Expansion of power station hits a snag
BY RAY NDLOVU, JANUARY 15 2013, 10:04 | 0 COMMENT(S)
A MULTIMILLION-dollar deal between Zimbabwe Power Company (ZPC) and
Chinese-owned SinoHydro for the expansion of Kariba South power station has
been delayed amid indications the deal document breached procurement
regulations.
The delay will affect work on the expansion of the power station, which was
expected to increase power generation by 300MW. The state procurement board
was now likely to investigate, energy officials said on Monday.
At issue is the concern of SinoHydro about changes to the deal document,
including an increase from the initial $355m quote to $390m, for
“contingencies”, seemingly added by ZPC without consultation. Power
regulations stipulate that ZPC must first seek authorisation from the state
procurement board for any price changes.
“The actual contract was for $355m, but the total price that we signed the
contract for was $390m, including contingencies,” said Wu Yifeng, at
SinoHydro Zimbabwe. “It is the final price that was approved that concerns
us. We did not include the contingencies.”
Energy Minister Elton Mangoma said his office was not yet privy to the
“irregularities”, but advised that delays would increase the costs.