Pay Mutare plant contractor, Undenge orders ZPC

ENERGY and Power Development Minister Dr Samuel Undenge has ordered the Zimbabwe Power Company management and board to pay the firm contracted to construct a 120-megawatt plant in Mutare for work on site to continue.

The company, Helcraw Electrical, had pulled off the site demanding payment of $337 000 from ZPC, which was “pro rata share of the pre-commencement costs of the initial activities undertaken on site”.

The $92 million Mutare plant is one of the key projects identified under Zim-Asset

r Undenge told The Herald that he had ordered ZPC to make a payment plan if they were facing cash-flow challenges.

Key projects, he said, should not stop because of failure by the power entity to meet contractual obligations.

“I have told them to ensure the key project doesn’t stop,” Dr Undenge said.

“I talked to the Zesa Holdings chief executive Engineer Josh Chifamba, ZPC board chair Stanley Kazhanje and my Permanent Secretary Mr Partson Mbiriri about the issue and everything is now under control. My understanding was that they would pay since everything is in order. I ordered them to call the contractor and make arrangements.”

Dr Undenge said ZPC management had cited cash-flow challenges as the reason for not paying.

“They highlighted the constraints that they have, that they owe suppliers about $69 million,” he said.

“I told them to make an arrangement while the project continues. Everyone understands the cash flow challenges.

“They assured me that they will make arrangements with the contractor, but I emphasised that, that they should honour their obligations as stated in the contract so that there won’t be any stoppages, which in turn affect implementation of Zim-Asset.”

He added: “There is no sabotage so to speak, but the contractor has to be paid. I will monitor the progress because our economy is driven by energy.”

ZPC board members are being accused of throwing spanners into the works on the implementation of the power projects identified under Zim-Asset ahead of next year’s harmonised elections.

The board appointed during the tenure of former Energy and Power Development Minister Dzikamai Mavhaire, was refusing to authorise payments to contractors who would have done work on site.

Helcraw Electrical had pulled off site and had engaged lawyers for recourse.

The Mutare plant, whose contract was signed in December 2015, is part of efforts by Government to augment power supplies and reduce imports.

In a letter of demand to ZPC management written by T.K.Hove and Partners and dated March 11, 2017, Helcraw Electrical said they wanted the contract to be executed with both parties honouring their obligations.

Construction of the plant was expected to take 18 months.

“Our instructions are that in terms of Schedule 13 of the contract, the parties agreed that the initial activities were to be carried out, whilst waiting for the financial closure of the contract,” reads the letter.

“The parties further agreed that the pre-commencement works costs, estimated at $1,5 million were to be shared equally between the contractor and ZPC.”

The contractor completed the topographical survey (and geo-technical investigations without any contribution from ZPC.

“Furthermore, in the spirit of executing the contract and as a sign of good faith, Helcraw diverted the 33kv Odzi line at its costs, which was passing through the plant optimisation area to expedite work before financial closure. The activity was executed through a contract between ZETDC and Helcraw. ZETDC was paid by Helcraw for the work done.

“According to contract Schedule 13, ZPC should have paid their contribution before commencement of pre-commencement work,” reads the letter.

According to the letter, Helcraw engaged sub-contractors, who were now threatening to sue the company for money due to them.

The sub-contractors included PG Associates from India, Tarcon Zimbabwe, SoilTech and University of Zimbabwe geology department.