Eskom disconnects Zim

Source: Eskom disconnects Zim – The Zimbabwe Independent August 12, 2016

SOUTH African power company, Eskom, last week disconnected its electricity supply to Zimbabwe, plunging large parts of the country into darkness on Heroes Day as the Southern African country is experiencing serious power shortages which have made it impossible to continue with exports.

By Elias Mambo

The disconnection of 300MW by Eskom comes at a time the controversial Dema Diesel Power Plant has run into compliant problems resulting in its failure to feed into the national grid.

Sources said the Dema project was supposed to have been connected to the national grid early this month, but has experienced various problems, including serious fuel shortages.

The project, which was initially valued at US$194 million a year, was awarded to Sakunda Holdings, owned by Zanu PF benefactor Kuda Tagwirei, who partnered President Robert Mugabe’s in-law, Derrick Chikore, without going to tender.
Derrick is brother to Simba who is married to the president’s daughter Bona.

As reported by this paper a few weeks ago, Aggreko, a company which supplied the diesel generators, in April dispatched a team of close to 50 people to Zimbabwe among them project managers, operations managers, engineers, commissioning staff and other specialists.

The team came from Dubai, where Aggreko’s international projects business operates from as well as South Africa and other African countries.

Sources close to the development said the team has been in the country for this long without making much progress because Sakunda had problems with the Zimbabwe Revenue Authority, which refused to clear certain equipment urgently and allow operations to commence before relevant taxes were paid.

“Since July 7, engineers were running high voltage tests. The plant ran for a week then it was down,” the source said. “It is still being commissioned and that is what happens when testing frequency voltages.”

Sources also said engineers are working flat out to make sure the plant runs so that power shortages are abated.

Despite clear evidence of irregularities and corruption, Zesa sources said consumers will be forced to pay increased tariffs to accommodate Aggreko, Sakunda and some other people in the background of the controversial deal.

The project, which is under the direct supervision of the Office of the President and Cabinet, is part of a string of scandals rocking state power utility company, Zesa Holdings.

Documents show ZPC will pay US$8 million in advance every month for the Dema project which could run for three years.

The Zimbabwe Energy Regulatory Authority (Zera) has already approved a tariff of 15,45 US cents/kWh for the power purchases agreement.

By comparison, electricity generated at Kariba costs 4,11 USc/kWh, while that from Hwange Thermal Station costs 6,97 USc/kWh, making expansion projects far cheaper.

The Dema deal, documents show, will have serious cash-flow implications on Zimbabwe Power Company, hence Zesa’s recent application to increase the tariff by 49% which was interpreted by electricity consumers as an attempt to force the power utility’s struggling customers, already battling with huge bills and poor service delivery, to subsidise corrupt activities.

Zera, however, turned down the application last month meaning electricity tariffs will remain at 9,86 USc/kWh for the remainder of 2016.