State to take over US$600m ethanol firm
14/05/2013 00:00:00
by Staff Reporter
THE government is set to take over a controlling 51 percent interest in the
US$600 million Green Fuel ethanol project in a deal that is expected to pave
the way for the resumption of operations at the company’s Chisumbanje plant.
According to state radio, a deal was now being finalised which will see the
company’s shareholding structure fall in line with the country’s
indigenisation laws, helping save the jobs of some 4,000 workers.
Energy and Power Development Minister Elton Mangoma said Cabinet recently
discussed the problems bedevilling the project adding an inter-ministerial
committee led by deputy premier Arthur Mutambara would, this week, clarify
the way forward.
“The issue was discussed in cabinet and we have adopted a decision which
will be made public by Professor Arthur Mutambara in few days’ time,” he
said.
The project, developed by Green Fuel, a joint venture between private
investors who include millionaire tycoon Billy Rautenbach and the state-run
agricultural development firm ARDA had stalled after failing to win
government approval for mandatory blending of ethanol and petrol.
Launched with a promise to significantly bring down the country’s fuel
import bill, the project ran into problems as the government expressed
concern over various issues including the company’s shareholding structure.
The project also faced allegations that hundreds of villagers had been
irregularly displaced without compensation to make way for its vast sugar
cane plantations.
But in March, Vice President Joyce Mujuru, concerned about the plight of the
workers, ordered the re-opening of the Chisumbanje plant which was closed in
February 2012 after stocking up the maximum 10 million litres of ethanol
that its storage facilities will allow.
“The people are troubled because their hopes of a better livelihood have
been extinguished by the closure of the ethanol plant,” Mujuru said. “There
is no justification for closure, so this plant must be opened.
“When Billy approached us, we said: ‘Thank you.’ But is what’s happening the
best way to treat an investor? No, No, No! Some of the demands being made
[by ministers] are outrageous.
“By closing the project, we are deliberately inflicting suffering on the
people whose benefit from this project is our responsibility. We are guilty
of omission. We must separate developmental issues from politics. Consider
the ethanol plant opened.”