The State Procurement Board has finally awarded the tender for Kariba South Power Station extension to SinoHydro. The extension of Kariba South Station will add 300MW to the national grid. SinoHydro tendered its bid for about US$368 million.
This is almost half of the US$700 million it had agreed with Treasury in a memorandum of understanding signed for the project in 2010.
Zimbabwe Power Company managing director Mr Noah Gwariro yesterday confirmed the development.
"The tender for the project was awarded to SinoHydro (Corporation Limited) by the State Procurement Board," he said.
"The next step now is for us to negotiate a contract with the winning bidder. We intend to complete the negotiations by the end of the year.
"After those negotiations, the project would then resume some time next year."
Mr Gwariro said the project was likely to take about four years.
He confirmed that SinoHydro had charged about US$368 million for the project.
A source close to the developments said putting the project to tender had saved Government a lot of money.
"The Ministry of Finance had agreed that the project would cost US$700 million when they signed the MoU with SinoHdyro but the tender forced them to put a realistic figure because they were afraid of competition.
"It is unfortunate that Treasury had decided to by-pass the State Procurement Board where there is competition.
"This is an eye-opener to Government as they can now see that they should not rush to sign MoUs for projects which can be put on tender," said the source.
The SPB had no choice, but to award the tender because SinoHdyro was the sole bidder, said the source.
Ironically, the SPB had cancelled the tender following a recommendation by the ZPC.
The SPB claimed that the firm had failed to meet the tender requirements.
However, SinoHydro protested the decision saying the project should not be open to tender because of the MoU with Treasury.
The SPB claimed that SinoHydro had failed to provide the bid validity, spare parts list and site visit certificate.
However, SinoHydro contended that the reasons for the cancellation of the tender were weak.
The company's representative, Mr Wu Yifeng, said his company already had a deal with the Government for the project.
He said in their bid letter they stated that their tender would remain valid for acceptance by the SPB at any time within the period of 180 days from the date fixed by the SPB.
Mr Wu said their bid bond was valid until December 3, 2012 and thereafter for a further 35 days for action by ZPC.
Mr Gwariro said the tender for the expansion of Hwange power station was still open.
He said the winning bidder was expected to be announced next year.
Zimbabwe's electricity demand is estimated to be at 2 200 megawatts against available generation of 1 200 megawatts.