The Zambian government has signed a 12 year lease agreement of Kabwe’s Zambia China Mulungushi Textiles Joint Venture Limited with a Tanzanian firm Mohammed Enterprises Tanzania Limited (METL) which among other conditions will exempt the company from paying some taxes for the first six years.
During the signing ceremony which did not include the Chinese shareholders at the factory in Kabwe on Wednesday, METL board chairman Gulam Dewji said he was pleased to have taken over the operations of ZCMT.
The occasion was attended by PF cadres whom ailing dictator Michael Sata appointed as directors and some officials from METL group. Defence PS Rose Salukatula signed on behalf of the Mulungushi textiles board in her capacity as board vice chairperson.
At the time of closure in 2007 the company employed over 2,000 permanent employees but according to the details of the lease agreement leaked, METL will employ not more than 1,000 employees in their first three years of running. This includes both expatriates and casuals.
METL will also initially run only the ginnery and spinning divisions of the company leaving out the weaving and processing divisions, meaning no finished materials will be produced at Mulungushi textiles.
Details on how METL whose top management is mainly dominated by Tanzanians of Asian origins operates in Tanzania will be unveiled soon but this deal is shielded in a secret veil and aimed at hoodwinking the people of Kabwe to retain the PF in 2016 and the forthcoming Highridge ward by election.
A source from the defence ministry has disclosed that the Chinese shareholders had objected to the deal. The Chinese company Qindao Textile group holds 66 percent shares while the Zambian government through the defence ministry holds 34 percent.