Africa Moyo —
The re-powering of the Bulawayo Thermal Power Station, which was expected to cost $87 million, has hit turbulence after it emerged that the only company that tendered its bid did not meet the Zimbabwe Power Company (ZPC)’s price expectations. Under the initial arrangement, the Indian Exim Bank was going to pump $87 million into the project, but its draft contract was rejected by ZPC.
ZPC, which is the power generation arm of Zesa Holdings, believes a figure in the region of $120 million is close to the required sum. The tender for the Bulawayo Thermal Power Station re-powering project closed on August 22 this year, with only one bid being received from ThyssenKrupp Industries (Pvt) Limited, in conjunction with Technofab Engineering (Pvt) Limited and the JV from India, sources say.
Business Weekly understands that ZPC felt the $87 million bid was inadequate to repower Bulawayo Thermal and a decision is said to have been made that the project be re-tendered. Sources close to the project confirmed last week that it has indeed stalled after failing to meet ZPC’s price expectations.
“We are back to square one; the re-powering of the Bulawayo Thermal Power Station has been stopped.
“The information I have is that since only one company submitted its tender, its pricing did not convince management and a position was taken that the project be re-tendered.
“Of course, the State Procurement Board (SPB) is in the picture and when it was informed of the challenge, it did not object to our concerns, which clears the way for us to go back to tender,” said an impeccable source.
ZPC public relations executive Fadzai Chisveto asked for questions in writing but had not responded by the time of going to print. The developments come at a time when Government has brought urgency in the re-powering of thermal power plants as it moves to increase power generation in the country. With several other projects already underway such as the expansion of Kariba South Power Station and Hwange Thermal Power Station’s units 7 and 8 to boost output, Government wanted many power projects to be on stream to ensure uninterrupted power supply.
Upon completion, both projects would channel a combined 900MW to the national grid. The first 150MW from Kariba South are expected on December 24. Government’s desire to increase power generation has seen several power projects including Gwanda Solar, Kariba South, Bulawayo repowering and Tokwe Mukosi, being put under the Rapid Results Initiative (RRI). Projects under RRI, which is led by the Office of the President and Cabinet, will have their progress reviewed after 100-days until completion.
It is therefore unclear when the re-tendering and eventual works to re-power Bulawayo will begin. Currently, the construction of a $35 million mini-hydro power plant at Tokwe-Mukosi Dam in Chivi has also ground to a halt due to funding challenges. The Tokwe-Mukosi plant — which is being constructed by Salini Impregilo of Italy — is expected to generate 15MW which will be fed into the national grid. Work at Tokwe-Mukosi begun in the second quarter of this year after Government awarded the contract to build a $7 million power house where the mini hydro power plant would be installed, to the Milan-based firm.
The challenges regarding Bulawayo Thermal and the Tokwe-Mukosi power project, come at a time when fund raising is still in progress for the Harare re-powering project. ZPC wants to uprate production capacities at both Harare and Munyati to 120MW, while Bulawayo is earmarked to generate 90MW from the current average of 20MW. The re-powering of Harare is expected to cost $72 million. Yesterday, all small thermal power stations were generating 15MW while Hwange and Kariba were generating 395MW and 625MW respectively, for a combined output of 1 065MW.
The national demand stands at 1 400MW. Daily imports of about 350MW from South Africa and Mozambique would push up power availability. Despite the challenges faced by small thermal power stations, there are no fears for power shortages in the country as Zesa has paid significant sums of money to South Africa and Mozambique for imported power. Zesa chief executive officer Engineer Josh Chifamba last week told Business Weekly that its debt with Eskom and Hidroelectrica de Cahora Bassa (HCB) is “under control”, guaranteeing continuous power supply to Zimbabwe.