via No power, no investors says Eddie Cross 28 November 2013 by Charles Rukuni InsiderZim
A senior Movement for Democratic Change official and Bulawayo legislator Eddie Cross says Zimbabwe cannot expect any substantial new investment until it is able to guarantee power to those investors.
He told Parliament on Tuesday that Zimbabwe’s economy was not going anywhere until the country resolved the issue of reliable power supply at the lowest possible cost.
“We cannot expect any substantial new investment in Zimbabwe until we are able to guarantee those investors power. Therefore, this issue is of critical importance to us as a nation and should be debated properly and clearly,” he said.
Cross said there were plenty of investors willing to support power generation in Zimbabwe but they were scared of the country’s indigenisation laws.
“There is no investor in the world that is going to put a dollar on the table and have fifty-one cents taken by ZANU PF,” he said.
Below is his full contribution:
MR. CROSS: Thank you Mr. Speaker. I feel that I should in fact make a short statement today on the question of electricity supplies in Zimbabwe because there is a lot of confusion and it is not assisted by this kind of debate.
The power generation facilities in Zimbabwe were built in stages; the small thermal power stations were built prior to 1938. Kariba was completed in 1958 and Hwange was built under United Nations Mandatory Compulsory Universal Sanctions between 1968-1970.
I mention the latter because I was a young man during those days. I participated in the construction of Kariba. Kariba at its time was the largest infrastructure development in the world financed by the World Bank.
Hwange was financed by the Rhodesian Government and the equipment was imported to Rhodesia under United Nations sanctions. I simply cannot understand why our associates on the other side of the House, should claim today that sanctions should be causing, in any way, the kind of crisis we are experiencing today. It is not true.
There are absolutely no restrictions whatsoever on the importation of spares of any kind to deal with any form of electricity generation infrastructure in Zimbabwe today. The power generation capacity of Zimbabwe is about 1200 MW today. It fluctuates a little bit based on the facilities at Hwange, but by and large, I think one of the greatest achievements of the past four years has been to stabilise the two major power stations in the country.
I am pleased to announce today that the contractors have moved on site at Kariba South. This is a major step forward. It is a contract negotiated by the former Minister of Energy and I think it is a good contract. It will be funded by the people constructing the facility and I hope that within three years, Kariba will be able to generate something like 900 MW for us as a nation.
It will not be creating any additional sources of supply because we do not have sufficient water in Kariba but will enable us to fluctuate the production from Kariba to meet our peaks in demand. This is a very important function.
Hwange, I am afraid Mr. Speaker, has been inexplicably delayed. It is in fact the only major new generation source of power to Zimbabwe today. It is capable of being financed today, without any problems at all.
It is a mystery to me as to why this particular contract, like Kariba South has not been awarded. I do not know what the hold-up is today but I would hope that the minister would be more transparent in the way he is handling this business and inform the House when he has the time, as to why this important contract has been delayed.
For the rest, Rhodesia always could depend on surpluses in other parts of Southern Africa for its shortfall in supplies. Therefore, no expansion in the production of electricity in Zimbabwe has been completed in the last 40 years, 34 of which have been under ZANU PF management.
More importantly, during this period, there has been absolutely no maintenance and no reconstruction of these important facilities. Now that the region itself, particularly South Africa, is moving into a deficit position in so far as their own requirements are concerned; these countries are no longer able to supply us on and when required, hence the load shedding.
As far as the future is concerned, Mr. Speaker, the Sengwa project has been on the books for some time, promoted by a major international company based in London, Rio Tinto. There is no question of any kind of restrictions on Rio Tinto regarding this investment. Rio Tinto is not proceeding with this investment simply because of the risk profile of Zimbabwe.
Part of that risk profile is indigenisation. There is no investor in the world that is going to put a dollar on the table and have fifty-one cents taken by ZANU PF. For that reason, Sengwa has not proceeded.
The same applies to Binga. There is another thermal station being planned in Binga. Plans for the thermal station are being funded by the French.
Again, there is no question of any restrictions on the financiers of this; it is the risk profile of Zimbabwe that is impeding these investments.
As far as gas is concerned in Lupane, I think most people now know that the gas in Lupane is not a reliable source of energy. It is unlikely to be developed on any significant scale. Therefore we have to ask, what are the immediate prospects for new energy sources for Zimbabwe?
I want to highlight the new role of Mozambique. Mozambique first found gas just about 150 km South of Beira about 20 years ago. That gas is being delivered to Gauteng today using a pipeline constructed by SASOL.
Recently, Mozambique has discovered major gas in the North near the Tanzanian border. This new discovery Mr. Speaker Sir, is going to turn Mozambique into one of the largest energy suppliers in the world.
These gas reserves are similar to those of Doha in the Middle East. It is going to transform the Mozambican economy. Already, more than US$100 billion has been committed to investment in the Mozambique gas fields.
The other development of concern to us is that just in the last two months, a gas field was discovered just off Beira, about 10 km from Beira port on the other side of the river. This gas field has 4 trillion cubic feet of gas which is bigger than the fields in the south supplying Gauteng. I am reliably informed that using this gas, which is only 183 km from Mutare, we can construct a 2 000 MW power station in Mutare within three years.
Contrary to what my colleagues on the other side of the House are saying, the Indian private sector is prepared to invest in that facility. The issue we have got to look at here is that this is a critical subject for every Zimbabwean; to try and make cheap political points about the so-called sanctions on this kind of issue is simply not doing it justice.
We need to debate this issue. We need to have clarity on it, the future of our economy –[MR NDUNA: Inaudible interjections]- you are quite right. Mr. Speaker Sir, my colleague is debating with me here.
MR. SPEAKER: Order, order, order. Please address the Chair.
Hon Nduna, please avoid direct verbal attack – [MR NDUNA: He is saying there are no sanctions.]- Order. May the hon. member continue please?
MR. CROSS: Thank you Mr. Speaker Sir. I just want to make a point that, until we resolve the question of a reliable power supply for Zimbabwe at the lowest possible cost, our economy is not going anywhere.
We cannot expect any substantial new investment in Zimbabwe until we are able to guarantee those investors power. Therefore, this issue is of critical importance to us as a nation and should be debated properly and clearly.
Thank you very much Mr. Speaker.