HomeBusiness DigestRow over blending threatens project

Comment: Reassignments betray duplicity

Controversial businessman Rautenbach, who is a close associate of President Robert Mugabe, and his consortium are holding on to crucial production cost figures which would help the government in regulating pricing of the E10 blended petroleum product.

A senior government official said the government believes that Green Fuels wants to rip off local consumers by charging slightly below the cost of unleaded petrol, hence their refusal to release production costs.

Ethanol blended petrol (E10) is lighter and burns faster than unleaded petrol. It therefore follows that for the same quantities of fuel, a motorist using unleaded fuel travels further than one using E10. For that reason E10 should be significantly cheaper than unleaded fuel.

“Green Fuels has refused to hand over production costs to the government despite the state being a partner through the Arda investment,” said the official. “The secrecy by the consortium has caused the government to be cautious in approving compulsory blending.”

The Green Fuels deal has been shrouded in secrecy since 2009 when it was first brokered and some MPs have called for its cancellation, saying it does not meet the country’s 51% indigenisation policy.

Energy minister Elton Mangoma rejected the compulsory blending of ethanol saying it was not good for consumers. He said the government could not formulate a policy to protect a single company.

Sources close to Green Fuels said the consortium is trying to find a political solution to the new challenge and is even considering making an appeal to President Robert Mugabe to reverse Mangoma’s decision.

“The consortium believes Mangoma’s decision was political and therefore a political solution has to be found,” said the source. “They are contemplating approaching Mugabe to have Mangoma’s decision reversed so that the project may be saved.”

Arda board chairman Basil Nyabadza confirmed that an inter-ministerial committee was handling the matter to try and find a workable solution to save the project.

“The matter is now beyond our level. It is now being handled by an inter-ministerial team comprising 11 ministers, among them Agriculture minister Joseph Made and Mangoma,” said Nyabadza.

The Green Fuels investment had begun to change the economic prospects of the semi-arid and poor Middle Sabi valley. The local authority has since lodged an application to have Checheche Growth Point upgraded to a town council status.

More than 5000 jobs created by the project, that employs mostly locals, are now at risk. At least 700 workers have been sent on forced leave since February.

Parliament is still probing into the finer details of the Green Fuels deal as parliamentarians argue that the project is in contravention of the country’s 51%  local ownership indigenisation policy.

Rautenbach’s consortium controls 70% of the project while the remainder is held by Arda.

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