Zesa, BCC agree on compensation for power station use  - Zimbabwe Situation

Zesa, BCC agree on compensation for power station use 

Source: Zesa, BCC agree on compensation for power station use | The Sunday News September 15, 2019

Zesa, BCC agree on compensation for power station use

Vusumuzi Dube, Senior Municipal Reporter 

AFTER years of fighting between the Bulawayo City Council and Zesa, a subsidiary of the Zimbabwe Power Company, over the ownership of the Bulawayo Power Station, the impasse seems to be coming to a conclusion with the latter noting its preparedness to compensate the local authority for the power station.

This came out after a closed meeting between the local authority and Zesa, presided over by Deputy Minister of Energy and Power Development, Cde Magna Mudyiwa. According to a council confidential report, the meeting came about after councillors led by the mayor, Councillor Solomon Mguni walked out of a meeting that was held at the power station, attended by Energy and Power Development Minister, Advocate Fortune Chasi a couple of months ago. Adv Chasi then dispatched Deputy Minister Mudyiwa to lead a delegation of Zesa officials to the council chambers to seek an amicable solution to the impasse.

“The meeting was basically centred on the power station, that is, the ownership, the demolition of the cooling towers and refurbishment. It was agreed that the Bulawayo City Council engineers would meet with ZPC engineers to interrogate the report that had been prepared by the ZPC consultant. In particular they would look at the report from a structural integrity perspective as well as what could be done to preserve the towers.

“ZPC was committed to setting up a meeting where the issue of compensating BCC for the power station or it being taken back to BCC will be discussed. It was also agreed that should the parties agree that BCC should be compensated, then the parties would meet the costs of evaluation of the power station in equal shares,” reads the report.

The parties further resolved that these negotiations should have been completed by 31 October so as to kick start the refurbishment of the power station. The local authority also, at the meeting, confirmed that it had no challenges with the power utility proceeding with the project of harnessing water from their Khami dam, as long as it consulted council engineers.

However, while the local authority also gave a go ahead for international bidders to come and conduct a site visit to evaluate the project, they rejected a request from the power utility to have BCC withdraw its objection to the application by ZPC for their electricity generation licence to be extended by 20 years from 2024. Councillors also stopped the power utility from continuing with the refurbishment while the negotiations go ahead.

“It is important to note that the requests from ZPC had a huge effect on the council’s pending case in that, withdrawing the objection would mean ZPC would proceed to get a licence and that licence would facilitate the refurbishment of the main power station. This would remove pressure from ZPC to resolve the ownership and payment of royalties’ issues. The pending cases would therefore be argued without pressure on the part of ZPC whereas the pressure might be a push to resolve this long outstanding issue without delay,” reads the report.

In debating the matter, councillors reported that the main hold up was the ownership of the power station, hence there was a need to resolve the ownership issue before tackling other matters. They further noted that demolishing the towers would require widespread consultations with residents.

“In response to the sentiments raised by councillors, the chamber secretary (Mrs Sikhangele Zhou) advised that indeed the ownership had been raised by the council team and the matter was also pending in courts.

“The Zesa team however, needed to consult its board on the matter. In the event that compensation was offered, her opinion was that council should accept the offer as opposed to taking back the power station as council might face capacity problems to operate the power station. She advised that council would explore various ways in which the compensation could be made,” read the minutes.

The power station has of late been subject to controversy after the power utility announced plans to demolish two cooling towers as part of its major refurbishment.  ZPC had noted that the two towers had outlived their life span and now posed a hazard due to the numerous cracks in its structures.

According to Zesa’s website, the Bulawayo power station is connected to the national grid through the 11 kilo-voltage and 33 kilo-voltage systems.

“The plant was commissioned between 1947 and 1957 as an undertaking by the Municipality of Bulawayo. It joined the Zimbabwe Electricity Supply Authority in 1987 after the amalgamation of all the Local Authority Electricity Undertakings, the Electricity Supply Commission power station at Munyati and Hwange, and the Central African Power Corporation station at Kariba. 

“While Bulawayo Power Station initially had an installed capacity of 120 megawatt, a refurbishment exercise in 1999 on the ageing plant gave it a new lease of life. The station capacity is now 90 megawatt. The main materials needed for the generation of electricity are coal, water, chemicals, oil, greases and spare parts for maintenance. The station currently generates an average of 30 megawatt,” reads part of the citation.

The Bulawayo thermal power station became part of Zesa in 1987 after the amalgamation of all the Local Authority Electricity Undertakings. The power utility to date owes the local authority more than $100 million in royalties.

COMMENTS

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    ace mukadota 1 month ago

    ZESA owes BYO 100 million USD and will of course only repay 100 million RTGS – thats how govt cheats the country’s people – by devaluing the currency – understand how it works now comrades !?