Tuesday, 29 May 2012

Essar, Greenfuels Investment Deals and our Incompetent Inclusive Government.

Essar, Greenfuels Investment Deals and our Incompetent Inclusive Government.
By Takura Zhangazha*
There are currently two major investment deals that the government of Zimbabwe is surprisingly unsure about how to proceed with, even after initially approving of them. The first, which was launched amidst much fanfare was the Essar deal that was described as being intended to ensure the revival of ZiscoSteel in the Midlands Province. It is now being reported that cabinet has ordered some sort of review into the deal because apparently we sold the processing plant and the iron deposits for too little.

The other investment deal is the Chisumbanje/Greenfuels one where the Minister of Energy has publicly told the company involved to export its ethanol. Apparently the minister has not seen any cabinet minutes as to a directive that the ethanol from Greenfuels be compulsorily blended with all imported petrol in Zimbabwe. Deputy Prime Minister Mutambara has since told Parliament that cabinet has set up some committee or the other to look into the matter. There are other controversial government investment deals that are not as publicly disputed but these two above cited deals leave one perplexed as to what exactly is going on in cabinet and in the offices of various ministers.

The two deals in question, prior to being approved by the government, had been reported on for a while in the media. In some instances cabinet ministers travelled to various countries to see examples of where the relevant investor had a similar operation. In other instances, particularly as regards the Essar deal, there were further media reports about serious jockeying for the lucrative tender by not only the Indian company but South African companies that were alleged to have strong links to African National Congress (ANC) officials and allegedly the same party's former presidents.

After all the trips, lobbying, verification and other measures had been undertaken, the government, of its own volition, decided to award Essar and Greenfuels the relevant investment contracts. With both deals however, there now seems to be a turnaround by government without adequate reason or public explanation. The versions of these unclear reasons are many, but suffice to say, there can only be something fishy on the part of  cabinet in both cases. The lack of clarity on these two matters is not only appalling, but patently indicative of a government that does not take its work or its own people seriously. 

In fact, it appears that government is more preoccupied with grandstanding about private public partnerships when it does not in the end demonstrate the relevant knowledge of the intentions of the private partner and does not dot the 'i's or cross the 't's when putting pen to paper.  It is rather embarrassing to have a government that argues with itself about an investment that is already approved and already on the ground. Even if one is to assume that in the case of the Essar deal, all that government is seeking is to correct an anomaly, it would be irresponsible on our part as citizens to let cabinet off lightly.

A key question is how does the government not follow up with relevant mining departments as to the content and nature of  iron ore deposits before putting pen to paper? And if a minister is dealing with a multi-million dollar investment deal, to what extent is he/she assisted with the relevant expertise as regards the full implications of the deal? In the case of Essar, it appears that the government did not do its own homework and was quick to claim credit for an investment that invariably has turned out to be a sour one.

Where one reviews the limited public information that is there about the Greenfuels deal in Chisumbanje, one can be forgiven to think that the actual problem relates to community land rights. Instead the problem is that the government agreed to such a massive project, only to say it no longer wants to utilise the end product (ethanol) locally. The relevant minister then advises the investment company, via the media, to 'export' the ethanol. Now, there could be various reasons why the minster has done this, including, perhaps political reasons but what stands to fact is that if cabinet agreed to this deal, it must either cancel it altogether or else see it through.

Moreover, if there are serious differences in the fuel importation  industry, then the minister must openly seek to iron out these differences and explain cabinet decisions for the benefit of not only the fuel oligarchs but also the Zimbabwean public. Where government fails to do this, we would not be remiss to assume that perhaps cabinet is not functioning in the best interests of Zimbabweans.

In both deals, it remains imperative that the government cleans up its act quickly and functions on the basis of demonstrating that it is serious about running this country. Even where the arguments are that the inclusive government does not function fully well, it can only be counter-argued that all cabinets the world over have collective responsibility and as such, botched investment deals are the fault of all political parties that are in cabinet.
*Takura Zhangazha writes in his personal capacity (takura-zhangazha.blogspot.com)