You are here:Home>Senate Hansard>SENATE HANSARD 16 MAY 2018 Vol 27 No 41

SENATE HANSARD 16 MAY 2018 Vol 27 No 41

PARLIAMENT OF ZIMBABWE

Wednesday, 16th May, 2018

The Senate met at Half –past Two o’clock p.m.

PRAYERS

(THE HON. PRESIDENT OF THE SENATE in the Chair)

ANNOUNCEMENT BY THE HON. PRESIDENT OF THE SENATE

BILL RECEIVED FROM THE NATIONAL ASSEMBLY

          THE HON. PRESIDENT OF THE SENATE: I have to inform the Senate that I have received the Insolvency Bill [H. B. 11, 2016] from the National Assembly.

MOTION

RATIFICATION OF THE LOAN AGREEMENT FOR SMALLHOLDER IRRIGATION REVITALISATION PROJECT

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Madam President, I move the motion standing in my name:

THAT WHEREAS, subsection (3) of Section 327 of the Constitution of Zimbabwe provides that an agreement which is not an international treaty but which has been concluded or executed by the President or under the President’s authority with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe does not bind Zimbabwe until it has been approved by Parliament;

AND WHEREAS, the loan agreement between the Government of Zimbabwe and the OPEC Fund for International Development (OFID) relating to US$15 million Loan Agreement to co-finance the Smallholder Irrigation Revitalisation Project (SIRP) in Manicaland, Masvingo, Midlands and Matabeleland South Provinces:

NOW THEREFORE, in terms of Section 327 (3) of the Constitution, this House resolves that the aforesaid Agreement be and is hereby approved.

 

Madam President, the Government of the Republic of Zimbabwe and OPEC Fund for International Development (OFID) signed a Loan Agreement amounting to US$15 million to co-finance the Smallholder Irrigation Revitalisation Project (SIRP), and the signature was on the 8th of March this year.

The loan facility has a tenure of 20 years, inclusive of a five year grace period and will attract an interest rate of 2.5% per annum, and this is inclusive of 1% administration charges.

Madam President, the objectives or goal of the project is to reduce rural poverty by helping households in the targeted areas to achieve food and nutrition security and to become resilient to adverse climate change.

The objective will be achieved through the implementation of the following:

·       Rehabilitation and development of irrigation infrastructure for 6 100 hectares;

·       Provision of technical assistance and conducting of feasibility studies for possible expansion of existing schemes by 2 000 hectares;

·       Rehabilitation of over 100 kilometres of farm roads and construction of small bridges;

·       Construction of a Multi-purpose Post-Harvest Management Centre;

·       Procurement and installation of equipment; and lastly,

·       Enhancement of institutional capacity through strengthening for AGRITEX, the department of Irrigation and targeted farmers’ organisations.

Madam President, the project will directly benefit 15 000 households in existing schemes and 12 500 households in adjacent rain-fed areas, covering a total of 8 000 hectares.  Further, employment opportunities for about 2 000 youths will be created and training of 500 extension and technical service providers.  The project will support sustainable development in Masvingo, Manicaland, Midlands and Matabeleland South Provinces.

Madam President, the total project cost is 51.68 million.  The OFID Loan Facility of US$15 million is over and above the US$25.5 million grant which was availed by the International Fund for Agricultural Development (IFAD) in November, 2016.  The Government of Zimbabwe and beneficiaries will contribute US$7.9 million and US$3.8 million respectively towards the project.  The US$15 million is therefore a top up to meet the project cost of US$51.68 million.

          Madam President, the project will be implemented over a period of seven years and preparatory works commenced in July, 2017 with the support from IFAD.  The Ministry of Lands, Agriculture and Rural Resettlement is the executing agent responsible for the implementation of the project.

          Madam President, in order to ensure smooth implementation of the project, a project coordinating unit was established under the Ministry of Lands, Agriculture and Rural Resettlement to oversee the day to day operations of the project. 

          Before I conclude, let me again just summarise the salient features of the land facility:

Borrower

Government of Zimbabwe (represented by Ministry of Finance and Economic Development)

Lender

OPEC Fund for International Development (OFID)

Executing Agency

Ministry of Lands, Agriculture and Rural Resettlement

Loan Amount

US$15 million

Date of Signature

08 March, 2018

Interest Rate

One and half percent (1.5%) per annum on the principal amount of the loan

Administrative charges

One and half percent (1.5%)

Other charges

Nil

Maturity

Twenty (20) years

Grace Period

Five (5) years

Principal repayment period

Fifteen (15)Years (30 semi-annual installments

          With these remarks Madam President, I commend this loan agreement for the approval by this august House.  I thank you Madam President.

          HON. SEN. MUMVURI:  Thank you Madam President.  I want to thank the Minister for bringing this agreement into this august House and I just want to say a few comments in support of the agreement.  All the conditions sound very well and very attractive indeed.  I think what I want to ask is, in the paper given here, there are amounts for works and consultants but there are no figures for procurement and installation of equipment materials and the purchase of vehicles.  This is where I want to come in.  We have a fully functioning Ministry of Lands, Agriculture and Rural Resettlement.  So, when this loan comes in, the purchase of vehicles, I think it is immaterial because we have a full functioning Ministry already which is there.  So, why include the purchase of vehicles.  This is where there is some misuse of the funds.

          There is also no figure indicated for training and workshops.  I think what is important is to transfer the technology to the locals if these funds become available.  That is the most important thing – to transfer technology which they bring in so that it remains here when the agreement is over.  So, those are my concerns, otherwise I want to welcome this agreement.  As I said before, it sounds very attractive and we cannot afford to lose it.  I want to thank you.

          HON. SEN. KHUMALO:  I also stand to thank the Minister for the agreement that he has brought to us.  I am appreciative because of the issue that it is going to increase the food and nutrition improvement.  While I also appreciate that within the training so that the people who are being trained whether it is the community or those in leadership, they should also be trained on the issues of nutrition. They should not link just with production but, they link the issues of nutrition into the programme.  Remember that we signed a protocol which is called the SUN in 2011 where we agreed that we will work with all the other countries as Zimbabwe to reduce malnutrition by 2025, we will reduced stunting by 40%.  The reduction cannot happen if there are these opportunities which are there and we do not include the issue of the food mixes because it is not just the practice. People have to know how to mix food because we have stunting, not because we have no food.  There is plenty of food in Zimbabwe but people have not been educated on the issue of knowing how to mix food.  So, I am requesting that the nutrition issues be really part of the training.

          What also interested me is that we are covering different provinces and I hope we are going to ensure that youths in those provinces are the ones who are trained so that we do not end up with youths from other areas coming to working while local youths are lying under the bridges.  Thank you Madam President.

          HON. SEN. B. SIBANDA:  Madam President, I thank you.  First, let me thank the Minister and really give him a pat on the shoulder and say today he does not have reason to say, ‘better late than never’ because he has responded timeously.  The tabling is within a two month period from the date of agreement. I think that is the action that I personally want from Government – responsiveness and quick action.  Minister, thank you very much for being quite proactive.

          Secondly, there is a component that goes towards procurement.  Whenever we talk about procurement in our country, sometimes I shudder and think that there may be fissures that may result from corrupt activities.  Can the Minister assure us that those fissures will be closed, not only for this loan but for any other financial activity in the country?  The third thing that I want to contribute on is the involvement of beneficiaries; I think you said that part of the repayment will come from beneficiaries.  It is a positive thing; it increases their buy-in and ownership of any project that is instituted in this land and I commend that it also reduces the psychology of over dependence on any finance, be it from Government or donors.

          The fourth and probably the last comment is that irrigation for me guarantees us future food sufficiency and when a nation learns to feed itself right from the basic family right up to the national level, it is a nation worth its salt. In that project you indicate that there are 2 000 youths. I am not against youths being employed. I am actually for youth but ensure that other people benefit and also on a lighter note, I hope that system, the underlining of the youth is not politicizing the loan because the youths are the in-thing. Let us hope that it is both sincere and will  activated to benefit everybody who is employable within the area of making the project successful. I thank you with those comments.

          *HON. SEN. MAKWARIMBA: I am grateful to the Minister for bringing this motion into this august House. This is the intention leading to development in the three provinces and it is common knowledge that the provinces where this project will be undertaken are arid areas with very little rainfall. When irrigation projects have been launched in these provinces, there is going to be development, food and job creation targeted at the youngsters. We know that when an irrigation project is launched, there is a lot of work which needs a lot of labour to do the work but above all we are talking about food security.

We are grateful to the Minister for bringing this project on time hoping the implementation is going to be good. The implementation agent is the Ministry of Lands but am asking if it has the capacity to carry out this projects as it involves the construction of roads. How are they going to cooperate with other agencies or local authorities like DDF and local authorities, because if these are included in such projects there will be progress. This will enhance repayment of these loans. I also propose that beneficiaries be included in this project they are in the project from the time of launch to implementation and there will be a sense of belonging and ownership. I thank you.

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I want to thank all Hon. Senators who have contributed in support of the loan facility from OFID. Allow me Madam President to respond specifically to the points raised by individual Senators.

          Hon. Sen. Mumvuri, thank you very much. What I said in my speech is that the $15 million is towards co-financing. The whole project as I pointed out is $51, 680 million and we are financing it through, first a grant from IFAD of $25,5 million and Government and beneficiaries are going to contribute $7,9 and $3, 28 million respectively. So, when you look at the blank portion of the loan agreement where we do not give any figure from page 8 of the loan agreement, it means of the total cost OFID is paying $15 million, but its money will go towards meeting the cost of works and consultancy services.

When we come to procurement and installation of equipment, materials and vehicles, training and workshops, and what have you, that will now come from the $25, 5 million grant and also from the contributions by Government and the beneficiaries. So, I want us to understand it that way. The training and workshops are going to be funded from the contribution from Government, the beneficiaries and also from the grant.

Hon. Sen. D.T. Khumalo, I always find your passion for nutrition matters very refreshing. I feel like that passion is very commendable and I thank you very much. This is all to do with meeting the SDG goals which are to do with reducing hunger, fighting poverty, raising nutrition, food security and so on. This is part and parcel and is targeting the small scale irrigation schemes only. I thank you very much for that support. This loan facility is covering four provinces. This does not mean that there is nothing going on in other provinces.

As you aware and if you recall from the national budget for this year, we are targeting and we committed ourselves to developing in each of the 62 or so administrative districts 200 ha of irrigation annually for the next 10 years. I am happy that when I confer with the Ministry of Lands and Agriculture, they tell me that programme which is targeting, not the large scale or A2 farms or the large irrigation schemes like Tokwe-Mukorsi and so on, the communal and old settlement. I am happy to tell the House that that programme is being executed to my satisfaction. In other words, we should be able to meet the targets of 200 ha per each administrative district.

Hon. Sen. Sibanda, thank you very much for your support in particular for recommending us for timeous tabling. You seem worried and I think your background could be as an auditor or something. You are always worried about the oversight, what I need to assure this august House is that, in any loan facility, the severe oversight is provided by the development partners themselves.  So, when they give us this loan, they do not give us in one chunk, they give you a bit and say, you do it and they come and check whether we have done it or not.  We can then be entitled to a second draw down until the amount is final.  So, there is no room for corruption, if I may say so.  If any corruption creeps in, it means that we are not able to draw down any balance of the loan, something that we would obviously want to avoid.

          The part payment or contribution by the beneficiaries is essentially to give a sense of ownership of the project to the beneficiaries.  What this country lacks is that, everybody thinks that anything done by Government is Government’s property and can be treated carelessly without any regard.  Now, by seeking the contribution from beneficiaries, we are basically saying, alright, the greater part of the money to do this is coming from us and the State, but we want you to own this project, protect and preserve it because ultimately, it is entirely for your benefit and not for the benefit of anybody outside yourselves. 

          The youth we mentioned, of course, these are during the construction and they are always recruited locally, there is no way you can justify the cost of transporting a youth from Mutare to come and do work on this project in Matebeleland North.  They have to be recruited locally, this is what is cost effective in order to meet and be able to produce, finalise or complete within the budget. 

          Hon. Sen. Makwarimba, thank you very much for supporting the loan agreement. You also asked if the Ministry of Lands has the capacity to do this; yes, it does not have the capacity to construct roads, but it approaches the DDF, where DDF is paid by this loan.  This is what will be happening on this issue.  Madam President, I thank you very much and I commend and ask that this august House approves this loan facility.

Motion put and agreed to.

MOTION

RATIFICATION OF THE LOAN AGREEMENT FOR UPGRADING OF THE ROBERT GABRIEL MUGABE INTERNATIONAL AIRPORT

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I move the motion standing in my name;

          THAT WHEREAS, Subsection (3) of Section 327 of the Constitution of Zimbabwe provides that an agreement which is not an International Treaty but which has been concluded or executed by the President or under the President’s authority with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe does not bind Zimbabwe until it has been approved by Parliament;

          AND WHEREAS, the Loan Agreement between the Government of Zimbabwe and Export-Import Bank of China relating to the Development and upgrading of the Robert Mugabe International Airport being implemented by the Civil Aviation Authority of Zimbabwe was concluded on 4th April, 2018 in Beijing, China; and

          NOW, THEREFORE, in terms of Section 327 (3) of the Constitution, this House resolves that the aforesaid Agreement be and is hereby approved.

          Madam President, after the successful completion of the Victoria Falls International Airport, the Civil Aviation Authority of Zimbabwe (CAAZ) went on to develop their next project which is the Robert Gabriel Mugabe International Airport.  The Project entails the upgrading and rehabilitation of land side and air side that includes the terminal building and runway.

          The project is earmarked to cost US$153 million.  A loan has been secured from the Export-Import Bank of China (China Exim Bank) amounting to RMB1.045 billion (approximately, US$153 million).

          Madam President, the Government of Zimbabwe and China Exim Bank signed a Concessional Loan Agreement on the 4th of April this year, as already stated, amounting to RMB1.045 billion (approximately US$153 million).  This is for the development and upgrading of the Robert Gabriel Mugabe International Airport, which is 100% of the toral resources required for the project. 

          The facility has the following terms;

·       Interest rate                                      2% per annum

·       Grace period                                    7 years

·       Tenure (including grace period)    20 years

·       Management fees                            0.25%

·       Commitment fees                            0.25%

     Pursuant to the signature of the Loan Agreement, an On-lending Agreement will be signed between Government of Zimbabwe and the Civil Aviation Authority of Zimbabwe, (CAAZ) and that loan agreement will mirror the terms and conditions which I have just stated.

     Madam President, the proceeds collected from Air Infrastructure Development Fund and passenger services charges will be ring-fenced into an escrow account that will be jointly monitored by the Government and China Exim Bank.  The interest payment will be the first charge, with the balance left for CAAZ to carry out its activities.  The interest repayment will be based on the loan amount drawn down.

     Madam President, the project is expected to yield the following benefits;

·       Increase passenger and aircraft processing areas through the expansion of the international terminal building;

·       Improve passenger processing through the introduction of state of the art passenger processing and facilitation equipment and systems;

·       Runway safety assurance through completion of the runway rehabilitation and airfield ground lighting project;

·       Expected increase in traffic at the airport as evidenced by traffic growth at Victoria Falls International Airport after completion of the development project.

          We expect this airport Madam President to be developed into a regional hub.  We also expect that this project will help contribute towards macro-economic growth due to expected increase in passenger aircraft and cargo aircraft passing through the airport.  Lastly, there will be employment creation during the construction and operations through the expansion of the airport infrastructure as already witnessed in Victoria Falls.  It is with these remarks that I commend the agreement for the approval of this august House.  I thank you.

+HON. SEN. MATHUTHU:  Thank you Madam President. I would like to thank the Minister for a job well done, the job of improving our airport.  I would have been very happy that the standard of this airport that is going to be extended would be far much better.  You should see the Victoria Falls Airport.  It is so beautiful.  I also like the way it was built.  So, I would want to commend the Minister for a job well done.  Thank you.

HON. SEN. B. SIBANDA:  Thank you.  I have two clarifications that I need from the Minister.  Firstly, he said collections from the use of the airport funds will be ring fenced.  Is it part of the collections or all of them?  If you ring fence all of them, how do we service the loan and pay for other expenses?  Secondly, is this the beginning of the flow of mega deals that we were told about a few years ago?  Can you clarify that Hon. Minister?

HON. SEN. MAKONE:  Thank you Madam President.  I just have two issues that I would like the Minister to clarify for us.  Our experience in the past is that when we have signed deals with China, they tend to bring in their own people and people that can be sourced locally.  I am not just talking about labourers, I am talking even of technical people.  Can we be assured that all the jobs that shall be done at this expansion will be looked at to see if there is no local expertise available?  Also, can they try and use materials sourced from Zimbabwe because in my previous experience, they even try to bring cement from China.  We would like to see the downstream benefits for other industries like the cement, bricks, stones, et cetera.  We would like those sourced locally.  We very much welcome their money here but all the things that can be sourced from Zimbabwe could they be sourced here. 

On the second issue, I do not know if I made a mistake in hearing when you said the total amount of the loan is $153 million.  Having travelled in the region Madam President, the airports are of such high quality that I do not think that $153 million will make us get anywhere near the levels of the airports in the region.  I am looking at Ethiopia, Kenya, Tanzani, et cetera.  I am not sure that $153 million will do that much unless it is just doing a portion and then leaving room for further expansion.  This is the capital city of Zimbabwe and if we are going to do anything that is even 25% of what happened at O.R Tambo, I do not believe that $153 million is what we need. I think we need a lot more than that but if you can assure us that this is just the first phase, then I think I will be satisfied.  Thank you Madam President. 

*HON. SEN. CHIEF MUSARURWA:  Thank you Madam President. I am supporting this ratification which you have introduced into this House. I have some additions which I have to put.  Whilst working on the improvements of the airport, may we please be in the process of sourcing for aeroplanes which will utilise this new project.  It will be a pity, if not a shame that we create such a marvelous airport only to be utilised by foreign airplanes and not one of our country planes.  So, my wish is let us introduce lots of planes for Zimbabwe which are modern and suitable for this new venture we are embarking on. 

*HON. SEN. MUZENDA:  Madam President, I am very grateful for the introduction of this ratification in this House which is painting a glossy picture of what will happen in our airport.  My wish is that when this project is on the implementation stage, we need to have people who look at small things such as plumbing, which includes sinks and taps since this will be done at our biggest airport in the country.  I am a widely travelled person and I realise that in some airports, some of these plumbing items such as sinks are in bad condition and yet outside the airport will be a modern facility.  We need to look at such small things such as toilets, showers and any other plumbing.  Some of these contractors will use sub-standard material on the implementation stage which may be different from the one quoted.  Therefore, I am calling for people in Zimbabwe to utilize the best things so that we come to the standard of O. R. Tambo Airport in South Africa whereby when you are travelling and passing through that airport, you really feel elated because it is something which is of high quality and durable.

HON. SEN. MARAVA:  Thank you Madam President.  I would like to commend the Minister for the project he has brought, especially on the cost of the loan.  The 2% interest is very much welcome considering the time and the grace period as well, seven years is quite comfortable.  It is a very good cushion for a young country like ours.  The 20 years which he said we do have 13 years outside grace period, it is again not bad at all.  We would like to thank the Minister for that.  The only area which I would like to point out is that if the Minister could see to it that the loan is used for capital expenditure and not for current. I think it is very important because although he says oversight is from the providers but we still have to worry since we are debtors.  So, that is all I wanted to say Madam President.

          *HON. SEN. MANYERUKE: Thank you Madam President.  I stand up to support this motion.  We are the people who will be travelling through that airport and we will feel very proud to be passing through and boasting that we were part of the team that led to the refurbishment of this venture, this wonderful airport.  I thank you.

          THE HON. PRESIDENT OF THE SENATE: Hon. Senator can you repeat what you were debating because the microphone was not switched they might be a problem in recording.

          *HON. SEN. MANYERUKE: Thank you Madam President for giving me this opportunity to support this motion raised by the Minister; what I know is that when such projects are implemented there is going to be job creation for the people of Zimbabwe and our youths and we will also be proud of showing people that I was part of the team that led to the construction of such a marvelous project.

          +HON. SEN. KHUMALO: I do not know whether I am right or wrong US$153m for seven years, what will they be doing all these years with such a small amount of money.  When are we going to get to the stage of Oliver Tambo Airport or Kenya?  In 1975, Oliver Tambo was a small area but they kept extending it.  Yes, I understand but US$153m is just for the initial stages, it is too little an amount to take seven years.  So, we should do this very quickly and we should not take a long time because we will end up paying high interests.

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Madam President, I thank Hon. Senators who have contributed all in support of the approval of the loan facility.  Let me specifically respond to the individual Senators who have made contributions. Hon. Sen. Mathuthu, thank you very much for the support of this project. I think you come from Matabeleland North, you have good first hand experience of what the expansion of that Victoria Falls International Airport has done to rejuvenate the tourist industry in Victoria Falls.  It is now taking wide bodied aircraft we have witnessed increased landings there from some international airlines, Ethiopia, Emirates and in fact as I speak, I am informed that it is now very difficult to get hotel accommodation in Victoria Falls.  We are very grateful for that, the opportunities that in fact it has created is that there is now opportunity to expand our hotel accommodation and to expand a lot of the facilities which were not meant for large inflow of traffic.

          So, we expect the same result with Harare International Airport and what I think I need to emphasise also is that the traffic that has come about following the new dispensation is also such that it has created hotel problems within Harare. It is also very difficult to find accommodation here.  What is key is to do those things that are necessary to sustain the interest so that we do not frustrate those who visit us when they have to sleep in substandard accommodation.  We are very optimistic that the Robert Mugabe International Airport will bring the expected benefits to Harare and to the country.

          Hon. Sen. Sibanda, if I heard you correctly, we are ring-fencing proceeds collected from the Air Infrastructure Development Fund and also from passenger service charges.  This is being ring-fenced to make sure that we have money to service this loan.  Any surplus beyond a given amount will accrue to the Civil Aviation Authority for their own use.  What is very important to emphasize is that it is very difficult to get a loan which does not have a cash flow, which does not generate cash.  If it does not generate cash, it means we have to meet the repayments from the budget, something that currently we cannot do because the budget is overburdened. 

          So, we are basically ensuring that whether it is Hwange 7 and 8, whether it is this airport, Victoria Falls or Kariba South Extension, the sale of electricity for Kariba is being put into a nostro account to meet loan obligations.  This is what will sustain and will be able to ensure that in future we can be granted the money, future loans.  Hon. Sen. Sibanda you asked whether this is the beginning of major mega deals.  Let me say this that internationally the way things are, China is the only country which has capital.  It does not matter where you are coming from, whether you are coming from the West, Africa or the United States; you go to China if you need real money. 

          As a result, as you may know, the United States is indebted to China. China has been buying their Treasury Bills and Treasury Bills are an instrument of borrowing by the United States Government and it runs into trillions.  So, I just want to make the point here that if you are looking for real money, especially for infrastructure, there is no better place to look for it expect from China, if you do not find it in China, you cannot find it anywhere else.  We have had many major deals, Kariba South, I am sure you are fully aware, it is already completed, was commissioned I think two months ago or something by our President.  The President will shortly commission the commencement of Hwange 7 and 8 which is a US$1.2b project to add 600 megawatts to the national grid.  We are now getting approved here this Robert Mugabe International Airport and they are others also in the pipeline.  So, I do not know how to answer your question, the simple straightforward answer basically is that there is no other place, if you are looking for serious money and you are serious, there is no other way, you must go to China.  If you fall out with China, it means you are gone – [HON. SENATORS:  Hear, hear.] –

          Hon. Sen. Makone, I do not know where your experiences come from: my experiences are different.  Let me say what are the key features of Chinese loan facilities are, they will insist that if there is any equipment, that equipment must be sourced from China.  So, there is no choice there, they do not give you untied free money to go and buy your equipment where you want.  It has to be sourced from China.  Like all these big projects, the contractor insists is Chinese. But when we then negotiate with the contractor, there is no question that any bricks can come from China or any concrete stones will come from China or any cement.  I have not had that experience with them; especially the one that I am very familiar with which is the Kariba South Extension.  The sand was secured in the Kariba Basin, the concrete stones also here, they have to identify where they can obtain suitable concrete and not that one which easily breaks – real concrete and they go and set up their machinery or they contract someone who can sell to them.  I know for instance with respect to the river sand which they used in Kariba South, they contracted a local company which was then ferrying it by boat from some island there in the Lake Kariba and back to Kariba for construction.  So, my experience is different from yours and I do not think that the fears that you express are at all warranted.

Thank you very much for welcoming Chinese capital but the point that I made earlier, there is no choice.  The capital which is ruling the world especially on our continent is Chinese capital.  I just want to emphasise that if you look at the major projects on the continent, they are doing in a matter of a decade what the colonial powers have not done in 100 years and that is a fact in terms of infrastructure; you have to go to China. 

You make the point that you do not think that $153 million is adequate.  It is adequate for the development that we want to be undertaken.  That is the rehabilitation, expansion of the runway, the expansion of the terminal buildings for rehabilitation and do not compare us for now at this stage.  Do not compare us with Ethiopia. Addis Ababa is a major international airport hub.  Do not compare us with Kenya, either for now because we aspiring to be a Kenya and to be an Addis Ababa International Airport.  That will come within our stride but we need to take the first steps and the first steps is first to have an airport that can accommodate any size of aircraft which is now what the case is in Victoria Falls, which is now what we are seeking to do at Robert Mugabe International Airport.  Thereafter, as traffic increases, then we can carry out further expansion, including perhaps putting more runways so that you can have several aircraft landing or taking off simultaneously.  On Uganda and Tanzania, I do not think so.  It is Ethiopia and Kenya that you compared us, but not now.

What we are seeking to do Madam President, is that we are expanding the airport and we also want Zimbabwe to be a regional hub and to that end, it is in this light that we purchased four aircrafts.  We have paid for two and these are large size 777 aircrafts.  We are committed to buying two more and there is a balance of $29 million outstanding in order that we have four large scale aeroplanes.  Alongside that, when you have large aeroplanes, they will be going too far away destinations – maybe London, Dubai, Singapore or Beijing. 

Now, you need smaller aircraft which will bring the traffic to your hub, which is what the Ethiopians do, which is what the Kenyan Airways do and which is what Emirates does.  So, in the scheme of things, we have committed ourselves as part of the turnaround of our air industry to buy six smaller aeroplanes and of the six, we have already bought one and we have yet to buy five.  That will then complete the first stage of building Robert Mugabe International Airport into a regional hub.  Thereafter, all our fortunes will depend on increased arrivals of passengers.

Hon. Sen. Chief Musarurwa, I thank you for the question that you asked but, I have answered you since your question was similar to the one asked by Hon. Sen. Makone regarding the credit. 

Hon. Sen. Muzenda, you raise a matter which I think all of us have noticed but have never thought of it like it is important, yet it is very important – the quality of bathrooms/toilets and their maintenance.  You have left out the word ‘maintenance’.  Sometimes you can install high quality but if it is not maintained, they all fall down in standards.  Those of you who have used the bathrooms at Oliver Tambo International Airport, you know that in each bathroom, there is a person who is ensuring that it remains clean.  That also is a model that I think we need to adopt.  So, the first thing is obviously to install equipment which is high quality and durable, that I take but over and above that, we must always ensure continuing maintenance of our facilities so that they keep and maintain their value and cleanliness.  With those remarks Madam President, I move that the loan facility from China-Eximbank be approved.  I thank you.

Motion put and agreed to.

MOTION

BUSINESS OF THE HOUSE

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Madam President, I rise to move with the leave of the House that Orders of the Day, Numbers 3 and 4 be stood over until Order of the Day, Number 5 has been disposed of.

Motion put and agreed to.

SECOND READING

 

ZIMBABWE IRON AND STEEL COMPANY [DEBT ASSUMPTION] BILL [H. B. 2, 2018]

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Madam President, I rise to give the second reading of the Zimbabwe Iron and Steel Company Debt Assumption Bill. Madam President, we are talking about a Bill which is H. B 2 of 2018. This Bill and to refresh Hon. Members’ memories, the Zimbabwe Iron and Steel Company Limited (ZISCO) was an integrated iron and steel manufacturing company with annual production capacity of one million tonnes of liquid steel. It started as a small company in 1948 at its present site in Redcliff.

ZISCO then produced long products that are bars, rods, channels, ankles and square bars. For the production of steel, iron ore was mined within 20 km of the steel plant. Limestone was mined within the steel works and coal was railed from Hwange Colliery Company Limited some 650 km from Redcliff. Madam President, at its peak ZISCO was the lifeline of this economy and also the lifeline of the City of Redcliff. It produced about 800 000 tonnes of steel, 70% of its production was exported in the form of billets while 30% was sold in the form of finished products on the domestic and regional markets. Of the domestic sales, 75% was for the construction industry, 15% for manufacturing and fabrication, 6% for mining and 4% for agriculture.

Madam President, ZISCO had two subsidiary companies that is Buchwa Iron Mining Coming (BIMCO)  which was the mining arm of ZISCO and Lancaster Steel which produced wire and fencing products. The company halted operations in 2008 following successive and debilitating failures in power supply and other chronic problems which afflicted the plant. Hon. Senators will need to know that this was the beginning of the hyper-inflationary period. Following these systematic failures, no operations have resumed at the plant and this therefore, has compromised the company’s capacity to contribute to the economy and by extension, its capacity to meet its debt obligations.

Prior to the period before the eventual stoppage of operations, the company had embarked on a rehabilitation programme which involved the procurement, installation and commissioning of new plants from Germany and China respectively. Madam President, by and large, the total debt for ZISCO stood at $494,8 million as at 31st December, 2017. This amount is broken down as follows; foreign loans borrowed by Government $211,9 million, foreign creditors by the company $6,1 million, local loans borrowed by the company $57,7 million and local creditors $219,1 giving a total of $494,8 million.

As I have already pointed out Madam President, ZISCO has been unable to pay its debts, a situation which demands attention and rectification given the pivotal role it plays in the manufacturing sector and the overall economy. I am pleased to announce that the Board of ZISCO and the Ministry of Industry and Commerce have identified a Chinese investor to resuscitate ZISCO operations. The contract agreement is now in place and work is anticipated to begin shortly. The restructuring of ZISCO debts, especially cleaning up the balance sheet is a condition precedent to operationalise this agreement.

Also, I am happy to say Madam President, another investor has already taken over the coke ovens and it took occupation last Monday. That investor has already assumed the debt which ZISCO owed to KFW in the region of $170 million – [HON. MEMBERS: Hear, hear.] – which means that already, the debt will be reduced eventually once the agreement between us and KFW is concluded by $170 million as this investor is assuming it. I am happy that position has already been secured. In this connection, Cabinet approved the assumption of ZISCO debts in July last year and to that end, the Draft Bill before this august House has been developed as a step towards the resuscitation of ZISCO’s operations.

Madam President, it has been agreed with the Ministries of Industry and Commerce and Enterprise Development and ZISCO that in the long run, this debt assumption will not translate into an increase in Government debt because firstly, the current project structure is based on ZISCO being compartmentalised into three main components. The first part involves, as I have pointed out, the new Chinese investor who will invest in a new plant, equipment and operate the rest of the steel plant. The new plant in addition to long products will produce flat products and special steel. It is believed this investment will exceed $1 billion and has tremendous potential benefits to the rest of the economy.

The second part Madam President, as I have already alluded to, encompasses the coke oven batteries, ancillary plant and equipment which will be used to produce coking coal for exports by a local investor. The proceeds from coke exports will be used to pay off the Germany KFW debt amounting to $174 million. That is the investor I said has already taken occupation and procedures for the debt assumption are almost complete.

Thirdly but not least, a separate company will be incorporated with ownership of mining claims and rights and any investor will equip and operate the mines for a fee payable to the new company. This fee will be used to pay the Chinese and local debts amounting to $284 million.

Madam President, given the context I have provided, I shall now proceed to highlight some salient provisions of the Bill. Clause 3 of the Bill establishes the extent of the liabilities to be assumed by the Government of Zimbabwe.  The Legacy Debt accrued by ZISCO prior to the 1st of February, 2017, will be taken over by the Government and thereafter ZISCO will be responsible for its own operational costs and liabilities as any other business entity.

          However, before any debt is assumed by the Government, the debt must be subjected to a process of meticulous verification and reconciliation as provided for in terms of Clause 6.  This process is carried out by the Public Debt Management Office, which is in my Ministry, which office is authorised to do so in terms of Clause 5 of the Bill as well as in terms of the Public Debt Management Act, (Chapter 22:21). 

          The proof that is to be tendered in support of a creditors’ claim includes authenticated copies of loan agreements and contracts and court judgments supported by other relevant creditor documents, which will be scrutinised by the Debt Management Office.  Finally, Madam President, in terms of Clause 9, once the exercise is concluded by all relevant parties, the President shall repeal the Act.

          In light of the above, Madam President, I submit that the Zimbabwe Iron and Steel Company Debt Assumption Bill, 2018, be read a second time.  I thank you.

          HON. MARAVA: Madam President, whilst we thank the Minister highly for bringing this Bill to us, for refreshing our brains, we still want to ask for a small extension, it is not everybody here who is a fast learner.  The Hon. Members would love to look at the document and then we can go further and make our decisions.  Thank you Madam President.

          *HON. MACHINGAIFA: I thank the Minister for introducing the ZISCO Debt Assumption Bill.  This is an interesting issue.  I am so touched by the issue to do with ZISCO.  I am one of the former long serving employee of ZISCO to the extent that if you ask me to name all the plants at ZISCO, I will let you know.  ZISCO used to be the industrial hub of Zimbabwe – [HON. SENATORS: Hear, hear.] – if it is resuscitated, this will excite the nation.  I want to thank you and say to my fellow senators, let us help each other to ensure that this industry is resuscitated in order to strengthen the Zimbabwean economy.  I thank you.

          HON. SEN. B. SIBANDA: Thank you very much Madam President.  The issue of debt assumption is something I do not like or enjoy.  I think that the Government must be taken to task about it.  ZISCO has been lying idle for about 15 or so years, right in our faces.  Over that period, we have done very little to ensure that something is done to ZISCO.  There have been many proposals to resuscitate ZISCO, including during the inclusive Government and very little has been done.

It was during the inclusive Government when I think the former President in South Africa indicated that ‘one of the problems in resuscitating ore investment in Zimbabwe is the 10% that ministers ask for.’  As a Government, we silently ignored that advice.  I am not saying that it is specific to ZISCO, but it has been a culture and today we are being asked that we condone the debt assumption by Government.  In economic terms, there will be no guarantee that the business will be a success; there could be a probability of failure.  Therefore, with the best of wishes, the Minister cannot say that the populace of Zimbabwe will definitely be exempt from the obligation.

If I can refer to other cases of debt assumptions, correct me where I am wrong.  I suspect that we assumed debts at CSC, Railways, in Hwange, GMB and of course the controversial RBZ Debt, where people fed themselves into national resources and asked the poor Zimbabwean to pay for it.  If you add the total sum, I did that at one time and I suspect I got total as high as US$2.4 to US$3 billion.  I am saying, that is being irresponsible, it is possibly only in Zimbabwe where a Government can be assuming debt after debt and remains as a Government.  In other areas, the population would have known what to do with that Government. 

Madam President, I am not in any way saying that this Debt Assumption Bill should be rejected in order to forestall progress at ZISCO, it is necessary that we do.  However, we should do so in the full understanding that Government has been irresponsible and I am not going to be apologetic about that.  The Government has to own up, dust itself up and prove that it is up to the task.

My mind is a bit rusty because I took the Bill and filed it suspecting that what will be debated about today will be a new Bill.  However, I remember that there is a figure between $40 million and $60 million owed to Government.  My recommendation is that Government should literally write off that debt.  They have allowed it to be created; they cannot pass it to the nation.  I suggest that the Hon. Minister, who happens to be in charge of finance and has the capacity, writes off that debt and not pass it on to us.  It is not our debt; it is a debt that you allowed to be created.  I am not saying you in person but I am talking about you as a Government.

Madam President, the other issue is the plight of employees.  I am aware that employees at ZISCO have suffered unprecedentedly.  Why should a huge number of employees suffer for such a long time without knowing their fate, when we have a Government that is a shareholder in that business?  Once again, I am appalled by that situation.  Those are the people who vote us into office and we have allowed them to suffer for probably over 15 years. 

Of course, I am assuming that the issue of salaries will be addressed by the Government, but why on earth would we allow people to suffer for 15 years.  If we have closed ZISCO, I would have felt better; at least the people would know their status.  As we speak, those people are subject to the laws of this country that require them to pay for their education and sustenance and yet we have watched them suffer over a long period of time. The relief we have occasionally given to them is not enough to ameliorate their suffering. 

My last comment is, please Government, if you are in Government in future, make sure that companies are not allowed to deteriorate to this level so that you will come before Parliament and Parliament in my opinion Madam President I will use unashamedly agrees to such debt assumptions by Government. In fact, that is passing the obligation and the omissions of Government to the populace.  I think it is unfair.  Madam President I thank you.

          HON. SEN. NYAMBUYA:  Thank you Madam President.  I just want to make a few comments on this very important Bill which the Hon. Minister has brought before this august House.  The Bill is actually at the heart of the future of this country.  The integrated steel and iron mills which we have had at ZISCO Steel in Kwekwe are actually at the centre of growing and building a nation.  You cannot talk of industrialization or growth without putting steel at the forefront of your plans and actions.  Madam President, steel is a very important aspect of the economy because literally everything we do in the economy involves steel; construction of buildings and infrastructure needs steel.  What I am trying to say is that ZISCO Steel has played a central role in the growth of this economy.  Right now, we are importing all our steel requirements from outside and that means foreign currency which we are actually selling outside Zimbabwe.  It also means we are exporting jobs.  It is therefore imperative and urgent that we revive our steel industry.  It is urgent, we should have done this yesterday – [HON. SENATORS:  Hear, hear.]

We might have made mistakes in the past.  Clearly, the fact that we have arrived at a situation where we have got a debt of $494 million, is undesirable.  It is not good at all.  Nobody likes it and we do not want to pass debt to our children.  Nobody likes this but the fact of the matter is that we now have a situation whereby we want to bring investors so that ZISCO Steel can be revived and our economy can start growing again and engage in industrialisation.  No investor will come to ZISCO Steel if the books are not clean.  No investor will come and run a company which has got huge debt overhang on its head. It is therefore important that we clean up the mess which has been created. I am very happy and I commend the Minister for the fact that the debt management office is going to vet rigorously to ensure that the debts are bona fide and that the debts were incurred in the process of bona fide operations so that there is no fraud. 

I commend the Minister for looking forward and ensuring that we put aside the debt, deal with it and start on a clean page.  We cannot be open for business if we have no steel industry; steel industry takes precedence in any economy.  For any economy in the world, steel industry is number one.  You cannot build most of the machinery and equipment without steel, so let us think Madam President with our heads and not hearts.  Let us look forward and find ways and means of dealing with the debt issue which is what the Minister is trying to do so that our steel industry takes off.  I thank you. 

*HON. SEN. BUKA:  Thank you Madam President.  I rise to support the Bill which was brought by the Minister. I am one of the people who grew up at ZISCO Steel.  My father was an employee of ZISCO Steel and every time I pass through the place I feel very pained because it is dilapidated, no smoke, no noise and yet we know that it was a place whereby many people were living through working at ZISCO Steel; the people of Redcliff and Torwood.  We also have people who lived in Mbizo but worked for ZISCO Steel and they are now in a pathetic state.  Minister, we are supporting your attempts to resuscitate ZISCO Steel.

I know we may have delayed but I think we have started something which is going to create employment for our children.  In the areas of Redcliff and Torwood, we have people who are not employed and this is going to create jobs.  As such, we have to support this Bill so that these people would have jobs.  It is a job creating venture and we are saying, these investors who are coming are going to help in the resuscitation of ZISCO, creation of jobs and creating of investment opportunities.  The Minister explained to this august House that she is not just going to assume this debt without any further investigations or research.  We are going to get details of all the debts and how they were assumed and they will be taken up. 

Therefore, we expect the Minister to trigger the state of investigation in the issues of the ZISCO Steel debt.  We know this will not fail because capable people were appointed to take this task.  There was thorough vetting.  We said we have a problem and we need people who are capable to start resuscitating this project.  We have specialists who are going to help in the resuscitation of ZISCO Steel. With those few words, I say as Zimbabweans we need to resuscitate the economy of Zimbabwe. Thank you for your hard work.

*HON. SEN. MASHAVAKURE:  Thank you Madam President. When Senators were debating I was saying, we had problems at the banks and then there was ZAMCO which was taken by Government to assume the debts.  When we talk of debt assumption, are we not going to create an instrument which is going to assume that debt so that the debts are not taken up by Government but they are taken up by these organisations.  As of now, people are saying Government has been assuming a lot of debts but we need to create a vehicle which is going to assume these debts and not Government taking up this debt.  It will be up to the people who have assumed it to know how to deal with it.  I am also informed that the credits which we owe other countries, may be assumed by these organisations.  When we are looking at ZISCO Steel and NRZ, can we not get an outsider who can assume these debts?  We have been told that the ZISCO debt is $494 million.  My question is, is it privatisation or is it commercialisation?  So, what is this debt assumption going to be going to be when we talk of commercialisation and privatisation; where does the Government stand?  What is its share holding capacity in this programme?  I will now turn to another issue in which the President of South Africa said in Zimbabwe, the Minister begged for money saying ndioneiwo homwe dzangu dzakabooka, it was the same thing in Ghana and Nigeria.  Now everyone believes that with this new dispensation, this occurrence will never happen again.

HON. SEN. KHUMALO:  I am very much happy about the resuscitation of the ZISCO Steel.  It is of interest to me and I thank the Minister because it has a multiplier effect. Once we really are assured that it is going to be resuscitated, we know that the National Railway will begin to function as well so that it brings coal from Hwange.  We know the Railways also collapsed because ZISCO Steel was not there.  We are hoping that those who were employed by National Railways should be taken into consideration like those who were employed at ZISCO Steel because the two parastatals collapsed nearly at the same time.  The workers were kept waiting, they were not dismissed; they were just being told that it is going to be resuscitated and so on.  I know of many people who left the railways under those circumstances. They have no pension, they are really suffering and they are very poor.

The other multiplier effect I know is going to be the Hwange Colliery. It is going to be revived and more people are going to receive salaries and those demonstrations we have been seeing will stop.  Within people at Hwange, we have people who reached retirement age, they have not been paid their salaries and they have not been paid their pensions because they left at the time when the company was in limbo.  Can those people be found and be given their pensions and salaries. 

Why I am saying there is a multiplier effect, once those people are re-employed the economy is going to rise and more people will be employed.  They will then be able to buy clothes and this will boost the agriculture sector.  It will produce more cotton so that materials can be made and this will create employment.  Can we really make sure that this is going to happen that the ZISCO Steel is going to be resuscitated?  It means more people will be able to send their sick children and relatives to hospitals.  More children will go to school and the parents will be able to pay fees.  It is not only ZISCO Steel that will be resuscitated, it will be the people of this country and the economy and we will also be more nourished.  I thank you – [HON. SENATORS: Hear, hear]

HON. SEN. MUSAKA: I thank you Madam President.  I wish to thank the Minister and his team.  Indeed it is the Ministry of Economic Development.  Right through, all what has been presented has to do with development.  Minister, congratulations. At least we are on the road to development.  When we actually tackle the issue of infrastructure at the very lowest level in the village, like water, for broilers need clean water. That is really developmental. When you begin to tackle the airport, you link them to the international community who is an effective consumer and that is serious development.  I thank you together with your team; you are on the road to development.  Taking into consideration the issue of ZISCO producing steel for Zimbabwe - our population of 14 million is nothing. You need to be anchored to an effective consumer like you rightly said Minister that China is the effective consumer at the moment in this economy and that they are coming to develop ZISCO.  We are anchored to an effective consumer just like the Germans were anchoring themselves to ZISCO. It is now your anchored effective consumer. Now we are now anchored to a developer who really wants to consume our steel, 70% will go to China and that is developmental issue.  Minister, I do not have much, now that your Ministry is actually looking at development, I am very grateful and I thank you.

HON. SEN. SHOKO: Thank you Madam President for allowing me to talk on this issue of the ZISCO Debt.  The issue of ZISCO is an issue that has been going on for some years now. You would find that the failure of ZISCO Steel led to the closure of a lot of companies and the NRZ has been given as an example as well as Hwange Colliery.  The construction industry was also affected because as you know, steel is used in the construction industry.  The problem that I have is before I came in to this august Senate, there was some deal that was talked about, the ESSAR deal and it looks like we are now being told about the Chinese.  The ESSAR deal seems to have gone down the drain.  My problem is -  I am going to ask the Minister, are we not going to get the same problem that we had with the ESSAR deal where we clap our hands, ululate about a deal that is coming on the table and then all of a sudden we are back to square one?  I believe that when we do these things, we are not only doing it for ourselves, we are doing it for the population because we are here for the population. 

We want our population to be affected by the deals that we do.  We want the people that worked for ZISCO to be affected by the deals that we are doing.  Now, if we have deals and then all of a sudden they go off, we will have a problem in supporting deals that are brought into this august House.  I will appeal to the Minister that, let us not see him coming back to this House next year to tell us that look, the Chinese deal is off and we have another new one and this is going to be a wonderful one because; that is what we are being told here that the Chinese one is going to work.

The ESSAR deal died a natural death.  The people who were there are going to take over the debt.  The workers who were there have been suffering for the past 15 years and to make it worse, I believe that their pension fund also collapsed.  And also to make it worse, their families suffered and their children did not go to school and some people have died as we talk - the people who were supposed to get and who are owed by ZISCO Steel. 

So, Hon. Minister, having heard you talk, we expect that when we come back next year, for those who are going to come back into this august House, we will be getting results and talking about ZISCO Steel employing people whom they employed.  ZISCO Steel as I remember, it was employing about 15 000 people at that particular time.  Presently, ZISCO Steel is not employing anybody and we are looking at ZISCO Steel coming up, helping the country in every aspect.  We are saying, if ZISCO Steel is going to be resuscitated, we are going to have a lot of companies being resuscitated.

Hon. Minister, we will certainly want results out of the debt that you are taking over, especially looking at workers who have been affected.  We understand that this year, there were some payments that were made but, those people have not got their salaries or they have not got the money that is owed by the Government.   We are looking at this deal with that in mind or we are looking at the Government taking over those salaries and paying these people so that at least when they get to the new employer, they are already paid their monies.  The problem that we have is, they go to the new employer but, the debt that you have taken over has not covered these salaries.  So, Hon. Minister, when you are looking at these things, please take them into consideration especially the workers who have been affected so that we can move forward and they move forward with motivation.  If you do not pay them, then there is no motivation for them to join the new employer.  I thank you Madam President.

*HON. SEN. CHIEF MUSARURWA: Thank you Madam President.  I am in support of this ZISCO (Debt Assumption) Bill.  We need to develop the country and have progress in the country.  I will take you at some stage where we debated this thing.  In the past, Minister, you were given a dead project and you were asked to carry that project which was a dead project and when it really failed, the blame was put on you, yet, we were already talking about projects which had been broken down and could not progress.

We know that we have had sanctions and, we are working hard so that we start reviving our economy and we remove all those things which destroyed our economy.  I am saying, as we are talking of the ZISCO Steel, may you please expedite this Bill so that it is implemented.  I am pleading with my fellow Senators that we are talking about the revival of ZISCO Steel and let us not destroy ZISCO Steel.  If we do that, when we talk to the future generation, and also talking about unemployment, we will be blaming ourselves.

I am therefore saying, when we revive ZISCO Steel, there is going to be a ripple effect of development such as Matabeleland North and Midlands  will also be revived.  Also, areas like Chivhu will also benefit because they will be supplying some materials.  In Chivhu, we have an area which has iron ore and we are hoping that when ZISCO Steel has been revived, we will benefit because they will be taking ZISCO Steel iron from there.  As you know, that place Chivhu used to be called the Republic of Enkeldoorn because it had lots of minerals and lots of resources which led to development and as such, was equated to a State. 

Therefore, we are saying if ZISCO Steel is resuscitated, there is going to be development because as of now, our Constituency is known for agriculture, which is tobacco and maize but we are saying, if ZISCO is resuscitated, there will be economic development because there is going to be mining.  We know that there have been some problems in the past but as the august House, let us support this Bill and start to resuscitate the ZISCO Steel and development of the economy.  I thank you.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  Thank you Madam President and I want to thank all Hon. Members who have contributed and all of them have contributed in support of the debt assumption of ZISCO Steel.

Let me now refer specifically to points raised by Hon. Senators.  Senator Marava has asked for deferment.  The issue is very simple and has been with us for a long time and he had asked that we defer debate.  But, I think Madam President, you have allowed debate and it is no longer an issue.  Hon. Sen. Machingaifa, thank you very much for supporting the Bill.  Hon. Sibanda, you raised a number of issues generally to do with corporate governance and you also said that there have been many proposals to resuscitate ZISCO Steel.  I agree.

The ESSAR proposal collapsed because I think it was poorly structured.  With a debt of $500 million and you tell an investor that the investor must assume $500 million before they make their money and they have not contributed to that debt at all;  I think that structure was not acceptable to any investor.  So, what we have sought to do is to clean the slate.  Whether today the Chinese investor comes, the Chinese investor may say, after we have cleaned it, may say no, I have changed my mind and it is allowed to change minds.  But, what I am very happy about is that at least the ground is clear and the slate is clear for any investor who may want to come.  We do not have to start burdening that investor with liabilities before they put their own money.  In other words, they set aside from their investment $500 million just to pay someone’s debt – how are they going to recover it.  So, what we are doing here is basically to clean the slate so that there is a good start for any investor who is serious.

You make reference of course to the previous debt assumptions that may have taken place; one such which is recent which I did when I came in was the RBZ, I am not aware of the others but I will not dispute. What I think is important the way I have looked at these issues is that you have to start somewhere.

Once you inherit a situation which is bad, you examine that situation and see what needs to be removed or what burden or stone in your path you need to remove in order to get forward. Now, in the case of ZISCO Steel, clearly the obstacle has been the debt issue and it has to be removed. How it was incurred is neither here nor there, but the reality which is facing us is that there is a debt which needs to be sorted out one way or another and this is what we are proposing to resolve it.

Also the issue of corporate governance Senator Sibanda, as you know this House passed the Public Entities Corporate Governance Bill, which has now been enacted and we are beginning to operationalise it. This will deal with a lot of the bad malpractices which were taking place in all our parastatals and it is a multi-thronged approach we are taking with respect to parastatals. We have already taken a decision as Cabinet that some of the parastatals must be collapsed or liquidated, others must be restructured or privatised and in fact this morning, I was in meetings where basically we are going to partially – these were discussions – privatise some of our parastatals and there is some interest from some of the investors. If we move along that path, we should be able to achieve efficiency and also increase the revenue base because the businesses will be able to operate on a commercial basis.

You mentioned that we should write off the debt owing to Government. It is just writing off our own debt. These companies are almost 100% owned by us. So, whether we do not touch it or we write it off, at the end of the day it is ourselves – [HON. SEN. B. SIBANDA: But I disagree.] – Well, if you look at the structure, there is a schedule to the Bill of who is owed what. To domestic suppliers, utilities and statutory obligations, we have a debt due to the Mining Commission, whatever that is and it is not Government. We have a debt due to Pay As You Earn, I suppose that can be written off. It is to ZIMRA and this is money which we should have used to pay ourselves salaries.

We have a debt to NSSA that is to do with contributions by the employer which were not made to the employer and so on. Now, anything owing to Government or a Government entity, yes we could consider. For instance, we could consider writing off the debt owed to ZIMRA or the Minerals Marketing Corporation of Zimbabwe, which is a parastatal and so on but in turn, it will mean also that we are digging holes in their balance sheets because it will go without being paid but it is something that we can consider.

You know the difference Hon. Sen. Sibanda with parastatals as opposed to private sector businesses, if this was a private sector business the route would have been to liquidate and creditors would end up getting two cents in a dollar and there would be some preference given to workers. Even then, it may not be full payment to what they are owed but because this was a parastatal, although the company’s business collapsed in 2008, the workers continued to say we are still employed by ZISCO Steel for ten years thereafter. That clearly is not good business and those are issues that we hope will not crop up in the future.

Thank you very much Hon. Sen. Nyambuya, you correctly pointed out that the steel industry is at the heart of our economic growth or recovery. It is at the heart of our sustained development as a country and an economy. I am very happy that you make reference basically to the urgency to support this initiative. It is at the heart of any serious intention to industrialise our economy and I want to again agree with you, that even though we put a schedule it does not mean that we have already verified. They are still going to be individually verified to make sure that they are valid, otherwise we will not validate them.

Hon. Sen. Buka, thank you very much for a very fervent support of the Bill and I can understand why given that you were born in that area. You watch at it and it is a sorry sight. We want to do everything in our power to restore the Redcliff area and the industry as the flagship of our economy. We will do everything in our power. It will create employment both downstream and upstream. It will also link up and revive the railway which is why we also have measures that we are introducing to resuscitate the railways. It will also bring up coal production to a level it can support. I think the coal industry will be greatly resuscitated through this effort and of course, without the railways you cannot carry the coal to Redcliff.

Thank you very much Hon. Sen. Mashavakure for the support you are giving. You ask whether the debts can be sold. The person who can sell the debt is the creditor. The creditor can and normally they do. They can sell the debt to another creditor and sometimes when it is done it is at a discount. In other words, someone can come to a creditor and say you are owed by Government $100 million. I am giving you $2 million and I will take over the debt and this is always with the expectation by the creditor who is buying the debt that he will recover more than the $2 million he has surrendered. So, it can be done but not by the Government but by the creditor.

Privatisation - what percentage? To be honest, I do not have a ready answer but what I know is that at the end of the day once everything is concluded, it will be a very small percentage due to Government. Why? Because I am told that the equipment is now obsolete. This new investor is going to have to bring new equipment, maybe except for one or two items and it is those items which will be valued and give a percentage shareholding by Government in the entity.

Senator Khumalo, thank you very much and I agree with you. The multiplier effect of the downstream or upstream is unprecedented when you are dealing with a steel plant. As I have already stated and you mentioned it yourself, Hwange Colliery will be revived and will have a market for its thermal coal. National railways, we have already begun a process to rehabilitate it to be what it used to be and the other entities like water, iron ore mining which will also be revived in order to feed into the steel plant.

I just want again to bring us back to how a business should be run. If every business collapses, they should not expect Government to come to the rescue and pay the creditors, workers and pensions which were not remitted. The business must pay for itself. What we are doing is just unique because of the centrality of the iron steel industry to the revival of our economy. Outside this, I would not be here.  I want to say that, as was mentioned by Hon. Sen. Sibanda that he does not like what I am doing, I also do not like what I am doing – [Laughter.] – Yes, but I do not have a choice.  The reality confronting me is that I have to do it, even though I do not enjoy doing it.  It is basically because it is the only way to resuscitate our economy and our steel industry. 

          Hon. Sen. Khumalo asked a question, ‘can we be sure that it is going to happen?’  All I am sure about is that I am leveling the ground, I am providing a clean slate.  There is an investor who has shown interest, we consider the investor serious but anything can happen for the investor to change mind, I cannot be controlling it, I have no control over it.  However, because we have made the slate clean, we can find other investors who will not want to be bothered about debts and so on, they will find the slate already clean, that is what we are doing here. However, when all is said and done and implemented according to our wishes and intentions, I agree with you, we will all be nourished.

          Hon. Sen. Musaka, thank you very much for supporting the Bill.  I agree with you, the beauty about a Chinese investor is that not only will we be able to export to China which is the largest steel market, we can also because of the many Chinese-funded projects taking place on the continent, this could easily be a supplier of steel to those projects.

          Hon. Sen. Shoko, I agree with you that there was a domino-effect arising from the collapse of ZISCO.  Many companies went under including Lancashire Steel. Buchwa Mine stopped mining iron ore.  In fact, right now I am not aware of iron ore mining that is taking place in the country.  However, through this resuscitation, we should begin to see the resuscitation of our iron ore mines. 

I think I have already alluded to why I think the Essar deal collapsed.  I think the structure was flawed, that you ask an investor to come and before it starts, it sets aside its money to pay off other people’s debts, I think that was not a wise or reasonable expectation from the circumstances.

Hon. Sen. Chief Musarurwa, thank you very much for your support.  You know as we are talking, we are not only speaking to the Chinese investors but we are also encouraging new investors to come into the iron and steel industry.  When His Excellency went on a State visit to China, he met one such investor who also wants to set up a new plant.  As we discussed a new plant, we are talking about the Maine’s Mountain and I believe it is a mountain of iron ore – [HON. SENATORS: Hear, hear.] – but to conclude these issues, it takes time; it is a process.  Madam President, I want to thank the august House for their support and I move that the Bill be now read a second time.

Motion put and agreed to.

Bill read a second time.

Committee Stage: With leave, forthwith.

COMMITTEE STAGE

ZIMBABWE IRON AND STEEL AMENDMENT (DEBT ASSUMPTION) BILL

House in Committee.

Clauses 1 to 4 put and agreed to.

On Clause 5:

HON. SEN. B. SIBANDA:  Can I check with the Minister, I see some inherent contradictions, the company has not been operational for over 10 years.  He has emphasised the importance of proof of claim, that is factual and that is a requirement.  However, our current legislation requires people to keep documents for five years, I know I am correct.  What happens in a situation where those documents got lost within the 10 year period and for a genuine reason, the company cannot find them?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): To be honest, that is in the least of my worry.  If a creditor cannot prove its claim, I will be very happy.  The creditor has the option to look for lawyers so that they can establish the validity of their claim.  If they fail to do so, it means the debt is reduced and I will be a very happy man.  I cannot assist a creditor to prove its claim against us, no.  Thank you very much.

Clause 5 put and agreed to.

Clauses 6 to 8 put and agreed to.

On Schedule, Sections 2, 3, 4 and 6:

HON. SEN. B. SIBANDA: I suppose that I was trying the Minister out on Clause 5, but here I am serious – [Laughter.] – Hon. Minister, I seriously recommend that you write off the Government debt of $24 231 684.00.  Whilst you are arguing that it is still the same debt, it is not.  My argument is that you are passing a debt that you should be writing off.  You are passing it the tax-payer, so it is not the same hand that is handling the debt.  In the same vein, I would say you can actually write off the ZIMRA debt because it is your money, but the NSSA debt you cannot touch because it is the employees’ money.  I thank you.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I think I am in agreement and I think I conceded to that point in my reply that it is a valid point that we will look into.

Schedule put and agreed to.

House resumed.

Bill reported without amendments.

          Third Reading:  With leave; forthwith.

THIRD READING

ZIMBABWE IRON AND STEEL COMPANY (DEBT ASSUMPTION) BILL [H. B. 2, 2018]

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  I move that the Bill be read the third time.

          Motion put and agreed to.

          Bill read the third time

MOTION

BUSINESS OF THE HOUSE

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Thank you Madam President. I move that we revert to Order of the Day, Number 4 on the Order Paper. 

          Motion put and agreed to. 

SECOND READING

ELECTORAL AMENDMENT BILL [H. B. 6A, 2016]

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Thank you Madam President. I am honoured to present to you the Electoral Amendment Bill, 2017 that was presented to the Lower House. This Bill seeks to amend certain sections of the Electoral Act and complete the alignment of certain provisions of the Act with the new Constitution and to ensure the smooth running of the new registration of voters proclaimed by the President under Statutory Instrument 109 (2017) on 8th September, 2017 which new registration was mandated to begin on the 14th September, 2017 and to end on 15th January, 2018. 

          Madam President, this Bill represents a compromise which was reached between Government and stakeholders in the electoral process, namely opposition parties, the Zimbabwe Institute, the Women’s Lobby whose spokesperson was Hon. Priscilla Misihairabwi-Mushonga.  This led to the inclusion Madam President of gender mainstreaming in electoral processes as one of the additional functions of the Zimbabwe Electoral Commission (ZEC). 

In addition, this Bill requires that voter education be conducted in a gender sensitive manner with due regard for the electoral code of conduct for political parties and candidates prescribed in the fourth schedule.  The Bill also enlarges the observers accreditation committee by the addition of a representative by the Minister responsible for Women’s Affairs, Gender and Community Development.  Hence, the Bill requires ZEC to enhance gender equality to the extent in which it is able to do so within its constitutional mandate. 

As a result, this Bill started with only five clauses but now it has 37 clauses and a schedule on the electoral code of conduct.  Madam President, the amendments contained in this Bill are in compliance with Section 157 (1) (b) of the Constitution which specifies that the Legislature must provide for the registration of voters and requirements for registration on particular voters roll.

I am also confident to mention that the ZEC has been consulted and their recommendations have been incorporated in this Bill.  This requirement is adhered to in terms of Section 157 (4) of the Constitution.  Madam President, the Bill introduces provisions that cater for the envisaged new voter registration system that we often refer to as the Bio-Metric Voter Registration System.  For this purpose, ZEC is in the course of implementing or has been implementing a new Bio-Metric Voter Registration exercise requiring all persons eligible for registration to present themselves to a voter registration officer, fill in a voter registration claim form and have their bio-metric features taken.

However, under Section 36 (a) of the Electoral Act, a person who has previously registered to vote is excused from having to fill in a claim form being only required to produce proof of identity to the voter registration officer.  It was anticipated that unless this provision was removed, some persons would have refused to submit to Bio-Metric Voter Registration, thereby compromising the integrity of the new voter registration drive. 

The amendment contained in this Bill will repeal this problematic provision.  Like I said, some of the provisions that we are looking at, came into force when the President proclaimed the Statutory Instrument I alluded to earlier on.  So, some of the provisions are already in effect.  Madam President, the Bill enables ZEC to establish two or more independent polling stations to serve the same polling station area and to split the voters roll for that area between such polling stations if ZEC finds that the estimated number of voters to be served by any polling station exceeds the number determined by it to be manageable.  What this does is, we now have polling station based voting, so if ZEC determines that the number that have registered at a particular polling station is large, they can split that polling station and have satellite polling stations and this amendment seeks to give effect to that exercise.

This Bill also facilitates and speeds up voter registration by making claim forms available even prior to the registration day and allowing claimants to complete the forms themselves unless they specifically ask the assistance of a Registration Officer to complete it for them.  The previous position, the Registration Officer had to complete it for you.  So to speed up the process because everyone else was being registered, we had to amend it to allow for individuals to complete the forms themselves and present them.  Therefore, the amendments made by this Bill provides accordingly as well as making it clear that a potential voter may register at any voter registration centre anywhere in the country.  The provisions of the Bill allowed for you to register in Harare and your registration will be posted to your specific area.

Madam President, this Bill also empowers ZEC to de-duplicate the voters roll.  Nevertheless, persons aggrieved by an action of ZEC to de-duplicate the voters’ roll or to remove redundant names there from are given by this clause a right of appeal to a designated magistrate.  This Bill also facilitates the according of election observer status on the Zimbabwe Human Rights Commission.  This Bill will require ZEC to ensure that the number of ballot papers printed for any election does not exceed more than 10% the number of registered voters eligible to vote in the election.

          The Bill also removes the requirement for an electoral officer to witness how a visually impaired person votes.  Furthermore, the Bill will remove the often implementable requirement that ZEC must remove the name of a deceased or withdrawn candidate from a ballot paper after it has been printed.  In other words if the ballot paper has been printed and somebody becomes deceased, this Bill takes away that requirement that ZEC must remove that name from the ballot paper. 

          Madam President, the Bill will also expand the scope of punishable intimidation by including threatening statements made by alleged intimidators that they can discover how a voter casts his or her ballot.  The Bill will also empower ZEC to activate the ex-provision on the setting up of the national Multiparty Liaison Commission and the media monitoring of elections before rather than after the proclamation of an election.  What the Bill will do is to ensure that ZEC can activate the Multiparty  Liaison Committee six months before the proclamation or it can activate the media monitoring clause six months before the election date; so that the monitoring of the media and the Multiparty Liaison can start its work before the President has proclaimed the date, as opposed to the current scenario were these can only be activated after the President has proclaimed the date of the election.

          Madam President, the Bill will make it clear that the Electoral Court is a division of the High Court.  This clause will mandate that the assessors of the Electoral Court and the panel of names from which they are drawn must be equally representative of men and women.  The Electoral Court will also be able to take oral evidence in connection with an election petition before it. More importantly, this Bill ensures that every election petition shall be determined within six months from the date of presentation and every appeal there from would be determined within three months from the date of lodging of the appeal.

          Madam President, we are very grateful to the work done by the Zimbabwe Institute, especially represented by Mr. Maphosa. Their proposals on the electoral code of conduct were largely adopted.  The code of conduct was guided by two considerations.  First and foremost, in this code and conduct is a negotiated arrangement between political parties and not other parties who are not party to the negotiations and electoral processes.  Accordingly, interparty dialogue that resulted in the court cannot include parties who are not privy to these negotiations and are not direct participants to the electoral process such as traditional leaders, intelligence services and disciplined forces.

          To do so, Madam President, would be unfair and unjust to them.  How can they be bound on the same basis as political parties to the code if the code is only relevant to the political parties?  The second consideration was that we cannot make the code of conduct justifiable because by its very nature, it is an aspirational document that is not to be interpreted in a precise manner as imposing specific obligations on specific individuals.  To do so, will render the work of the electoral court impossible because every allegation by one party or candidate will be matched by another counter allegation, by another political party or candidate, leaving no time for the electoral court to do its core business of adjudicating election petitions. 

          There are specific criminal sanctions in the Electoral Act for criminal behaviour.  The police and NPA are there to investigate, prosecute and convict people who are found to be guilt of such behaviour.  Therefore, the code of conduct is not intended to be a list of prosecutable offences but a kind of mission statement and vision for political parties.

          Madam President, this Bill will also affect certain minor and consequential amendments to the Electoral Act, including the removal of the last remaining references to the abolished posts of the Registrar General of Voters and constituency registrars.  It will also remove the role of the Zimbabwe Human Rights Commission from membership of the Provisional Liaison Committees that had been set up under the Act to monitor and take action on politically motivated violence and intimidation.  This role will be assumed by the police liaison officer alone.

          Madam President, in conclusion, the amendments to the Electoral Amendment Bill are fundamental in ensuring that we achieve free, fair and credible elections.  In addition, the Bill ensures that the Zimbabwe Electoral Commission undertakes its mandate and executes its duties as envisaged in Section155 of the Constitution of Zimbabwe.  To sum up, this Bill also brings the relevant provisions of the Act in line with the letter and spirit of the electoral principles enunciated in the Constitution of Zimbabwe. I thank you and I move that the Electoral Amendment Bill [H.B. 6A, 2016], be now read a second time.

          HON. SEN. MASHAVAKURE: Thank you Madam President.  I think it is good that I heard a lot of mainstreaming to do with gender in the Minister’s speech.  I also thought that consideration should have been given to the establishment of a disability desk within ZEC to deal with a lot of issues that are faced by persons with disabilities. Continually we have been having these things now for almost the entire life of the independent country of Zimbabwe and somehow I do not know why we miss the point.  It is important that we have a disability desk in the spirit of political and social inclusivity.  That is my main problem, point and request.  I thank you Madam President.

          *HON. SEN. SHOKO: Thank you Madam President. I would like to get some clarification on some issues regarding the printing of ballot papers.  You said the laws we are talking about were agreed upon by stakeholders, you mentioned the stakeholders who included the political parties.  So, my question is legally speaking, when I examined this document and listened to your delivery, nothing was talked about regarding the printing of the papers.  Will the political parties be aware of the printers of these ballot papers so that they can play an oversight role?  I think this way it will be fair for everybody concerned in the printing of ballots, that there is going to be transparency and is it very clear to everybody who is concerned.  Does this new amendment include this or is something which is going to be included because when I last read this law, this Clause that I am talking about was not included.  So, please explain to us so that when I go out and give feedback to the people that I represent, I will give them a clearer clarification.  Thank you Madam President.

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI):  Thank you Madam President and I want to thank the Hon. Members for their contributions.  I thank Hon. Sen. Mashavakure for his concern that ZEC must have a disability desk to deal with those issues and I agree.  I think ZEC has a mandate also on voter education to ensure that they constantly interact with political parties and other players and I think it is a request that is well taken and which is within the mandate of ZEC to do that.  I think that can be relayed to them to ensure that they do that, it is something that we commend him for raising.

          Hon. Sen. Shoko, you asked on the printing of ballot papers whether this will be out in the open and who will be responsible for that.  According to the Constitution of Zimbabwe, when it talks about the role or the function of ZEC, it also says ZEC is responsible for the manufacture of ballot papers – the design and everything pertaining to the ballot papers.  When ZEC is doing that, they will be following the law which talks about that when we want to buy things, especially, this regarded as in the Procurement Act; this will talk about the sourcing for the printers of these ballot papers and other items which may be needed.

          Again at the same time, when we talk of the Electoral Act, the political parties and other stakeholders should also be allowed to question the procurement process and the printing so that there is transparency.  This means that ZEC should give this information to the stakeholders and other partners.  Let me further explain and say, our elections are very transparent in such a way that on the particular day, when these ballot papers have been printed, and taken to the polling station, there will be lots of officials – the polling officers, the agents, politicians and the observers.  They will be told the number of ballot papers which have been left in that area and also the serial sequences of those ballots.  All the people who will be at that station will be there to sign that indeed what has been said is what has been delivered.

          After the elections, the ballot papers will be counted and it will be seen that the number of ballot papers which were left out and the number of votes garnered by each competitor in that particular station tally.  When the counting has been done and all the figures will be collated, the figures of the winners and the losers will also be put on display for everybody to see.  There is authentification, verification and colaration.  We are saying, Hon. Shoko if you are part of the people in that polling station, you will be very much content by what has been done.  We also advise that, whenever you feel that there is something which is going on at that polling station, the ZEC officials should be in a position to explain to you what is happening at that particular station.  You will also know the number of ballot papers which have been brought to that particular station, the number of ballot papers used and the balance.  I thank you.

          I now move that the Electoral Amendment Bill [H. B. 6A, 2017) be now read a second time.

          Motion put and agreed to.

          Bill read a second time.

          Committee Stage: With leave, forthwith.

COMMITTEE STAGE

ELECTORAL AMENDMENT BILL [H. B. 6A, 2017)

          House in Committee.

          Clauses 1 to 37 put and agreed to.

          Schedule put and agreed to.

          House resumed.

          Bill reported without amendments.

          Third reading: With leave, forthwith.

THIRD READING

ELECTORAL AMENDMENT BILL [H. B. 6A, 2016]

          THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI): Madam President, I now move that the Bill be read the third time.

          Motion put and agreed to.

          Bill read the third time.

On the motion of THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. ZIYAMBI), the House adjourned at Twenty-Two Minutes past Five o’clock p.m.     

 

Senate Hansard SENATE HANSARD 16 MAY 2018 Vol 27 No 41