via Call to investigate Green Fuels | The Herald March 5, 2014 by Farirai Machivenyika

Government must investigate operations of Green Fuels (Private Limited), including the manner in which it was licensed to sell blended fuel without fulfilling indigenisation requirements as well as the value of the investment amid indications it could have been inflated.This was said by Hurungwe West National Assembly representative Cde Temba Mliswa (Zanu-PF) while contributing to a motion moved by Kambuzuma legislator Mr Willas Madzimure (MDC-T) urging Government to capacitate the Zimbabwe Anti-Corruption Commission to deal decisively with graft.

Green Fuels is a joint venture between Mr Billy Rautenbach’s Ratings Investments and state-owned Arda at the latter’s estates in Chisumbanje, Manicaland.

The joint venture claims an investment of US$600 million though this figure has been questioned. Further, it is not majority owned by locals as per empowerment laws, and there have been indications that Arda is not benefiting as much from the deal as it has publicly claimed.

“Last week I asked in this House how the company was given a licence when it had not fulfilled the indigenisation requirements as directed by Cabinet. No one answered that question, if anything the leader of the House (Justice, Legal and Parliamentary Affairs Minister Emmerson Mnangagwa) was sketchy about that. It is important that when questions are asked they should be answered,” Cde Mliswa said.

He said Cabinet was clear that the company would only be given the licence when it had fulfilled empowerment obligations yet a licence was still issued by the Zimbabwe Energy Regulatory Authority in terms of the Petroleum (Mandatory Blending of Anhydrous Ethanol with Unleaded Petrol) Regulations, Statutory Instrument (SI) 17 of 2013 and Petroleum Act.

“The question is who then gave the go ahead for the licence to be given to Green Fuel to trade. Secondly the value of the plant that Green Fuel is sitting was said to be US$600 million. Mr Speaker Sir the entire Zimplants plant with Rolls Royce machinery is valued at US$200 million. Who then approved for the equipment to be valued at that amount?” he asked.

Mr Mliswa said it was also necessary to question Zimra on how the Green Fuel plant got into the country.

He said during the inclusive Government, Energy and Power Development Minister Engineer Elias Mudzuri waas fired after he was fingered in underhand dealings at Green Fuels.

At that time, a Cabinet Committee led by Deputy Prime Minister Professor Arthur Mutambara was appointed to look into Green Fuels’ operations and among its recommendations was that the company operate on 51-49 percent thereshold as per empowerment laws.

Cde Mliswa said the Parliamentary Portfolio Committee on Mines and Energy made similar recommendations but nothing happened.
“There seems to be a culture to ignore what would have been agreed on and there are some sitting here that are part of it,” he said.

The Hurungwe West representative added that it was also not clear who was benefiting from the proceeds of the deal.

“We go to the price of the fuel itself, according to international standards it is the highest,” he said. “We have a situation where people are being forced to buy from a mandatory point of view but the people are not benefiting so the question is who is benefiting?”

E10 blended fuel is selling for between US$1,45 and US$1,50 at service stations in the country.

Meanwhile sources familiar with the origin of the deal told The Herald yesterday that it needed to be revisited.

“There were issues that were raised by the then Minister of Agriculture, Cde Rugare Gumbo when the projected was mooted in 2008 to do with the structure of the deal. Those issues do not seem to have been addressed at the moment,” the source said.

According to a letter written by Cde Gumbo on November 12, 2008, to Arda board chairman Mr Bursil Nyabadza the joint venture did not meet Government approval.

“I write to formally order you to stop the activities being undertaken by Billy Raptenbach’s (sic) Rating Investment at Middle Sabi and Chisumbanje Arda Estates without Government approval. As I pointed out in today’s meeting with yourself and other Arda Board members, I will not tolerate any violation of Government statutes and procedures by your board in the running of Arda.

“In future I would expect you and your board to properly acquaint yourselves with the proper procedures and principles of good corporate governance relating to the running of state enterprises. I also expect you to apprise me on the speedy and immediate implementation of this instruction,” Cde Gumbo said.

Cde Gumbo’s instruction followed a resolution by Arda’s board to endorse the joint venture with Rating Investments at a luncheon held on October 23, of the same year.

Under the agreement reached at the luncheon, Arda would hold a 40 percent shareholding up from the 30 previously agreed with Rating holding the remainder.

Our sources yesterday insisted that the deal was still skewed in favour of Rating Investments as it had majority shareholding contrary to Cabinet’s 2013 directive and the Indigenisation and Economic Empowerment Act.