CABINET has ordered Energy and Power Development Minister Elton Mangoma to revise the contract for Kariba South Power Station expansion after unearthing political irregularities that were smuggled into the deal.
The State Procurement Board awarded SinoHydro of China the tender for engineering, procurement and construction of the power station. The project is set to increase power generation by 300 megawatts.
Sources said Minister Mangoma, who is also the MDC-T deputy treasurer, allegedly inflated the figure to boost his party's election budget ahead of the forthcoming general elections.
The firm had tendered a bid for about US$368 million, which was reduced to US$355 million after Government scrapped excise duty for the importation of equipment.
However, in signing the contract Zimbabwe Power Company and SinoHydro settled for US$390 million, breaching procurement regulations, allegedly at the behest of Minister Mangoma.
The parties said the variation would cover contingencies, which under normal circumstances should be included in the bid. Minister Mangoma yesterday confirmed that the deal was under revision.
"All I know about that is a decision was made by Government that the contract should be revised to show the figure that was tendered to be in line with the State Procurement Board regulations," he said.
"I have instructed them to do that and it is something being done. We agreed that whatever needs to be done should not cause any delay to the project.
"The contractor has moved on site and has started work. What is clear from my side is that the question of amount is being sorted out."
Minister Mangoma said Government would pay what it believed was reasonable.
"Government did not agree with the figure; that is the reason why I told them to go back and revise it and there is nothing more than that," he said.
However, sources said contingencies should have been factored in the bid.
"The idea to inflate the figures was done by Minister Mangoma, through ZPC and the contractor and this was meant to boost the MDC-T election budget as the country gears for elections," said the source.
"Unfortunately for them, the system was alert and the SPB asked questions why they needed a whooping US$21 million as money for contingencies.
"They failed to justify that amount and that is when Cabinet rejected such a shoddy deal and ordered that the deal be revisited," the source said.
Section 26 of the Procurement Regulations state that in the event of any variations, it should be approved by the SPB.
Contingencies should be sanctioned by the SPB but ZPC usurped the former's powers breaching procurement regulations.
SinoHydro representative in Zimbabwe, Mr Wu Yifeng, yesterday refused to discuss the issue.
"I cannot discuss that issue with you but I direct you to the Minister of Energy and Power Development (Mangoma)," he said.
ZPC managing director Mr Noah Gwariro was not available for comment yesterday.
The agreed US$368 million was almost half of the US$700 million SinoHydro had initially agreed with Treasury in a memorandum of understanding signed for the project in 2010.
The Kariba South Power Station expansion is expected to take about four years.
Zimbabwe's electricity demand is estimated at 2 200 megawatts against available generation of 1 200 megawatts.