THE cost of the expansion of Kariba South Power Station has escalated after the cash-strapped Zimbabwe Power Company (ZPC) sub-contracted a local transport company called Admire & Sons to supply sand from Karoi to Sinohydro, incurring exorbitantly high fees for the deliveries, it has been established.
By Staff Writer.
Admire & Sons transport company, which is also known as Ebenezer, is now supplying sand to Chinese firm Sinohydro after taking over from Townsend Enterprises Pvt Ltd whose one-year contract expired in December last year.
However, according to sources close to the developments, the company is being paid twice as much as what Townsend used to be paid for the same job.
“The company is being paid about US$120 per cubic metre of sand, while Townsend was charging US$51 prior to the termination of its contract,” said the source.
Townsend was denied a contract renewal after it requested a price increase from the US$51 to US$71 per cubic metre. According to various transporters, ferrying sand from Karoi to Kariba should cost between US$45 to US$60 per cubic metre.
The money paid to Admire & Sons automatically increases the price of the construction of the dam wall from the current US$533 million. It is not the first time the cost of the dam wall has escalated, raising eyebrows and fears of corrupt deals.
In terms of the agreement signed in 2012 between ZPC, a subsidiary of power utility Zesa Holdings, and Sinohydro Corporation, the expansion project was to cost US$355 million.
A loan agreement of US$355 million for the project, located on the south side of Kariba Dam, was signed in November 2013. China Eximbank agreed to finance the project to the tune of US$355 million.
Under the contract, China Eximbank was to avail US$320 million and ZPC was expected to provide about US$35 million for the project.
Due to cost escalations, ZPC is now expected to provide more than US$213 million towards the project instead of the initial US$35 million.
Admire & Sons is getting the sand it delivers for construction of the dam at Badze River, west of Karoi, and is 210 kilometres away from the construction site at the Kariba Dam wall, whereas Townsend would get its sand from Gache Gache river 70 kilometres from the dam wall by road and less across the lake.
Residents in Karoi are complaining that the Chinese firm Sinohydro contracted people to poach sand at Badze River, resulting in siltation and environmental degradation.
The residents are also complaining that Admire & Sons is transporting heavy loads of sand 420 kilometres to and from Badze River daily, badly damaging their roads.
It is understood that the Admire & Sons transport company routinely transports 120 tonnes/80 cubic metres per day. The trucks travel from Badze River and go via Magunje growth point-Harare-Chirundu road-Makuti and to its final destination Kariba, apparently making the road inaccessible to small vehicles as it is now littered with patches and potholes.
Sources close to the developments told this paper that Admire & Sons is transporting sand from Badze River to Sinohydro without proper documentation, such as permits from the Environmental Management Agency (Ema).
However, Admire & Sons proprietor Admire Ushewokunze said it is not his company’s obligation to get a permit from the Ema as his company is only transporting the sand.
“According to the Rural District Council Act, all natural resources belong to council. We are just transporting the sand from Badze River; it is not us who are supposed to get permission from Ema,” Ushewokunze said yesterday.
“As for how much we are being paid for our services, I can tell you that the cost is acceptable to the contactor, but due to my contractual obligations I cannot tell you the exact prices. I can, however, confirm to you that we have been working with Sinohydro for more than three years now.”
Ushewokunze said his company was delivering sand to Sinohydro before Townsend came into the picture, before its contract was terminated and later on activated. After Townsend’s contract expired, Admire & Sons was then asked to immediately start supplying sand again.
Townsend owner Chris Hokonya said Sinohydro and ZPC had treated them unfairly as they refused to increase their cost charges despite numerous attempts to engage them.
“The water levels declined and the lake coastline receded from where we were getting sand, so we had to move a further 16 kilometres from the construction site which meant that transportation costs of the sand automatically rose,” said Hokonya.
“I can tell you that since April last year, we engaged Sinohydro and explained why we wanted an increase, but no progress was made up until the expiry of our contract, which is not fair because we ended up using more than we were paid and yet now they are willing to pay someone else double what we used to get for the same job.”
ZPC spokesperson Fadzai Chisveto could not be reached for comment as her mobile was unavailable and questions sent to her on email had not yet been responded to by the time of going to print.