The US$17.7 million loaned to government by business tycoon Kuda Tagwirei in 2018 blocked foreigners from taking over controlling stake in the Feruka pipeline.
This emerged at a time when Zanu Pf member Christopher Mutsvangwa and reserve bank of Zimbabwe advisor Eddie cross have upped their game in despising the business ventures being undertaken by the Sakunda boss.
Highly placed sources in government said MOGS, whose agenda is being pushed by Mutsvangwa and cross, was thrown out by government after it emerged that they were offering expensive fuel while also wanting to take shareholding in the feruka pipeline.
“MOGS was asked by government to present their proposal on the table which included the purchase of the 50 percent from Lonmin for US$40 million and become a partner for government.
“In the proposal, MOGS wanted to build a second pipeline and become shareholders in the strategic underground storage in Mabvuku, they proposed to loan government US$22.7 million on condition that they get 25 year lease of the pipeline and at that time MOGS were not aware that government had also approached Tagwirei for the money. Of the loan, Tagwirei raised US$17.7 million at 6 percent interest rate. This put the final nail into the matter as MOGS were completely shut out,” said sources.
Sources in the ministry of Energy and Power Development said it is at this point that Mutsvangwa and Cross were outwitted by Tagwirei as he stopped foreigners to participate in the pipeline hence unending fights.
“Mutsvangwa and Cross were promised US$2.5 million if they could have structured the MOGS deal. The two also approached Tagwirei with two different groups of Chinese to buy chrome as they thought Tagwirei owned Landela and Sotic, a deal which fall by the way side. Mutsvangwa then used his monthly income of US$200 000 from a local chrome mining company to paint black Tagwirei’s businesses,” said the source.
Research reveal that Tagwirei had a near monopoly in the fuel sector during the Governmnet of National Unity when he had 80 percent of the market share, he partnered Trafigura in 2013 on condition that monopoly was going to be reduced to between 30 and 40 percent.
This was cemented by sources in the ministry of Energy and Power Development who indicated that Sakunda signed a take or pay agreement to pump a minimum of 40 million litres and failure to use the space Sakunda would pay for it under the then Minister of Energy and Power development Elton Mangoma.
Mutsvangwa, Eddie Cross feud with Tagwirei exposed
“The feud between Christopher Mutsvangwa, Eddie Cross with business tycoon Kuda Tagwirei is centred on the failure by the two to bring the businessman to support MOGS Oil & Gas Services bid to take-over the country’s fuel pipeline,” they said.
Sources privy to the ongoing feud say soon after restore legacy in 2017, cross and Mutsvangwa approached Vice President Constantino Chiwenga with a view to rubbish what Tagwirei has been doing for the country with his international partners, Trafigura.
“Just after restore legacy Mutsvangwa and Eddie Cross met VP Chiwenga made scathing attack on Trafigura and Sakunda purporting that the two companies were bringing fuel in the country without paying duty, payments were made in Singapore and they were reaping off local consumers as they charge exorbitant prices,” said sources.
It is believed that during this meeting, the two also told the Vice president that they can bring cheap fuel into the country while also resuscitating the MOGS deal claiming they can bring the fuel into the country.
“After their submissions, the Vice President advised them to meet His Excellency President Emmerson Mnangagwa on these allegations and a team was set up to investigate this claim which led to a meeting where Tagwirei was asked to present all fuel transactions from 2010 to 2017 as a way of checking consistency in pricing,” said the source.
The investigations by the team set up by the President Mnangagwa revealed sharp differences on what was obtaining on the ground and what Mutsvangwa and Cross had told the presidium.
“The team was sent to Oman to look for cheap fuel and the team was headed by Simon Khaya Moyo who was the minister of energy then though the minister only met people in Dubai. The team wanted to get first class guarantee from government and the money of fuel to be paid in Singapore. These conditions were not given to anyone in the fuel sector at that time,” sources said.
Another source, a former ministry of energy and power development employee said there were a number of concessions that MOGS wanted which were ridiculous hence their deal failed to see the light of the day.
The source said, “It was discovered that fuel being brought in Trafigura was paying duty through oil companies, prices were lower that what others were offering at that time, and Trafigura was the third largest financier of government projects to the tune of US$1 billion after African Development Bank and Afreximbank. This discovery saw the claims by the two being thrown out as their narrative lacked merit,” said another source.
“The deal was meant to pay legacy debts which Tagwirei cleared. When you look at the through-put agreement, it is a third of the pipeline utilisation which later increased to 60 million litres and currently the utilisation of the pipeline is at 70 percent meaning anyone who wants to use the pipeline can do so at any given time and the notion that there is monopoly is a farce as the pipeline is now wholly-owned by government,” said the sources.
The Zimbabwe Energy Regulatory Authority gazettes prices of fuel and they have been doing that since time immemorial unlike other commodities which are not controlled.
Political sources also indicate that Lewis Matutu and Godfrey Tsenengamu’s anger emanates from the view that they were benefitting small scale mining activities at jumbo mine.
“The two heard that Sotic which bought Bindura Nickle corporation and Fredda Rebecca mines is on the verge of acquiring Jumbo and Shamva Mine. Tsenengamu who is fronting the anger of Zanu PF politburo member Kenneth Musanhi who wanted the mines but he had no money to complete the commercial transaction,” sources said.