via Tongaat spurns govt’s $30m loan request – NewsDay Zimbabwe March 12, 2015
MASVINGO — Sugar-producing concern Tongaat Hullet has reportedly spurned government’s request for a $30 million loan facility for completion of the Tokwe-Mukosi Dam in Chivi after the two parties failed to agree on terms of the deal.
Finance minister Patrick Chinamasa last month toured the dam site where construction has stalled and held meetings with Tongaat Hullet officials in a bid to strike a loan-for-water rights deal.
Work at the dam, which is about 80% complete, stalled last year as government owes the Italian contractor, Salini Impregilio, over $80 million for work already done, while another $30 million was needed to complete the project.
Government had proposed that Tongaat Hullet would finance the completion of the dam, set to be the country’s largest inland water reservoir, in exchange for water rights for a certain period of time.
But sources close to the deal said the two parties failed to agree on the pricing of the water as well as the period during which the sugar producer would hold on to the water rights for the dam.
“The deal reached a dead end because government negotiators as well as those from Tongaat failed to agree on the price of the water and the timeframe where Tongaat will be holding on to the water rights. Government wanted a shorter period, while Tongaat wanted a longer period, meaning they were going to have a monopoly on the water from the dam,” the source said.
However, both parties have remained tight-lipped on the issue.
Tongaat Hullet’s corporate communications officer Adelide Chikunguru-Musvovi refused to comment on the issue, referring all questions to Chinamasa.
Chinamasa simply terminated calls when NewsDay called him for comment.
COMMENTS