HomeLocal NewsCorrupt Zesa deals under probe

Corrupt Zesa deals under probe

LAWMAKERS under the Parliamentary Portfolio Committee on Mines and Energy are probing Zesa Holdings’ energy deals worth hundreds of millions of dollars which have already caused uproar within corridors of power while paralysing power generation and delivery, it has been established.

By Bernard Mpofu

Zimbabwe is facing a perennial energy crisis due to the mothballing of pre-colonial plants, a growing population and limited investment in the capital intensive sector. It has also been established that Energy minister Samuel Undenge and Transport minister Jorum Gumbo will appear before the parliamentary committee on June 5 to explain the awarding of tenders, the viability of the projects and the cost-benefit of such deals.

Sources say some of the deals that will come under scrutiny include the Kariba South expansion programme, Dema Emergency Power Plant and the Gwanda solar project. “The committee will look at legalities of contracts, tenders, cost-benefit analysis, as well as Zesa pre-paid tokens. Operational issues at independent power producers will also be scrutinised,” a source familiar with the developments said.

The committee, sources said, has done site visits at Zesa Holdings, Zimbabwe Energy Regulatory Authority, Zimbabwe Electricity Transmission Distribution Company, Mutare Peaking Plant, and Central Mechanical Equipment Department as part of the probe.

Already, the State Procurement Board (SPB) — which last August admitted that it had erred in awarding a 120 MW emergency Mutare Peaking Plant to Helcraw Electrical following revelations that the company provided two units instead of up to four with generation capacity between 30MW and 40MW — has given oral evidence to the lawmakers.

Helcraw was awarded the tender instead of Pito Investments which had been recommended by the Zimbabwe Power Company. SPB chairperson Buzwani Mothobi then undertook to revisit the tender submissions and regularise the exercise.

On Monday, the energy committee met to review its work plan.

The Daniel Shumba-led committee, sources said, now wants to investigate the multi-million deals which include partnerships with the Chinese government.

Despite a sharp decline in industry energy demands, the country continues to grapple with rolling power outages.

Only this week, South Africa’s power utility — one of Zimbabwe’s go-to energy suppliers — announced that it would switch off its neighbour due to a growing debt.

The local power utility imports 300 megawatts (MW) per day from South Africa and currently owes Eskom US$44,5 million, of which US$8,9 million is outstanding arrears. Acute shortages of foreign currency have seen the southern African nation struggle to pay for imports. The imports from Eskom are backed by a R500 million guarantee issued by government.

Over the last few years government has engaged in shady energy deals with controversial businessmen and companies to boost power generation.

Last year, the Zimbabwe Power Company bosses stepped efforts to cancel convicted fraudster Wicknell Chivayo’s murky multi-million-dollar energy deals which have caused public uproar.

The power-generating firm is also pushing for the cancellation of the US$5 million advance payment irregularly paid to the controversial youthful businessman in the US$200 million Gwanda solar project.

The shady power-generation projects have been inflated by more than US$500 million, raising suspicions that Zesa senior managers and top government officials could have corruptly benefitted through price escalations.

The Zimbabwe Independent has reported extensively on the Dema Emergency Power Plant in which government was prejudiced through inflated cost structures. The cost of the Dema project escalated alarmingly from US$249 million to US$498 million over three years, after the government directed the controversial project’s managers to double its output to 200 megawatts at US$166 million per year as Zimbabwe fails to pay for power imports.

Dema Power Plant — mired in brazen corruption — sparked outrage as it became increasingly clear that electricity consumers and taxpayers would be further burdened with the project’s unsustainable and unjustifiable costs.

Sakunda Fuel owner Kuda Tagwirei partnered President Robert Mugabe’s in-law Derrick Chikore for the project without going to tender.

The deal, which is being supervised directly by the Office of the President and Cabinet, was initially meant to cost US$194 million a year, before it was reduced to US$83 million a year but has now shot up to US$166 million a year.

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