Zim may lose $500-million
Billy Rautenbach is tangled in a spat over land use and is said to be ready to move a multimillion ethanol project to Zambia.
Controversial businessperson Billy Rautenbach is eyeing a potentially lucrative move into Zambia after nasty rows with Zimbabwean state officials over his attempts to set up the country’s second ethanol plant in the Mwenezi district of Masvingo province.
Rautenbach has found the going tough in his attempt to establish the second plant, despite having state support when he established the first one in Chisumbanje, Manicaland. The building of this plant resulted in the introduction of mandatory blending of 85% unleaded fuel with 15% ethanol. The blended fuel was introduced against the wishes of motorists, car manufacturers and dealers.
Rautenbach, through his investment vehicle Ratings and Macdom Investments, entered into an agreement with the Agricultural Rural Development Authority (Arda)to grow sugar cane for ethanol in Chisumbanje, which is then processed by his company Green Fuel. A total of 9 500 hectares is under cultivation, but Rautenbach is seeking to bring the total to 46 000 hectares.
Green Fuel’s website says it is planning to build at least four ethanol manufacturing plants “with an annual capacity of 1.5-billion litres to meet Zimbabwe’s domestic requirements and export the balance to the external regional markets while co-generating 120 megawatts of electricity”.
Rautenbach has also entered into a partnership with the Development Trust of Zimbabwe (DTZ), which claims to own the vast Nuanetsi Ranch in the Mwenezi district, in the formation of the Zimbabwe Bio-Energy ethanol project, which would allow Rautenbach to establish a strong footprint in the region.
However, a Green Fuel employee, who wished to remain anonymous, said: “There has been massive resistance [to the Mwenezi project] by the Masvingo leadership, especially the provincial affairs minister, Kudakwashe Bhasikiti, so there is talk of us establishing another plant in Zambia. Negotiations are in progress.”
In May, the Zambian Daily Mail quoted Chanda Kasolo, the country’s permanent secretary for Luapula province, as intimating that an unnamed Zimbabwean investor – thought to be Rautenbach – was on the verge of sealing a $500-million deal for an ethanol production plant in Zambia.
“The sugar plantation at the 110 000 hectare Luena Farm Block has the potential to create 5 000 [jobs] once it starts operating,” said Kasolo.
“I am very interested in the jobs that this project will create, but I am looking beyond the sugar plantation. There is a Zimbabwean investor who would like to invest in the sugar plantation and venture into the production of ethanol, which is a biofuel.
“The Zimbabwean investor is waiting for the SI [statutory instrument to allow the blending of ethanol with petrol] and to install blending equipment at filling stations.”
Meetings to drum up support in Zambia
Villagers in Mwenezi told the Mail & Guardian that Rautenbach’s representatives have been holding meetings with community leaders and villagers to drum up support for their project, warning that delays would force them to accept an offer to set up in Zambia.
“There have been several meetings to galvanise the traditional leaders and their communities to pressure the provincial leadership into authorising the venture,” said one source, who added that “the latest meeting took place last Saturday at Nuanetsi Ranch”.
During the meeting Rautenbach’s spokesperson Lilian Muungani allegedly warned villagers the company could be forced to take the Zambian offer if officials drag their feet.
Bhasikiti and other Masvingo provincial leaders are said to be dead set against the project. They have insisted on settling the families who were displaced by the Tokwe Mukosi Dam floods on the Nuanetsi Ranch, which the DTZ and Rautenbach have earmarked for sugar cane production.
DTZ is a nonprofit development programme that was initiated by the late vice-president Dr Joshua Nkomo and President Robert Mugabe in 1989. Mugabe is its patron.
The relocation of the displaced villagers has angered the DTZ, which claims the state is taking over private land, although Bhasikiti insists Nuanetsi Ranch is state land.
DTZ resident director Charles Madonko said Bhasikiti not only “refused to communicate with DTZ over [the resettlment of flood victims in Mwenezi], but has [also] deviated from the Cabinet map confining the resettlement ... on the northern sections of the ranch and instead pushed people further into ... the areas specifically meant for the ethanol project.
“Most tragically the ministry of lands officials were harassed into abandoning their original maps guiding them on where to settle people, [and instead] to follow the directive of the provincial minister [Bhasikiti]to direct resettlement into areas well within the nerve centre of the ranch and the ethanol project,” said Madonko.
“To date, pegging has continued, putting the whole multimillion dollar investment venture at risk. If this continues, Nuanetsi is finished and no form of commercial enterprise can take off for irrigation farming in the model adopted at Chisumbanje.”
But on Tuesday, Bhasikiti hit back at both Madonko and Rautenbach, and said Nuanetsi Ranch belonged to the state. He described Rautenbach as a “perennial crook” who abandoned ethanol plans in Mwenezi to set up in Chisumbanje to avoid funding the construction of the Tokwe Mukosi Dam, only to return when it was almost complete.
“He [Rautenbach] came here [to Masvingo province] around 2006 to 2007 seeking to set up an ethanol plant and we gave him maximum support. He proceeded to clear land for the sugar cane plantation, only to abandon that upon hearing that there was Arda [Agricultural Rural Development Authority] land in Chisumbanje,” said Bhasikiti.
“He had cleared land near the Mwenezi River because he wanted to use Manyuchi Dam. He had even pledged to fund the construction of the Tokwe Mukosi Dam but he took off and went to Chisumbanje without paying a cent.
“Now that Tokwe Mukosi is almost complete, he comes back. Billy is a perennial crook who has not even finished with the government in Chisumbanje, where he is still to comply with the 51% indigenisation requirement.”
Bhasikiti said that there was nothing untoward about the decision to settle the displaced families on the land earmarked for Rautenbach’s sugar cane as it was state land.
Madonko, though, insisted that the DTZ bought the land in 1989 after securing a loan from Old Mutual. He said the government acted as a guarantor and assisted with Z$27-million, which the organisation paid back.
Madonko said Rautenbach came on board and acquired a 70% stake after highlighting his investment vision to the late Vice President Joseph Msika who then took him to Mugabe.
Mugabe, said Madonko, gave DTZ the go ahead to partner Rautenbach in 2008.
He said under agreement DTZ was to buy back 20% of the land from Rautenbach after sharing dividends, bringing the venture to 50-50. Bhasikiti however dismissed Madonko was a “sell-out who had betrayed the (late vice-president Joshua) Nkomo’s and government’s vision for empowering Africans as he had entered into a dubious agreement to give Rautenbach 70% of the Nuanetsi Ranch.”
Mugabe’s spokesperson George Charamba said that DTZ was never a private initiative but in fact government property bought with government money although he refused to delve into the Bhasikiti-Rautenbach conflict.
“It was in fact a government initiative with the late vice-president Nkomo and President Robert Mugabe as the patrons. I am saying this to clarify the misconception around the ownership but I cannot say much about the Bhasikiti-Rautenbach conflict as I do not have full facts on the matter,” he said. “The final say on whether the ethanol project will go ahead will come from government.”
Madonko however accuses Bhasikiti and some directors of Triangle Sugar Limited of frustrating the ethanol development programme.
“We are reliably informed that the Provincial Minister has teamed up with Triangle senior personnel to form a company that would grow cane on our land. Our lawyers are following up on this towards a legal conclusion of the matter,” said Madonko.
Bhasikiti denied the allegations. Muungani did not respond to questions on the Zambia project and on Bhasikiti’s standoff with Rautenbach.