Government fails to pay Chinese company’s US$5.2 million debt

According to reports, the government is having trouble making the US$5.2 million payment due to a Chinese company that was hired to build a new mill that will increase Lafarge Cement Zimbabwe’s production by double (LCZ).

The $15 million project has already been finished, but the contractor, CBMI of China, would only give it over after the outstanding US$5.2 million is paid, according to legislators who paid a visit to the business on Monday at its Harare headquarters.

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This is an issue we discussed last week; CBMI has been patient with us regarding payment of this project,” CEO Geoffrey Ndugwa told members of the Parliamentary portfolio committee on industry and commerce.

“Government has not been able to disburse the funds to CBMI of China. The project was implemented on the assurance by the government of Zimbabwe to settle the debt.

“We do not have control as Lafarge at the moment and we cannot obtain a certificate of completion before the debt owed is serviced.”

MPs heard that Finance minister Professor Mthuli Ncube visited LCZ two weeks ago over the issue and promised to settle the debt but nothing has materialised to date.

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Prof Ncube recently revealed to Parliament that Zimbabwe owes China close to US$3 billion, most of it now in arrears.

Lafarge sealed the deal with CMBI in 2020 revealing, at the time, that the expansion project would increase production capacity from 450,000 tonnes of cement per year to one million tonnes.

“Lafarge Cement Zimbabwe has signed the supply contract for a multi-million dollar vertical cement mill with CBMI of China in a virtual ceremony,” LCZ said in a statement at the time.

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“This state of the art cement grinding station will double the company’s production capacity, improve cement quality and position the company to expand its cement varieties,”.

“This investment will guarantee the Zimbabwean construction market of high quality and consistently available tried and trusted Lafarge cement. This signing ceremony marks the official initiation of the project which was awarded national project status in 2019 when the company announced the investment.”

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