HomeNewsGovt cancels $1,3bn Hwange tender

Govt cancels $1,3bn Hwange tender


GOVERNMENT has cancelled the $1,3 billion tender it awarded to China Machinery and Engineering Company (CMEC) for the expansion of the Hwange Power Station saying the Chinese firm failed to deliver.


CMEC was awarded the tender to build two units of 300MW each under controversial circumstances after it emerged that the firm was charging over $300 million more than one of the bidders, Sino Hydro.

In a notice yesterday, Energy and Power Development minister Dzikamai Mavhaire said the tender has now been awarded to Sino Hydro, the second highest bidders for the 600 MW power expansion project.

“CMEC, however, failed to conclude the contract within the stipulated time frame that they had agreed upon with the Zimbabwe Power Company and the government of Zimbabwe, hence the tender was cancelled in May 2014. The government, through the Ministry of Energy and Power Development has, therefore, directed that the tender be awarded to Sino Hydro,” Mavhaire said.

He said Sino Hydro were the second highest bidders for the power expansion project. Sino Hydro’s bid was $ $990 million.

The tender for the expansion at Hwange Power Station was awarded to CMEC in 2012 when Elton Mangoma was Energy minister.

Mangoma defended the awarding of the tender to CMEC.

The delay in carrying out the expansion works meant that the power crisis in the country would persist. If Sino Hydro were to start work today, the project would be completed in 2018.
Sino Hydro was also working on the $500 million Kariba South expansion that will add two units of 150 MW each. The project requires 42 months to complete.

While appointing board members on several state enterprises and parastatals under his ministry, Mavhaire said the power crisis was topical.

Zimbabwe is battling bitter electricity cuts that have hamstrung the operations of industries, the price of under investment in the power generation sector.

Sino Hydro won the tender for the expansion of Kariba South Hydro Power Station.

As of yesterday, power generation stood at 1 351 MW at a time demand was averaging 2 000MW per day.

According to the 2014 national budget, electricity generation was expected to grow by 4,5% spurred by rehabilitation projects at Hwange and and other power stations.

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