Source: Govt guarantees Harare’s US$868m water deals | The Herald October 8, 2019Blessings Chidakwa Municipal Correspondent
Harare City Council yesterday approved the signing of US$868 million deals for water and wastewater projects with Chinese firms, with the Government reportedly going to assist council in repaying the loans, while the former will cede land as collateral security.
This comes as President Mnangagwa’s recent intervention to China over the outstanding US$72 million from the $144 million Harare Water and Sanitation Rehabilitation Facility from China-Exim Bank has started bearing fruit.
Council indicated that the Chinese firm was keen to revive the deal.
The US$860 million deals include, among others, Sinohydro US$237 425 804.68, China Gozhouba Group Company (CGGC) US$351 072 913, China Geo-Engineering Cooperation (CGEC) US$176 790 000, China Machinery and Engineering Corporation (CMEC) US$280 000 000.
Speaking on the sidelines of a special council meeting to approve the deals, town clerk Engineer Hosiah Chisango said the deals were part of an overall solution to end Harare’s water challenges.
“Our lack of capacity to repay the loans has been holding us back, but now that Government said it is going to assist us pay part of the loans that is how we want to commence these deals. Government said it can assist in the projects which are social ones.
“Council has adopted this, myself and the mayor will sign and submit to Government within the next three days.
“We are going to offer our land as securitisation, we are looking at a situation where we can borrow with a guarantee. We are not saying we are selling the land, but we will only use it as security,” he said.
Harare Mayor Herbert Gomba said China-Exim Bank officials have since followed up after President Mnangagwa’s visit.
“We are working on course to resuscitate the US$72 million from the China-Exim Bank to finish off the project that we started.
“The vice president of that company came and met with our teams and we were able to talk to them and we are now moving towards resuscitating that loan for us to resume,” he said.
While adopting a special Environmental Management and Finance and Development committees the council adopted that the town clerk be authorized to “sign commercial contracts between the City of Harare and SinoHydro, China Gozhouba Group Company (CGGC) and China Machinery and Engineering Corporation (CMEC) at a budgetary cost of US$868 498 717, 68 for water and wastewater projects under the Harare Metropolitan Master Plan for Reliable Water Supply Services to allow unlocking of funding by the Ministry of Finance.
The memorandum of understanding (MoU) between the City of Harare and China Geo-Engineering Corporation (CGEC) for the upgrading/rehabilitation of distribution network in Central Business District, Alexandra Park, Eastlea, Greendale, Borrowdale, Malborough, Mabelreign, Hillside, Arcadia, Hatfield and Prospect at an estimated cost of US$176,790,000.00.”
Harare further adopted that: “That the Town Clerk be authorized to sign a commercial contract with CGEC at the estimated cost. That Council notes that three companies with the exception of CGEC have signed Memorandum of Understanding with the City of Harare and have carried out pre-feasibility studies to the satisfaction of City of Harare.
“That Council notes that the companies will carry out a detailed feasibility study upon signing of the commercial contracts. That Council notes that the detailed feasibility study includes technical, environmental and financial models. The financial models will indicate how much the City can be able to pay back and how Government can assist in paying back the loans.”