Yeukai Karengezeka Municipal Correspondent
Harare City Council’s partnership with a Chinese company, Consortio International Zimbabwe (CIZ), to build the Shawasha Business Complex in Mbare is reportedly hanging in the balance after the company negated the initial agreement of injecting US$10 million into the project.
According to recent minutes of the business committee, Consortio International last month indicated it would no longer inject US$10 million citing that stakeholder’s agreement they had signed last year superseded the joint venture agreement which required that amount.
“Consortio International Zimbabwe had advised that the initial deposit of US10 million deposit as stated by the Joint Venture Agreement clause (6.2) was no longer enforceable as the Shareholders Agreement superseded the joint venture agreement,” read the minutes.
“The Shareholders’ Agreement states that: upon conclusion and coming into force and effect of its agreement, the joint venture agreement shall cease to exist and the provisions thereof shall be incorporated into this agreement which shall regulate the relationship between the parties in the joint venture.”
The company did not agree to reviewing the shareholding structure inciting their past experience with parastatals and Government institutions where projects have derailed due to bureaucracies emanating from equal representation.
Before the new developments, the two parties had agreed that phase 1 of the project which includes construction of the flea market, car park and shopping mall will be completed by December 31 this year.
The CIZ proposal to vary the joint venture agreement to allow them not to deposit the US$10 million as stipulated in the agreement, but convert the same into material purchase, was rejected.
The local authority argued that the interpretation of the shareholder’s agreement clause 6.2 was not correct as it does not nullify the partner’s obligations as stipulated in the joint venture agreement.
After deliberations, it was agreed that there was need to further legal consultations from both parties on the interpretation of this clause so as to be guided accordingly.
The consortium advised that they had submitted a summary of the schedule of works and a detailed Gantt Chart would only be available after the project implementation team had met to give technical input.