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Zesa switches off Ziscosteel

by Staff reporter
16 Nov 2021 at 05:41hrs | Views
ZESA has disconnected power supply from the defunct giant steel manufacturer, Ziscosteel, over a ZW$40 million debt.

Zisco group chief executive officer, Dr Farai Karonga, confirmed the development yesterday and said the figure has been accumulating since the company ceased operations.

Ziscosteel used the same power supply line with Redcliff Municipality, ZimChem and another Zisco subsidiary, BIMCO, which have been negatively impacted by the development.

Dr Karonga said other entities such as Redcliff Municipality, were consuming most of the power in the water pumping process.

"The debt is historical as it dates back to the days when the company stopped operating. It is a legacy debt that was accrued over a long period of time," he said.

"But I'm glad to inform you that the Government is committed to paying the bill and as we speak, the issue is being addressed," said Dr Karonga.

Comment could not be obtained from Zesa. However, the power utility is on record saying its operations were being frustrated by individual and corporate clients who owe it millions of dollars.

The Government assumed all Ziscosteel debts under the Zisco Debt Assumption Act. Redcliff uses 70 percent of power while ZimChem, which is located within the Ziscosteel plant, consumes 22 percent with the remainder being used by Zisco and Bimco.

Dr Karonga said plans were underway to disband the line so that each institution can have its own supply line and for accountability purposes.

The development comes at a time when chemical producer, ZimChem had completed the refurbishment of its boiler in readiness to start production of tar, which is critical in the ongoing road rehabilitation programme.

Dr Karonga said the disconnection of power supplies will have a negative impact on businesses around Zisco.

"As Ziscosteel we have had to rely on the use of diesel generator, which is not only expensive but also can only supply power for a short time. ZimChem is the worst affected as they have since ceased operations," he said.

"As you might be aware, they were now commencing the production of chemicals for use in the road rehabilitation but that has since been derailed," said Dr Karonga.

The development will also see Redcliff residents failing to access potable water if the matter is not addressed. After the refurbishment, ZimChem is now working on increasing capacity utilisation to about 60 percent.

ZimChem is already working in partnership with Midlands State University (MSU) towards developing homegrown solutions to maintenance and rehabilitation of the country's roads.

MSU is working on using waste asbestos from Mashava-Zvishavane Mine to produce silicone, which will be mixed with coal tar to produce a product that will replace bitumen.

The development comes at a time when the adjudication process for Zisco potential investors is underway as the Government ramps up efforts to revive the company. Zisco has received bids from seven potential investors from which one will be given the task to revive the steel giant.

The company is pursuing a roadmap that involves modernisation and financial sustainability.

The Redcliff-based steel manufacturing firm ceased operations in 2008 due to poor management and poor capitalisation.

Source - The Chronicle