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(HERALD) The sad tale of Chisumbanje ethanol plant

The sad tale of Chisumbanje ethanol plant
Friday, 30 March 2012 21:08
Emilia Zindi

The much-hyped Chisumbanje Ethonal Plant is now a white elephant. It is more than a month since machines at the multi-million-dollar project in Chiredzi ground to a halt and Green Fuel (Pvt) Ltd, the company running the venture, remains stuck with millions of litres of fuel.

The company no longer has storage space for the ethanol since little of the product is finding its way to the local market. Motorists who have b een anticipating to use the E10 fuel to power their vehicles are hesitant to adopt the product. They are, however, concerned with the safety of their vehicles.

Despite experts assuring vehicle owners that the fuel was safe, motorists are believing otherwise. They think E10 may damage vehicle engines and the fuel burns faster than unleaded petrol.

While concerns from motorists could have been the major reasons that fuelled the low uptake of the product, there are, however, some schools of thought that some issues were overlooked in order to make the project viable.

Prior to the introduction of the green fuel, the general belief was that its price would be lower and cost as little as US$0,90 per litre considering that it was a local product.

Most service stations are selling E10 at an average price of US$1,41 compared to US$1,44 for unleaded petrol.

Despite the country having sold blended fuel before, there was a need for public education on the reintroduced of the product and its benefits.

“It is of no use to have our own product costing almost the same as the imported one. Motorists think it is rather absurd to switch from what they were used to and try another product for no reason. The price should have been less than a dollar per litre,’’ said a Harare economist, Mr Machel Mawerera.

['No reason'? How about a) it is Made In Zimbabwe, b) it is good for the environment, c) you're not putting money into the pockets of the Saudis. Don't even try to pass a hitjob by on me. - MrK]

The other thing which motorists questioned was the percentage of ethanol which they say was too low as compared to other countries using the same product.
Most countries use E15 up to E100 with the price of their fuel remaining competitively low.

The more ethanol content there is in petrol blending, the less the price as the volumes of imported petrol will also go down.

“Why then is Zimbabwe on E10? This is why the producers cannot reduce the price of the fuel because of the low ethanol content. If they increase the ratio of ethanol to the petrol, they can easily reduce the price which every motorist is looking forward to,’’ continued Mr Mawerera.

But according to Green Fuel assistant general manager Mr Raphael Zuze who took The Sunday Mail In-Depth for a tour of the Chisumbanje plant last week, the pricing issue was not the reason why the product was not selling.

To him it should be mandatory for every fuel importer to blend their petrol with the local ethanol.

“I do not agree that motorists are resisting our product because of the price. It is just a belief which has been created that needs to be eradicated. We are asking the authorities to make it mandatory for every fuel importer to use our ethanol to blend what they import,” said Mr Zuze

“Once that becomes mandatory, we will see how much the country saves in terms of foreign currency which can then be used towards other pressing issues,’’ said Mr Zuze.

On why the company started at E10 while other countries are using between E15 and E100, Mr Zuze said Zimbabwe started at the low ratio because the general belief was that most cars were old models.

As such high ratio of ethanol use would definitely damage the engines of old vehicles.

“We are introducing ourselves slowly and we are going to increase the ratio, but we can only do that with a guaranteed mandatory blending licence. This will help us to determine what our market needs. It is true that if we go up to between E15 and E25, the price of fuel will definitely go down,’’ said Mr Zuze.

He said the company was able to meet the market demand and it planned to build two more plants, one at Middle Sabi and the third one at Chisumbanje.

Green Fuel factory manager Mr Peter Glaum said motorists needed to understand that the use of anything between E15 and E25 required vehicles to be fitted with converters.

“The converter changes the fuel-air ratio. Depending on the car, most of the local vehicles require converters to use anything between E15 and E25. That is why we started at E10 because we were not sure of the state of the local cars,’’ said Mr Glaum.

However, an increase in ethanol blend would see the company paying more money to the Government in licence fees.

“It is true that if we want to go for E20 we have to apply for a licence for that, be it E15 or E25, the charges are much more than what we paid for the E10 licence, but this is not the reason we started low,’’ said Mr Glaum without disclosing the total amount of fees paid out.

But it is the absence of activity at Chisumbanje Ethanol Plant that has left the surrounding community and the nation calling for speedy solution to reopen the project.

Developmental projects that had started mushrooming in the area have since been affected with villagers whose fields that had been incorporated into the Green Fuels irrigation plan suffering the most.

“Now that the plant has been shut down, our crops are wilting as we are no longer irrigating. We had hoped to plant crops year round, taking advantage of the irrigation facilities, but our hopes have now been dashed.

“We are only hoping the plant will resume anytime soon so that we do not starve,’’ said Mr Charles Chipanje, chairman of Chinyamukwakwa Irrigation Project which has 600 hectares of land benefiting about 1 200.

Because of the closure of the plant, only 300 hectares of land is now being irrigated and fears are that the hectarage could be reduced.

Chief Garahwa, whose people were beneficiaries of the project, said he was disturbed by the closure of the plant as most youths in the area who had been employed had since been laid off until the company resumed operations.

“Our children had secured employment. Now we fear they might resort to criminal activities since they no longer have any source of income.

“We appeal to the authorities to quickly make a decision so that the plant is opened soon,’’ said Chief Garahwa, who had also visited the company executives to express his concerns over the closure of the plant.

Green Fuel has since laid off about 230 employees as a result of the closure of the Chisumbanje plant.

The nearby Checheche Growth Point, which had become a hive of activity, has also been affected by the closure of the plant.

Most business ventures that had opened at the centre are closing down, citing reduced receipts as most people are now unemployed.

On the other hand only four out of the nine banks that had also opened still remain functional while some business people are failing to make long-term plans on their ventures as they are uncertain on what the future holds.

“The situation is being made worse because of the uncertainty that surrounds the ethanol project.

“We no longer have serious business activity in this area,’’ said one businessman, Mr Shadreck Nyabeta.

Despite the ethanol project being viewed as a panacea to the country’s fuel problems, it seems the venture is failing to live up to its billing.

Millions of litres of ethanol are lying idle in Chiredzi, at a time motorists are waiting for cheap and reliable fuel.

Labels: ENERGY, ETHANOL

posted by MrK @ 1:37 PM