THE impending visit by top officials from India’s Essar Holdings next month to finalise the agreement on the takeover of Ziscosteel is a dose of good news for the Midlands.
Ziscosteel now called New Zim Steeel has been in limbo for years despite Essar, one of the world’s leading steel companies taking over a large stake from the government in a deal worth $750 million in 2011.
The deal, a once-in-a-blue-moon boost for investment-starved Zimbabwe, has been stalled by endless squabbles over mineral rights.
Delays in resuscitating the steel giant have come at a heavy cost for the economy at large and Midlands cities of Kwekwe and Gweru in particular whose industries heavily relied on Ziscosteel operations.
However, it is the town of Redcliff that has suffered the most because of Ziscosteel’s demise as it mainly emerged as a settlement for the company’s employees.
The former employees who have not received proper salaries for several months have been turned into destitutes.
Redcliff Municipality coffers are running dry because residents cannot pay for services, raising the spectre of disease.
Therefore the announcement by Industry minister Mike Bimha in the National Assembly on Wednesday that the revival of the company is still on course could not have come at a better time.
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The long-drawn takeover deal needs closure, not only to rescue the Midlands cities and towns that are on the brink, but also to restore investor confidence in Zimbabwe.
There is no doubt that the treatment of Essar by the government has been followed with keen interest in India.
An amicable conclusion of the deal would certainly assure Indian investors that Zimbabwe is worth exploring.
New Zim Steel owes foreign and local creditors $300 million and $200 million respectively.
The debts cannot be settled as long as the company is not operational, and that means trouble for creditors.
