ZESA refused to buy Tagwirei’s Dema power plant for US$66m


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ZESA management admitted that it was pushed into the Dema project, against the advice of its own legal and technical advisors. Under that deal, ZESA would buy power from the plant at 15.45 US cents per kWh, above the price offered by other sources.

Gata said: “Sakunda were engaged for this project, even though they had not actually tendered in the initial floating of the tender. Their engagement was through a directive from the Ministry of Energy. The second note is that the engineers’ and lawyers’ reports had an adverse opinion with regards to the bankability of this project.”

When Sakunda failed to supply power the company incurred US$2.5 million in penalties, one of the terms of the supply deal. Still, Sakunda went to government to have these penalties written off.

“What I’m aware of is that the supplier approached government for the purpose of having these penalties written off,” projects manager Flora Chikonye told the committee.

ZESA managers conceded that, left to make its own decision, they would not take up such a project.

“We are aware of the cost of diesel power. It is not a technology that we are prepared to take, unless it’s really a last resort,” Chikonye said.

New projects at Hwange, Kariba and renewables would fill any supply gaps, and diesel power would not be a priority for ZESA, she said.

Gata said Parliament must act on protecting state owned enterprises from being told what to do.

“Our nation will need one day to revisit the subject of ministerial directives to public enterprises,” Gata said.

When “we consider the number of white elephant projects” and others that violate the law, “it is this issue of directives that needs to be qualified soon”, Gata told the MPs.

The burden is left to project managers to oppose projects that have been imposed from their superiors, who would be acting on the instruction of ministers, Gata said.

At the time it was given the contract in 2015, Sakunda had partnered Derrick Chikore, an in-law of then President Robert Mugabe, as business partner.-NewZwire

(429 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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