Friday, 20 July 2018

CHIVAYO TO GET $140M AS GOVT PRESSURES ZESA


PRESIDENT Emmerson Mnangagwa’s administration — in many ways carrying over from where toppled former president Robert Mugabe’s regime left — has given the green light for Wicknell Chivayo to access a whopping US$140 million to complete implementation of the stalled Gwanda Solar Power Project, the Zimbabwe Independent has established.

This comes after Chivayo, a dodgy businessman, on behalf of his company Intratrek, wrote to Mnangagwa seeking his intervention to compel the Zimbabwe Power Company (ZPC) to facilitate the release of funds. Chivayo claimed ZPC had previously turned a deaf ear to his repeated pleas.

In a letter to Mnangagwa, copied to Finance minister Patrick Chinamasa and Energy minister Simon Khaya Moyo, dated June 25 2018, Chivayo starts by singing the praises of the Zimbabwean leader before delving into the subject matter.

“Under the conditions created by your dynamic administration, industry and business can only but thrive as well as take Zimbabwe to its rightful position as the Jewel of Africa. Your Excellency, we are privileged to have witnessed you embark on this irreversible journey and we wish to be your companions on this epic adventure,” reads the letter.

“Your excellency, the correct position, to allay fears and rising speculation on Intratrek/CHiNT’s capacity to implement the project, CHiNT advised ZPC on 20 April 2018 that China Exim Bank is ready and willing to issue an internationally backed advance payment bank guarantee to cover an aggregate of US$51 854 579,28 (30% of the contract value) and requested for relevant banking details in order to process the bank guarantee. This overture has been met with a deafening silence from ZPC as have many progressive advances that we have made towards resolving this.

“It may be of particular importance to note that the contract value largely consists of the imports from the Chinese technical partner. Intratrek is only entitled to a small commission out of the contract value in keeping with the fair profit envisaged in ZPC’s request for proposals during the bidding of the solar tender.”

Chivayo also accused ZPC of frustrating alternative means of funding the project when China had blocked funds for all projects in Zimbabwe because of a US$60 million debt owed to the China Export and Credit Insurance Corporation (Sinosure), a state-funded entity which provides export credit. Sinosure can only disburse funds to companies with the clearance of the host country.

The debt was, however, cancelled during Mnangagwa’s state visit to the Asian nation in April this year, opening the way to new funding.

Chivayo’s letter adds: “Intratrek has frequently engaged ZPC with a view to resolve the Sinosure matter. Intratrek proposed a funding alternative to ZPC through raising local infrastructure bonds by CBZ to fund the project. CBZ expressed willingness to float the bonds to insurance firms and pension funds to raise the required funding of the project. This proposal was recommended by the Minister of Finance and Economic Development on 05 April 2017. Further, the minister specifically directed ZPC to implement this funding proposal immediately. Notwithstanding Intratrek’s proposal and the minister’s strong recommendation, ZPC contemptuously refused to implement the proposed option.”

Chivayo also accused ZPC of stalling Intratrek’s strategy to finalise the project, which included a downward review of the contract price by 20%.

“This has further delayed the satisfaction of the conditions precedent on the financial closure. Since April 2017, the ball has remained in the ZPC court to either wait for the clearance of the Sinosure premiums debt or embrace incentives offered by Intratrek/CHiNT,” he says.

ZPC had rejected Intratrek’s proposal to implement the project, spanning over 85 hectares of land in the perennially sunbaked district, in four phases of 25 hectares, he said.

“Had the funding been readily available through ZPC, Intratrek/CHiNT would only require 6-8 months to implement the contract and feed clean energy into the national grid.

Intratrek/CHiNT’s grievances have since been escalated to the minister of Energy and Power Development and ZPC was called upon to respond to the issues raised. ZPC has, however, remained defiant, neglecting to make any representations on the reasons why it has taken them long to consider these alternatives. Our further escalation to your office is in dire need and last resort for a voice of authority to bring ZPC to account for the delays which have negated the spirit behind the solar project,” the letter says.

“The writer will also be most indulged if your office favours us with an opportunity to hold a meeting with you in order to fully deliberate on any matter raised herein whose clarity may remain cast in ambiguity.”

Chivayo this week confirmed sending the letter, but would not reveal details.

“Gone are the days of discussing business in the media. It is unprofessional and the best person to comment is the source of that story,” he said.

Asked for a comment, Khaya Moyo said he was not aware of the developments as he has been away busy on the campaign trail.

“I am not aware of what has specifically transpired in the past three weeks because I have been away campaigning in my constituency and I just returned today (Wednesday). As you know, we are in the middle of campaigns. I have been campaigning heavily, so, frankly speaking, I haven’t been able to look into my tray to see what’s there. I am also running the information ministry, so there is quite a lot on my table,” he said.

ZPC acting managing director Patrick Chivaura said they were currently finalising issues with Intratrek, although he could not shed more light on the issue.

“What I can say at the moment is that we are finalising some issues with Intratrek before work can resume. Unfortunately, I am not at liberty to disclose the nature of those issues because talks are still in progress and they largely involve the parent ministry,” he said.

Ministry of Energy permanent secretary Patson Mbiriri said: “Sorry, I am about to take off in a plane; I cannot talk to you right now.”

Chief Secretary to the President and Cabinet Misheck Sibanda also said he could not comment as he was attending a funeral in the rural areas.

Efforts to get comment from presidential spokesperson George Charamba were fruitless.

Chinamasa could not be reached for comment. Zesa spokesperson Fullard Gwasira demanded written questions.

However, senior government officials told the Independent Mnangagwa has given permission for Chivayo to access the money.

Construction of the solar power plant was initially quoted at US$172 million, but the price was later revised down to US$132 million due to the global reduction in the cost of constructing solar energy plants. Under the deal, Intratrek would be paid US$52 million in the immediate term by CHiNT, as an advance guarantee payment for the 100-megawatt plant.

A profligate spender, Chivayo had initially controversially accessed a US$5 million payment upfront, which he reportedly squandered on his luxurious lifestyle. Zimbabwe Independent

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