Harare in US$3bn water deal

via Harare in US$3bn water deal | The Herald August 4, 2014

Harare City Council is working on a US$3 billion loan facility with a Singaporean company, Neoparagon, for the construction of three dams which should ease water shortages in the city. The dams are Kunzvi, Musami and Muda.

Harare deputy mayor Mr Thomas Muzuva revealed to a full council meeting last week that they were finalising the deal with the Asian company.

Mr Muzuva disclosed this when councillors were discussing the setting up of a Harare Water Utility board to run the affairs of the city’s water department.

Meanwhile, the Ministry of Environment, Water and Climate says it is not aware of the impending deal but would need to be involved if it is to come into effect. Mr Muzuva said the deal, approved by a caretaker council committee that was in charge of the affairs of the city prior to last year’s harmonised poll, was 90 percent complete.

“According to the unsigned negotiations, a Singapore firm, Neoparagon, is bringing in US$2,9 billion to construct Kunzvi, Musami and Muda under a 30-year partnership.
“The firm Neoparagon will take 70 percent profits while the City of Harare gets 30 percent for 30 years. After 30 years, the city will be operating alone,” said the Deputy Mayor in explaining the build, operate and transfer arrangement.

He however said council needs to scrutinise the deal before signing as it seemed skewed in favour of the Asians and could result in the privatisation of water, which residents could not afford.

Already council has been forced to shelve plans to install pre-paid water meters after facing stiff resistance from residents who feel this would put the cost of water beyond reach of the poor, thereby taking away a key basic human right.

Mr Muzuva said there was need for due diligence and that this could only come with full disclosure on the part of the administration.

“There is need for us to be enlightened on this issue. It was done a month before we took over. We need to be furnished with all the necessary information so that we deliberate on it,” said Muzuva.

The deputy mayor concurred with advice given to Mayor Bernard Manyenyeni by Local Government minister Ignatius Chombo that the project be overseen by a group made up of all stakeholders and not only City of Harare councillors and employees.

“The minister was somehow correct in him advising to wait for the appointment of directors because if we handle it as a council, some stakeholders will not be present,” he said, adding that the decision on the deal must include input from Greater Harare, which incorporates Norton, Chitungwiza and Ruwa as well as Neoparagon, the partners.

According to Mr Muzuva, Dr Chombo reportedly advised that water was a national issue which should involve the relevant ministry which has a greater interest in water.
Deputy Minister of Environment, Water and Climate Engineer Simon Musanhu told The Herald that the City of Harare needed to work all stakeholders for the sake of progress.

“The ministry is aware that several parties have been looking for various ways of developing the Kunzvi Dam Water Project. We don’t know how close the City of Harare is to clinching a deal, but they will have to work hand in glove with our ministry for the project to be realised.”

Kunzvi Dam, to be built at the confluence of Nyaguwe and Nora rivers in Goromonzi district, falls in a different catchment area from Chivero, Manyame, Seke and Harava dams that derive their water from Manyame River. Once completed, the dam is expected to ease water problems faced by residents of Harare, Chitungwiza, Ruwa and Norton.

Kunzvi Dam has been on the drawing board from as far back as the 1990s, when the then Department of Water Development put forward plans for the construction of a new reservoir on Nyaguwe River to serve Harare and its satellite towns.

Council minutes indicate that most councillors were of the view that the Harare Water Utility board, which does not involve other stakeholders, be put in place before finalisation of the Singapore deal.

The minutes read in part, “A resolution that the Harare Water Board of Directors be put in place within two weeks after the June Special Council meeting should proceed. It is up to the council to take the advice from the Minister. The minister only has the powers if he puts it in writing.”

Acting Town Clerk Josephine Ncube then indicated that the matter to appoint directors was already under consideration, with a progress report to be submitted to the relevant committee.

“It was council’s view that the Board of Directors would superintend the affairs of the utility to ensure that operations as well as service delivery was to the satisfaction of Harare residents,” read part of the minutes.

She said the water issue in Harare had been given national status given what happening to the $144 million China Exim Bank loan facility for the rehabilitation of Morton Jaffray Water Works.

As previously reported in this paper, the Harare City management used part of the US$144,4 million loan from China for water and sewerage reticulation to buy 25 luxury cars, which included Land Rovers and Range Rovers. The authorities have also come under fire for inflating prices and other unscrupulous procurement procedures which have resulted in millions of dollars being siphoned off from programmes they were earmarked to develop.

The Harare water department has been failing to cope with water demand over the years mainly because the original infrastructure was designed to serve a population of only 300 000. The city’s population has since increased to 2,5 million people without a corresponding expansion of water infrastructure.

The city’s water demand is 1 200 megalitres per day and several suburbs in the city like Mabvuku, Tafara and other nothern areas and the satellite town of Chitungwiza go for long periods with no water.