Allafrica.com reported that controversy is brewing over the Zisco-Essar deal amid allegations that Industry and Commerce Minister Wel-shman Ncube pushed through the deal without proper due diligence and allowed Essar to unfairly own 80% of 45 billion tonnes of iron ore reserves (or 33 billion tonnes) from Buchwa Iron Mining Company a subsidiary of Zisco.
Concerns have however, been raised on why such resources are being sold for a song under cloudy conditions that are inconsistent with the strategic partnership agreement between the Government, Zisco and Essar to the prejudice of the national interest.
According to the partnership agreement seen by The Herald, Government owned 89% of Zisco Holdings from which it is set to offload 60% of its shares to Essar.
As a result, Essar was supposed to get 53.4% of the stake in the New Zimsteel that is proposed to replace Zisco as the new joint venture.
Similarly, this should in turn enable Essar to acquire 53.4% of the New Zim Minerals earmarked to replace BIMCO, a Zisco subsidiary that owns the 45 billion tonnes of iron ore reserves which are in the eye of the new controversy along with three billion tonnes of limestone.
Given this position whose parameters are quite clear in the strategic partnership agreement, critics of the deal say Professor Ncube has not up to this point explained how and why Essar's stake in Zisco has moved from 53.4% to 60%.
What is even more curious is why and how what should be Essar's 53.4% shareholding in BIMCO to correspond with its stake in Zisco, has moved to 80%.
This has left Government with only a 20% ownership of a strategic national resource for which Essar has not paid a cent up to now.
In addition to having this unexplained ownership structure which is grossly skewed in favor of Essar, contrary to the country's indigenization laws, it is alleged that Essar has also demanded and has been assured of control of Zimbabwe's electricity and water supplies with unhindered access to the national railways.
(Sourced from allafrica.com)
