PARLIAMENT yesterday grilled Finance ministry officials
over a US$5,2 billion coal project spearheaded by Verify Engineering which
failed to attract investors due to the poor investment climate prevailing in
the country.
Last year, President Emmerson Mnangagwa announced that he
had clinched a US$5,2 billion coal-to-liquid deal with South African investors,
but up to now the financiers have not showed any seriousness due to the poor
investment climate and regulations in the country.
Director of public sector investment programmes in the Finance
ministry, Fidelis Ngorora and joint ventures unit director Graciano Nyaguse
appeared before the Daniel Molokele-led Parliamentary Portfolio Committee on
Higher Education, where they were asked to explain why the project had
stagnated.
The Verify Engineering project was initiated by the Higher
Education ministry to promote research and development.
Molokela expressed dismay at the lack of seriousness in
implementing the project, saying: “As Zimbabwe, we have not been taking
seriously the advancement of technology which can actually reduce our import
bill, and we are told that Verify Engineering is not well-funded, yet there are
a lot of low hanging fruits. This is a big issue right now since there is
shortage of foreign currency and yet we are spending a lot on gas, electricity
and fuel imports instead of developing our own technologies.”
He said currently, Zimbabwe was getting hospital gases from
BOC Gases, a foreign company when Verify Engineering had the capacity to
produce gas. Verify Engineering, he also said, had the capacity to develop a
600 megawatt Mkwasine Power Plant for electricity as well as convert coal to
fuels.
Ngorora said the project had failed to attract investors.
“If you look at the annual budgets by the Ministry of
Finance (2017 National Budget was US$4,7 billion), it will take us two to three
years to leave funding of everything else and fund this project. We funded
establishment of Mkwasine coal fields and a mini plant in Feruka, but the
funding goes to salaries and operations support, but we were unable to mobilise
funding for the next step of the project,” Ngorora said.
Nyaguse added: “Verify Engineering identified a South
African partner, Magcor Investments, but later they sent a proxy, Nkosinathi
Investments to represent them. Verify Engineering then undertook visits to
identify potential companies in China to manufacture equipment for conversion
of coal to fuels, but they demanded to see the feasibility study first.”
He said the Chinese said the feasibility study would cost
US$50 million and government was unable to fund it, and yet it is a pivotal
condition for the investment.
The two government officials said as a ministry, they had
not met the investors who dealt with Verify Engineering. They said investors
only put money in bankable projects, where feasibility studies are carried out
to ensure that they recoup their money. Other conditions demanded by investors,
the officials said, were guarantees from government that they would repatriate
the money that they would have invested and in the event that the money made is
in local currency, that they will be able to convert the money into US$ and
repatriate it. They said these conditionalities were also affecting
public-private-partnerships in the electricity sector.
Warren Park MP Shakespeare Hamauswa said it was
disheartening that after the announcement by Mnangagwa that he had found
investors for the project, nothing has happened yet.
Mutasa South MP Regai Tsunga blasted Finance secretary
George Guvamatanga for ignoring the committee’s invitation to explain the
stagnation of the project. Newsday
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