Council in court over dodgy contract

July Moyo

HARARE North MP Allan Markham has dragged the city council and Local Government minister July Moyo to court to force them to review a contract signed by the local authority and Geogenix to develop a waste energy plant.

Markham feels that the contract will force the council to pay Geogenix in foreign currency for 30 years, resulting in heavy indebtedness for residents.

In his application to the High Court, Markham, the Combined Harare Residents Trust, Borrowdale Residents and Ratepayers Association, and the Centre for Alternative Development Trust cited the council, Moyo, Stewart Mutizwa, former Harare mayor Jacob Mafume, Phakamile Moyo and Geogenix as respondents, respectively.

Markham also wants the High Court to set aside the HCC decision to enter into the contract with Geogenix.

In his founding affidavit, Markham stated that the HCC had been looking for an investor to develop a waste-to-energy plant through which waste at Pomona dumpsite and other dumpsites is converted to renewable energy.

He said the city council hastily convened a meeting on February 28, 2022 and purportedly adopted or approved the recommendations.

“The decision to approve the contract by and between Harare City Council and Geogenix was grossly unreasonable, irrational and extremely detrimental to the interests of the residents, stakeholders and ratepayers of the City of Harare.

“The contract creates serious financial obligations for Harare City Council to pay Geogenix in foreign currency (US$) for a period of thirty (30) years. It is common cause that the first respondent’s waste collection costs are actually in the local currency (RTGS) and there is a huge disparity in the exchange rates of the local currency and the United States dollar.

“Harare City Council does not have capacity to meet this obligation without falling deep into an intractable debt trap or resorting to other developmental funds. The cost of the project is unsustainable,” the founding affidavit read.

According to Article 22.1 of the contract, when the contract commences, HCC will pay Geogenix a fee of US$40 per tonne.

“Irrespective of whether the Harare City meets the minimum threshold of waste delivery to Geogenix, it (Geogenix) shall invoice and shall be entitled to receive an annual fee, which is the amount equal and is not less than an amount equal to the minimum annual guaranteed waste quantity (in tonnes).”

Markham also stated that Moyo, who is part of central government, cannot dictate how devolution funds are used by HCC.

“It is common cause that the City of Harare is currently failing to collect waste from several places in Harare due to shortage of trucks. I understand that currently, the city of Harare has six working trucks,” Markham said, adding that the contract was too expensive for HCC.

“The failure of City of Harare to deliver the required tonnage would, however, not excuse it from paying Geogenix. In fact, assuming that the first respondent (City of Harare) fails to perform its obligations, which is highly likely given its incapacitation, Geogenix may choose to terminate the contract and walk away with US$3 500 000 for nothing.”

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