Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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More troubles for Arda, Green Fuel deal?

More troubles for Arda, Green Fuel deal?

Written by Business Writer
Thursday, 14 June 2012 16:04

HARARE – As agriculture minister Joseph Made has disowned Green Fuel’s 
multi-million dollar deal with the Agricultural Rural Development Authority 
(Arda), it has emerged that the parastatal could have violated its own 
mandate and statutes on agricultural development.

While Authority chairperson Basil Nyabadza claims the closure of the 
southeastern Zimbabwe project may jeopardise the company’s entire 
operations, inquiries by businessdaily have shown that Arda could have 
violated Section 18 of its Act, which govern its land leases.

“State land specified… shall not be granted, sold, leased or otherwise 
disposed of to any person other than on the recommendation of the 
Authority,” the laws say.

“Where State land specified… has been granted, sold, leased or otherwise 
disposed of to the Authority or to any subsidiary company referred to in 
Section Twenty, such land shall not be granted, sold, leased or otherwise 
disposed of to a third party by the Authority or that company, as the case 
may be, without the approval of the Minister and the appropriate Minister,” 
added Section 18(5) of the same Act.

On Monday, Made said Cabinet had concluded that the built-operate-transfer 
(BOT) arrangements between Arda and Billy Rautenbach’s companies were “null 
and void” — meaning the projects were undertaken without government’s 
wholesome approval.

However, Green Fuel maintains the Bot agreements were in compliance with the 
country’s laws, specifically Section 17 of the Arda Act and done with the 
approval of Nyabadza’s board, and senior management at the time.

Under the contentious deals, three companies namely Green Fuel, Macdom and 
Ratings Investment are in the business of processing sugarcane, and ethanol, 
but President Robert Mugabe’s government is calling for a review of the 

According to government’s latest demands, the state will now hold a 51 
percent share in the project, while 39 percent will go to the investor and 
10 percent to the local community.

While the tycoon’s companies are enjoying 20-year leases on land where the 
sugarcane is being grown, there are fears or concerns that the partnerships 
are heavily tilted in the private investors’ favour and since Green Fuel is 
not part of the Bot arrangement, Arda is not benefitting significantly from 
the deals.

“The ethanol plant is also built on… land being leased from the Chipinge 
Rural District Council, so what benefit will this bring to Arda at the end 
of the 20 years? Will the ethanol plant also be transferred to Arda?,” said 
an analyst.

“Rating (operating at Arda Middle Sabi Estate) and Macdom (operating at Arda 
Chisumbanje) are 100 percent owned by the investor, and Arda is not a 
shareholder (in these entities), and neither does it have management and 
board representatives. So who then monitors production income for Arda’s 
information and who determines the price the cane is bought at?,” they said.

While hundreds of thousands of acres of land are under cultivation and Green 
Fuel had produced over 10 million litres of ethanol by January, the company’s 
push for mandatory blending are also facing serious resistance due to 
concerns that this would be akin to creating a monopoly.

As things stand, Energy minister Elton Mangoma has said the company is free 
to export its product.

In recent months, Rautenbach’s company and government have also clashed over 
the former’s refusal to provide its cost build-up, and other regulatory 


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