MERNAT MAFIRAKUREWA, CHIEF BUSINESS REPORTER
News Day (Zimbabwe), Jun 16 2011
Bureaucracy and bungling in the government has stalled the $3 billion
Kariba South Bank power station expansion, a development that has led to
the expiry of a memorandum of understanding (MoU) signed between
government and Sinohydro Corporation limited of China.
The one year MoU signed last year in April was due for extension in
April this year to enable the conclusion of an agreement between
Zesa/Zimbabwe Power Company but is yet to be extended.
Documents at hand show that spirited efforts by Sinohydro to have the
deal re-signed has so far hit a brick wall.
Last September, Sinohydro submitted its comprehensive project
implementation proposal including conceptual design, construction,
methodology, work programme, site organisation, financial offer and
"The valid period of the MoU signed on April 8 2010 will be extended
from April 8 2011 to December 2011, to conclude the Contract Agreement
between Sinohydro and Zesa/ZPC," reads part of the MoU signed by Finance
minister Tendai Biti on behalf of the government.
The revelations come at a time stakeholders on Tuesday castigated Zesa
for high tariffs and excessive load-shedding.
In a recent letter to the deputy chief secretary economic research and
policy analysis, Sinohydro Corporation representative Wang Liping, said
the company has been expanding North Bank Power Station in Zambia, with
funds from the China Export-Import Bank (Eximbank).
"As per work progamme, main civil works will be completed by this
October. Therefore, it is possible to kick off the construction of the
expansion of Kariba South Bank Power Station within a short time after
the contract agreement signed by your government and Sinohydro by the
end of this June," said Liping.
"Sinohydro promises to start the project desin and preliminary works at
its cost prior to the financing closure.
"With this regards, Sinohydro will make efforts toward development and
construction of the expansion of Kariba South Bank Power Station. I wish
Your Honour could urge relevant authorities to launch the contract
negotiations between Sinohydro and Zesa/ZPC so as to conclude the
contract agreement and start the implementation of this project."
Fully owned by the government of China, Sinohydro has completed over 100
medium and large-size hydro-power stations generating over 1 000MW each.
"With the rapid recovery and development of the economy in your esteemed
country, there is the looming demand for power supply accordingly.
Your Excellency also recognised the urgency and importance to increase
the generation capacity to meet the demand of economic development and
poverty reduction through expanding the Kariba South Bank Power
Station," Liping said in his letter.
Documents also show that Sinohydro have already secured support to fund
the project from the China Eximbank.
Stakeholders have also called for the unbundling of entities currently
operating under Zesa Holdings and to privatise all power generating
stations in order to turn around the fortunes of the country's power
In recent years, Sinohydro has successfully assisted some foreign
governments and local authorities securing funds from China for the
development and construction of almost 30 large energy projects in
Africa, Asia and Latin America.
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