Dema gravy train: Living large on taxpayer dollars

IT is Friday night at a three-star hotel in Harare central business district when a group of foreign technicians saunters into the bar.

By Elias Mambo/Benard Mpofu

Immediately, the ambience changes. It is not common in Zimbabwe these days, after all, to see a group of merrymakers venturing into hotels in this tough economy.

The technicians have one thing in common — their worksuits are emblazoned Aggreko, an international company taking part in the controversial US$250 million Dema Diesel Power Plant, a corrupt and expensive electricity-generation project that has sparked outrage.

A few minutes later, their well-attended tables are loaded with imported beer and platters of grilled meat. The giggling, feasting and merrymaking — the eating, drinking, singing and dancing — serve as a confirmation that the technicians are living large.

As the night wears on and the wise waters sink and take effect, one of the technicians of Asian origin takes to the dance floor, getting down to South African music after mustering some Dutch courage. Before long, the technician is locked in a scuffle with one of his colleagues seated with a female patron. To avoid drama, two other men from the same group of technicians call the Asian man to order and the party continues.

Such has been the lifestyle of Aggreko’s foreign personnel since their arrival in Zimbabwe in April.

Aggreko supplied the diesel generators for the Dema project. The company in April dispatched a 50-member team, among them project managers, operations managers, engineers, commissioning staff and other specialists to kick-start the project, having been engaged by Sakunda Holdings.

Sakunda, owned by Zanu PF benefactor Kuda Tagwirei, who partnered President Robert Mugabe’s in-law Derrick Chikore, was awarded the contract, initially pegged at US$194 million a year, without going to tender.

Government reduced the Dema deal to US$83 million per year, following the Zimbabwe Independent’s exposé of how the project, supervised by the Office of the President and Cabinet, would cause a spike in electricity tariffs while crippling the Zimbabwe Power Company and the Zimbabwe Electricity Transmission and Distribution Company.

Presenting his mid-term fiscal policy review statement two weeks ago, Finance minister Patrick Chinamasa said government had put a waiver on the import duty for diesel used at the Dema plant so that costs remain at US15,45c per kilowatt hour (kWh) instead of US18c/kWh.

The tariff, however, remains high when compared to imports from the Southern African Power Pool as well as electricity produced at other power stations locally. Electricity generated at Kariba costs US4,11c/kWh, while that from Hwange Thermal Station costs US6,97c/kWh.

Zimbabwe imports electricity from the Zambia Electricity Supply Corporation at a cost of US5,18c/kWh, Mozambique’s Hidroeléctrica de Cahora Bassa (HCB) at US5,66c/kWh, South Africa’s Eskom at 13,32c/kWh) and Lunsemfwa of Zambia 8,00c/kWh.

While Zimbabwe is struggling to pay for its electricity imports, the government has inexplicably chosen a more expensive temporary project, which will hit the pockets of the poor. Evidently, that is of no concern to the Aggreko engineers who are enjoying the fruits of the deal—if their merrymaking is anything to go by.

Political analyst and Zimbabwe Democracy Institute director Pedzisai Ruhanya said the Dema project was an example of how authoritarian regimes focus on primitive accumulation of wealth than delivering services.

“That is how neo-patrimonial and personalistic regimes operate. Their focus is not so much on transformation of the political economy of the state to benefit citizens but on the will to safeguard power for their individual, patronage and clientelelistic projects,” Ruhanya said. “The will to power and not transformation is their primary focus.”

The power utility, crippled by the high charges of the Dema plant, applied for a 49 % tariff increase which was turned down by the Zimbabwe Energy Regulation Authority, leaving Zesa in a serious liquidity crisis.

While taxpayers bear the brunt of the corrupt project, the technicians are holding mid-week barbeques and weekend jamborees at the hotel in Harare. This has been the case since their arrival in April.

Social commentator Blessing Vava said the Dema deal is a monument to corruption and bears testimony to the Zanu PF regime’s abuse of taxpayers’ funds.

“It has always been the case. Zanu PF cronies have always abused taxpayers’ money at the expense of service delivery and addressing the plight of the majority of the citizenry,” Vava said.

“Zimbabwe suffers from misplaced priorities from the authorities. Resources from revenue collection are not being directed to the intended use, rather they are abused for lavish lifestyles of the shefs and their kith and kin while a majority of the citizens are suffering.”

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