sincerity in settling the debt,” Mukapiko said before he was arrested for public violence charges.

In September 2017 Government availed $38 million as part of the outstanding salaries backdated to 2009.

Government then agreed to settle the salary arrears in tranches.

The windfall came following an attachment of the company’s properties.      

The law maker also called on government to pay severance packages in US dollars.

“Government must pay the ex-workers workers their severance packages in US dollars considering the economic environment were the bond note has lost value. We don’t want to see a situation whereby workers will be robbed of their life savings,” he said.

Zisco Steel workers Lawyer Deviuos Mujaya said the debt assumption bill has made it difficult to sue the government.

“There is a clause within the bill which makes it difficult to sue the government following the debt assumption bill. We are however, going to find ways which we can employ so that the government will honour its obligations,” he said.

Meanwhile Redcliff Town Clerk Gilson Chakauya told councillors in a full council meeting late last year that the Zisco Steel debt to Redcliff Municipality was acculumulating.

“The debt owed by Zisco Steel has increased to $18 million as we are seeing an accumulation of $330 000 per month,” he said.

Chakauya indicated that the company appeared not willing to pay as council had engaged the parastatal on numerous occasions to no avail.

Redcliff submitted a 414 million debt to government.

Redcliff council is dividing on the issue as some councillors are calling for a debt write off, whilst others feel the write off will totally cripple the local authority.

Meanwhile, Ziscosteel Chief Executive Officer Alois Gowo said there are waiting for the government’s response on the issue.

“We are also waiting for them to pronounce its position on the issue. All debts taken over continue to accumulate. The government has not yet started paying off the old debt and the new debt and our management is not preview to the government’s plan,” he said.

In 2006, an 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 materialize under unclear circumstances.

Another Indian Firm, Essar Africa Holdings, also signed a deal with Government in 2011 to revive the steel giants in a transaction valued at $750 million

The deal also collapsed due to a number of reasons.

Government also had a Chinese investor R and F who pledged to invest $1 billion in the undertaking.

Now in a comatose state, Zisco Steel, once one of Africa’s integrated steel works stopped production at its Redcliff base in 2008.

Majority owned by the State, the company effectively stopped production after being crippled by corruption, poor management and political interference.

In August 2016, the company retrenched its entire workforce.

The layoffs followed the collapse of a multi-million-dollar revival deal by India’s Essar group.

In 2011, former President Robert Mugabe with his then power sharing Prime Minister the late Morgan Tsvangirai, signed the company’s elaborate takeover by Essar group.

The deal never came to fruition after serious bickering within the deeply divided inclusive government.

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