New Zimbabwe.com

More woes for Ziscosteel as creditors feast on dead govt firm

By Staff Reporter

MOUNTING legal woes continue to dog the Redcliff based integrated steel works, Ziscosteel following the closure of the company over a decade ago.

Ziscosteel Chief Executive Officer (CEO) Alois Gowo said despite the assumption of the Ziscosteel debt by government in 2017, additional financial liabilities and associated obligations are continuing to mount.

“Government retrenched its entire workforce in 2016 including the CEO,” Gowo said while giving oral evidence before the Joshua Sacco led Parliamentary Portfolio Committee on Industry and Commerce Friday.

He said government only retained a skeletal staff on temporary basis to man the company and also to interface with possible investors.

The arrangement, according to Gowo, is however presenting a challenge as the company is now accumulating associated costs.

“We are picking up costs which are difficult to service considering that we are not producing anything to generate revenue.

“The major challenge we are facing are mounting legal challenges. We continuously have some creditors taking the legal route so as to recover their debts,” he said.

Gowo added, “Of late the challenge is less on those creditors whose liabilities were captured in the Debt Assumption Act.

“The fact that we have remained here, we are picking costs particularly service providers. They expect to be paid and sometimes turns to be a legal case.

“We have cases of former employees and current employees. We have kept the shareholder (government) informed of the developments.”

The CEO told parliamentarians that they have been sending yearly budgets proposals to the parent Ministry of Industry and Commerce to have funds disbursed so as to cater for minimal operational issues as well as salaries for the reduced staff.

“That has not been honoured,” he said.

“The parent ministry managed to put together through Treasury in 2016, a million dollars and a few creditors.”

Gowo said if government failed to intervene on time, “nothing will be left to be salvaged as some employees forming the skeletal staff are fed up and leaving. We are fighting to secure the assets at the plant.”

The biggest elephant in the room, according to Gowo, are the creditors and liabilities which the company picked after the debt assumption.

For instance, since the assumption of the Zisco debt by government, the Parastatal is owing nearby Redcliff municipality $4,1 million.

Top three debtors are the Ministry of Finance Debt Assumption $14, 7 million (formerly Zisco Debt), Ziscosteel $4,1 million and Steel Makers $0,59 million, financial documents from Redcliff indicate.

Government took over Zisco debts under the Debt Assumption Act in 2017 after retrenching all employees in 2016.

Majority owned by the State, the company effectively stopped production at its Redcliff main plant in 2008.

Government then only started to settle workers’ salary arrears following a court order after lawyers representing workers moved in to attach the company’s properties.

The Sheriff of the High Court had moved in to attach the company’s vehicles, machinery and other movable properties.