3 Bills get Senate nod
PARLIAMENT has passed the Zimbabwe Iron and Steel Company (Debt Assumption) Bill, Insolvency Bill, and Shop Licence Bill which now await Presidential assent before they become law.
The three Bills sailed without amendments through the Senate on Thursday.
The Insolvency Bill provides for the administration of insolvent and assigned estates and the consolidation of insolvency legislation in Zimbabwe while the Shop Licence Bill seeks to remove impediments in getting a business licence.
The two pieces of legislation are part of Government’s thrust to consolidate the ease of doing business in the country.
Finance and Economic Development Minister Patrick Chinamasa steered the Zisco Debt Assumption Bill while Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi took charge of the Insolvency Bill and Shop Licence Bill.
In his Second Reading speech, Minister Chinamasa said the Bill sought to have Government take over about $500 million owed by Zisco to both domestic and external debtors.
He said creditors would have to prove indebtedness in the form of contracts and court judgments, among other documents before Government takes over the debts.
Minister Chinamasa said the Debt Management Office resident in his office would validate and reconcile all debts.
Government’s decision to take over Zisco debts followed attempts by two Indian firms to revive the steelmaking firm’s operations but have, for various reasons, failed.
In 2006, another Indian company Global Steel Holdings Limited - was given management control of the firm after promising to inject $400 million in a rehabilitate, operate and transfer arrangement but the deal fell through under unclear circumstances.
Another Indian firm - Essar Africa Holdings - also signed a deal with Government in 2011 to revive the steel giant in a transaction valued at $750 million.
The deal also collapsed due to a number of reasons, including differences in the then inclusive Government.
“The Essar deal collapsed because it was poorly structured. How can you require an investor to assume a debt which he did not have knowledge about? This is why we are saying let an investor start on a clean slate,” said Minister Chinamasa.
He was responding to concerns by senators on what assurances were in place that the deal would not fail again.
Senators complained that it was unfair to burden taxpayers with a debt arising from poor corporate governance.
On the Insolvency Bill, senators implored Government to prioritise payment of workers ahead of all other creditors since it was them who had been toiling to sustain the firm.
“There is a tendency to first pay creditors owed millions of dollars ignoring workers. Some creditors would still thrive even if they lose $2million but a worker would be greatly affected if he loses few dollars because he is vulnerable,” said Manicaland Senator Shadreck Chipanga (Zanu-PF).
Other senators did not understand why the Bill exempted banks and insurance firms.
Minister Ziyambi had indicated that banks and insurance firms were exempted since they were governed by separate legislation.
On the Shop Licence Bill, Minister Ziyambi said the objective of the regulations was to remove all impediments which were making it difficult to obtain a business licence.