17 November 2016

Zimbabwe: MPs Tour Bona Mugabe-Linked U.S.$500 Million Dema Project

Photo: The Herald
President Robert Mugabe, his daughter, Bona Mugabe and wife Grace Mugabe (file photo).

PARLIAMENTARIANS toured the controversial Dema Power Project this Thursday to familiarise with the development ahead of an appearance by Sakunda energy before the Mines and Energy committee next Monday.

The parliamentary committee is investigating the processes leading to the launch of the three-year project whose cost stands at about $500 million.

Sakunda is developing the emergency power project in partnership with the brother to President Robert Mugabe's son-in-law Simba Chikore. Glasgow headquartered company Aggreko is also involved.

Reports have claimed that due process was not followed in granting the tender to Sakunda and its partners ahead of other companies which had submitted "more economic bids".

Thursday's tour was preceded by the Zimbabwe Energy Regulatory Authority's (ZERA) failure to provide satisfactory answers when it appeared before the parliamentary committee this Monday.

The project has been handed key concessions by the government, including importing duty free diesel at a rate of 450,000 litres per day, duty free equipment worth $660 million - sparking a public outrage.

"After all those, the product (power from Dema) is still expensive for our people, in fact the most expensive in the region," Daniel Shumba who chairs the committee said during ZERA's Monday appearance.

According to Shumba, electricity from Dema costs 15,45 cents per kilowatt against 9 cents for the same when importing from South Africa.

Although the plant has a capacity of 200 megawatts, it is generating 100 megawatts per day after power utility ZESA said it was not able to take up full production at that cost.

ZERA chief executive officer Gloria Magombo however, defended the project saying: "It might not be the best in terms of affordability but it's ensuring continuity of supply and that's why we have no load shedding at the moment."

She added, "We have recommended that for future procurements, all IPPs (Independent Power Producers) and energy mix be done through competitive tendering.

"We have recommended that the ministry come-up with an IPP policy."

Shumba said, "Do you agree that it's irregular for a process to be commissioned before the legal processes have been signed off?" to which Magombo answered "Yes sir".

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