The Herald (Harare)

10 February 2014

Zimbabwe: Kariba South Power Extension Uncertain

The expansion of Kariba South Power Station is now uncertain with the Zimbabwe Power Company and Sino-Hydro of China wrangling about their contractual obligations.

As such, no work has been done despite past claims by Government and Zesa officials that all was on course for the project that could significantly ease Zimbabwe's power shortages.

Shovels were expected to have hit the ground last month, but several pre-conditions ranging from monetary to technical issues are yet to be settled. Far from Energy and Power Development Minister Dzikamai Mavhaire's assertion last week that Government had fully paid its obligations of US$35,5 million to the Chinese company for work to begin, a visit to the site last week revealed that nothing has moved.

The US$355 million project is to build two generators that will boost Kariba South's capacity from 750MW to 1 050 MW. China Export and Import Bank is to provide US$320 million (90 percent of project cost) and Government, through ZPC, will supplement the balance.

In a presentation to Energy and Power Development Deputy Minister Engineer Munacho Mutezo during a tour of the power station last week, ZPC senior project manager Engineer Wellington Maphosa said actual construction would start only after all conditions are fulfilled or waived. The Deputy Minister was accompanied by secretary in the ministry, Mr Partson Mbiriri.

"The contractor is mobilising on site but according to contract law, the project has not yet commenced," he said. "The biggest problem is the draw down from China Exim Bank, who want to see if the 10 percent from our side is there for them to release their portion as agreed in the contract.

"We looked for a bank (name supplied) to give us that money but the bank also needed a down payment of 25 percent of the amount we require (US$35,5 million), which is US$8,8 million."

The loan will be used for such services as engineering, equipment and actual construction to be done by the contractor. Eng Maphosa said the design layout of the project had not yet been approved because Sino Hydro was still to give them all the information requested in the layout.

"They gave us the first design for approval on July 9 last year and we said some information was missing," he said. "They gave us a revised design on October 25, but still most issues we pointed out had not been addressed and this is taking months to happen.

"If you tell them to address 10 things, they will take months and when they submit the report only three issues would have been addressed, which is a challenge."

The two parties, Eng Maphosa said, were also to agree on the manufactures of major equipment to be used.

"This is a big project and heavy equipment is required and we have to be satisfied and agree on a reputable manufacturer. The major equipment includes turbines, transformers and generators and we are awaiting for the Sino Hydro procurement process ending at the end of February."

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