Wednesday’s event also saw the launch of New Zimbabwe Minerals (formerly Buchwa Iron Mining Company).
This brings to closure the disposal of government’s 54% stake in Zisco after Essar won the bid for the shareholding last year.
The new marriage “made in heaven” is touted to bring back life to Redcliff as Zisco was the single largest employer.
Essar’s anticipated US$750 million investment is a major boost for the economy starved of cash for many years. At least 3 500 jobs would be created in the process.
The revival of Zisco would cascade to other ancillary industries.
An ambitious plan would see the refurbishment of the plant to deliver a production capacity of 0,5 million tonnes per annum in 12 to 18 months.
Over the years, the town of Redcliff had watched as management ran down the steel giant which had the potential of being the best in Africa.
In 2006, Redcliff heaved a sigh of relief when Indian behemoth Global Steel Holdings Limited (GSHL) was given management control of Zisco for 20 years under a Rehabilitate, Operate and Transfer arrangement.
The deal would have resulted in GSHL injecting US$400 million for the rehabilitation of the Zisco plant components, particularly blast furnace, coke oven batteries, LD furnace and rolling mills.
But GSHL will not be receiving an equity stake in Zisco. The investment would be in tranches and disbursed within 18 months, the nation was told.
Lalit Seghal assumed the reins sending Gabriel Masanga packing after over a decade at the helm of the parastatal.
However, it later emerged that GSHL was a fly-by-night company which wanted to fleece Zisco.
On Wednesday, President Robert Mugabe blamed successive Zisco management for running down the company.
Investigations by Standardbusiness show that the previous board made recommendations to restructure the company but the “advice” was resisted from above, mirroring the problems at state enterprises where the “jobs for the boys” policy is prevalent.
A Zisco board turnaround plan in 2005 recommended the replacement of Masanga and job cuts as part of reforms at the troubled parastatal.
The board then sacked Masanga with the blessing of then Minister of Industry and International Trade, Samuel Mumbengegwi.
A team of human resources consultants was commissioned to restructure Zisco’s top-heavy staff structure.
Two teams investigating a raft of mismanagement allegations at Zisco — a Reserve Bank of Zimbabwe unit and the National Economic Conduct Inspectorate (NECI) — were deployed. Before the team could start its work, Masanga was back at Zisco after the Ministry of Industry and International Trade ordered the board to reinstate him.
Analysts say the model used at the former Zisco should be replicated at all parastatals to relieve pressure off the fiscus which has been bailing out organisations.
Government recently annou-nced that 10 parastatals would be disposed.
Parly report exposes GSHL as bogus investor
A report compiled by the parliamentary portfolio committee on Foreign Affairs, Industry and International Trade unearthed serious irregularities in how GSHL was operating.
The report questioned whether due diligence was ever done before GSHL was given control of the parastatal on a silver platter.
“GSHL is reported to be facing a lawsuit for improper conduct in Texas, USA for receiving the concession to run Nigeria’s Ajaoukuta Steel Company Limited, with allegations of corruption and bribery cited,” the committee said.
GSHL was chosen on the basis that its contract with a Nigerian company had resulted in output rising from zero to two million tonnes of hot metal in two years, a strong balance sheet with an asset base of US$8 billion, the holistic nature of investment in upgrading the related support infrastructure and the investment capacity to add value to Ziscosteel’s products.
The committee report said GSHL held a meeting with Knight Frank, property managers of Pearl House, to increase rentals and backdate such increases. Ziscosteel’s Harare offices are located at Pearl House.
“If the increase had been entertained by the finance division, Ziscosteel would have been prejudiced of Z$433 373,” the committee said.
It said that GSHL had informed a South African supplier of graphite electrodes, Ucar to increase the price to R31 450,50 from R26 560 a tonne.
The committee said: “This would have also resulted in a prejudice to Ziscosteel of R58 686 for 12 tonnes on order.”