Implementation costs for Deka Project to increase

Source: Implementation costs for Deka Project to increase | The Herald December 1, 2016

The cost of implementing the Deka Pump Station Upgrade and Pipeline project could increase after the Exim bank of India (EBI) advised that it will carry out an independent assessment of the project.This comes as the EBI turned down a request by Angelique of India – the Engineering and construction contractor for the project – to implement the Engineering Procurement Construction (EPC) in two phases.

The project has an initial estimated cost of $39 million.

EPC is a particular form of contracting arrangement used in some industries where the EPC Contractor is made responsible for all the activities from design, procurement, construction, to commissioning and handover of the project to the End-User or Owner.

The Deka project is being implemented by India’s Water and Power Consultancy Services (WAPCOS), and Angelique of India was contracted as the EPC Contractor.

And the Government secured a $28,56 million loan facility for the project from EBI.

Zimbabwe Electricity Supply Authority (ZESA) Holdings CEO Mr Josh Chifamba said recently the insistence by EBI for the project to be implemented in one go could result in the need for additional funding.

“EBI turned down the request to implement the Deka Project in phases. EBI advised that they will carry out an independent assessment to ascertain the cost of implementing the whole project at once,” he said.

After the independent assessment and if there is confirmation that there is additional funding required, the additional funding will the subject to approval by Government of India, through EBI, and the Government of Zimbabwe.

“If approved there will be pre-qualification to be done by the EBI as per the new LoC guidelines.”

The CEO explained why the EPC Contractor had sought to carry out the project in two phases.

“The reasons to suggest to implement in phases was because available funds were falling short by $11 million to do the whole project at once.

“The first phase would have covered 30, 7 kilometres at a total cost of $22 million being available funds. Part of the $28, 6 million was utilised on works done by local companies to ensure continuous supplies of water to Hwange Power Station. The other portion was for the WAPCOS services,” he said.

The Deka project entails the upgrade and rehabilitation of the existing Deka Pumping Stations, old raw water pipeline (42km) supplying Hwange Power Station and associated infrastructure, as well as installation of a new 42km pipeline.- BH24