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Zesa’s Chinese deal in limbo

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THE expansion of the Kariba South power generation project is reportedly hanging in the balance after China allegedly demanded that the government should first pay off a $27 million debt owed to it for the supply of agricultural equipment before the Chinese contractor awarded the job carries out the task.

THE expansion of the Kariba South power generation project is reportedly hanging in the balance after China allegedly demanded that the government should first pay off a $27 million debt owed to it for the supply of agricultural equipment before the Chinese contractor awarded the job carries out the task.

Report by our Bureau Chief

In his 2013 National Budget review report, chairman of the Parliamentary Portfolio Committee on Mines and Energy Edward Chindori-Chininga said the project was now in limbo as the government had indicated it did not have the money.

Instead, the government has reportedly ordered Zesa to pay off the debt on its behalf.

Zimbabwe is reeling under a crippling power supply deficit, which has seen Zesa introducing stringent power-shedding regimes.

“The arrangement is such that the Chinese company brings in 85% ($368 million) of the capital to build the two units (at the Kariba South plant),” Chindori-Chininga said in the report.

“However, this contract might not see the light of day because the government is running away from its responsibility of paying a $27 million debt which is owed to China for purchase of agricultural equipment.

“The government has ordered Zesa to pay the debt and yet the equipment bought is unrelated to Zesa’s core-business.” The equipment was imported by Farmers’ World (Pvt) and the Industrial Development Corporation.

Chindori-Chininga said the government should not saddle Zesa with the debt, but meet its obligations for the project to take off.

Zesa already has heavy financial burdens such as the rehabilitation of the Hwange Power Station.

“Sino-sure has indicated that it will not release funding for Kariba South from the Chinese Exim-bank until the $27 million has been paid off,” noted the committee in the report.

The committee accused the Energy and Finance ministries of continuously haggling over the matter and failing to court a suitable investor for the expansion project.