Curtain falls on Westcor’s Congo project
But SA has already committed to new power-producing joint venture, writes Tom Nevin
AFTER three postponements, the final meeting to end the Western Power Corridor Company’s (Westcor’s) failed multi-government-owned venture in the Democratic Republic of Congo will take place today at Eskom’s headquarters in Johannesburg.
SA has stepped into the breach once more. In the final days of August, President Jacob Zuma and Congo’s President Joseph Kabila signed a treaty that binds the two countries to jointly developing the five dams of Grand Inga, at an estimated cost of $80bn, with potential capacity of 100,000MW.
Westcor was equally owned by the governments of SA, Angola, Botswana, the Congo and Namibia, and the work involved feasibility studies for large-scale hydroelectric power generation on the Congo River and the transportation of the bulk electrical energy to the national grids of the participating countries and the rest of Southern Africa. Its formation took place eight years ago.
As SA struggles with high energy costs and poor capacity, the project was seen as the key to helping alleviate the problems.
But in February 2010, the Congo delivered a fatal blow. It announced it was pulling out of the Westcor consortium — a Southern African Development Community (Sadc) initiative — and would be developing Inga 3 on its own. Westcor effectively collapsed — no new build has taken place and the project slips increasingly into decrepitude.
This is the legacy that SA could be stepping back into.
Independent economist Jeremy Wakeford believes that the Grand Inga joint venture that SA and the Congo have entered into has a better chance of success if the parties get the politics and institutional issues right first.
“If it were down to economic factors, there are big obstacles to be overcome, such as the amount of finance that will have to be sourced, but these are not insurmountable and the parties have every economic interest to succeed in the project,” Mr Wakeford says.
“I think it’s a risky business. But I can understand why Eskom and the government are keen to go ahead — it’s looking like one of the biggest energy prospects in terms of reasonably priced baseload [minimum amount made available] power.”
Will the Grand Inga development with the Congo stand a better chance than the ill-fated Westcor initiative? Ken Robinson, a senior executive at management consultant Accenture SA, believes it will if it is adopted by SA’s Presidential Infrastructure Co-ordinating Commission.
Mr Robinson believes the project would make an excellent stand-alone addition as the 18th strategic project prioritised by the president’s infrastructure body, giving it the impetus it needs to take off.
“It would then have to be sponsored by Eskom with support from the commercial banks, IDC (Industrial Development Corporation) perhaps, and local investors,” he says.
At no real additional cost, electricity from spare capacity could be delivered to the more impoverished countries at a cheaper rate, because the project is largely based on fixed costs.
But will the project meet that all-important aim of creating opportunity for the 80% of Africans in Sadc countries who do not have electricity, mainly because they cannot afford it?
“For me,” says Mr Robinson, who has special responsibility for Accenture’s Eskom portfolio, “the key is to manage the project — dam, power station and transmission lines — at a cost you can recover in a reasonable electricity price.”
The heads of Westcor were meant to meet on Monday in Gaborone for the last time, but that meeting was reportedly delayed due to visa troubles.
Hence the need to quickly change venues, but today’s meeting is set to bear witness to the final chapter of a brave but ultimately failed enterprise.