Zimbabwe: Why Lancashire Steel deal could be headed for stillbirth
KWEKWE – A cloud of uncertainty hangs over an investment deal signed between the Zimbabwean government and a Botswana-based Indian company, Whinstone Enterprises, amid fears the treaty could be facing a stillbirth.
Whinstone Enterprises signed a five-year deal to revive the moribund state-owned Lancashire Steel and declared it was committed to reviving the parastatal once government signed trade, but a year later, the Harare administration has ordered the investor to renegotiate with Lancashire management.
The deal will, once consummated, give Whinstone Enterprise 50% ownership of the Kwekwe-based firm after five years.
Whinstone Enterprises Director, Deepak Verma, confirmed from his Botswana base the company had been told to renegotiate the deal with Lancashire.
“We received communication from government that we are supposed to renegotiate the deal with Lancashire Steel,” said Verma.
“We are really surprised with the turn of events as we didn’t expect this outcome, considering that we thought we had addressed all the sticking issues.”
Verma expressed shock with the sudden turn of events.
“At the present moment I am in the dark on the consummation of the deal. We are actually surprised that the deal did not pass through the Joint Ventures Act. What is quite disturbing is that we are only hearing of this now. To further complicate the issues we were not given reasons for the failure of the deal to pass through the joint ventures act,” he said.
Contacted for comment, Industry Minister Mangaliso Ndlovu said he was out of the country on government business. He however, claimed Whinstone Enterprises was still interested in investing in Lancashire Steel.