PARLIAMENTARIANS have described the $250 million Dema Power Project awarded to President Robert Mugabe’s son in-law’s bother, Derrick Chikore, and his associates, as too costly.
Source: Mugabe in-law deal too costly – NewsDay Zimbabwe November 15, 2016
BY STAFF REPORTER
The MPs made the observations while grilling Zimbabwe Energy Regulatory Authority (Zera) boss Gloria Magombo when she appeared before the Portfolio Committee on Mines and Energy, chaired by Zanu PF MP Daniel Shumba, to explain why her organisation approved the deal that gobbles “too much fuel” and causes Zimbabweans to be charged higher tariffs of $15,45 cents per kilowatt hour (kWh) when importing electricity from neighbouring countries is cheaper.
The legislators questioned Zera on why the Dema project was being allowed to import 25 million litres of fuel duty-free when they were only supplying 100 megawatts, raising suspicion that the other half of the fuel, 12,5 million litres, could be finding its way to the black market. “As a regulator, why do you allow Zimbabweans to pay an electricity tariff of $15,45, which has been buttressed by duty-free concessions, as opposed to importing at lower rates? Zambia buys its emergency energy from a ship in Dar es Salaam, Tanzania, at 7 cents per kilowatt and our industry cannot afford to pay 15 cents per kilowatt,” Shumba said.
“Your job, as a regulator, is to ensure you deliver products to the market at the best least rates. This is unacceptable because manufacturers will produce nothing.”
In her response, Magombo disputed that the Dema plant was importing 25 million litres of fuel.
“The 25 million litres duty-free fuel per month for Dema was for the 200 megawatts, but they are currently importing 12,5 million litres because they are only generating 100 megawatts,” she said.
But the committee would have none of it, saying the government was favouring the Dema project to the extent of failing to monitor its implementation and this had led to government incurring a $700 million debt to Sakunda and Agrekko.
Chikore, whose younger brother Simba is married to Mugabe’s only daughter Bona, is allegedly linked to Aggrecko and he has allegedly partnered with Kudakwashe Tagwirei of Sakunda to run the Dema diesel power project for Zimbabwe Power Company.
The project runs on 220 generators to produce 100 megawatts, which feed into the national grid. Later on, Sakunda chief operations officer Mberikwazvo Chitambo appeared before the committee, but could not give much evidence, as he came unprepared.
Zimbabwe currently imports electricity from Mozambique at lower tariffs of $5,66/kWh, South Africa at $13,22/kWh and Zambia at $8/kWh, while electricity tariffs from Dema are $15,45/kWh.