Friday, 10 April 2020

CORONAVIRUS DERAILS CHINESE PROJECTS IN ZIM


IMPLEMENTATION of Chinese projects totalling US$1,4 billion, which had reached a critical phase, has been hampered by the Covid-19 pandemic, which has rattled the global economy and killed about 75 000 people since it was detected in China in January.

The affected projects are being bankrolled through loan facilities secured from China Eximbank and other financial institutions.

Zimbabwe is under a 21-day lockdown that began last at midnight last Sunday. The country has recorded 10 coronavirus cases and one death.

The projects, namely the US$1,1 billion Hwange Thermal Power Station upgrading, US$153 million Robert Mugabe International Airport expansion and the US$100 million New Parliament Building in Mt Hampden, Harare, and the US$70 million NetOne expansion have been slowed by Covid-19, which has plunged the global economy into a tailspin.

Zimbabwe, already battling to resuscitate its collapsing economy, sees some of the Chinese projects — particularly the construction of units 7 and 8 at Hwange, which will add 600 megawatts to the national grid as well the expansion of the Robert Mugabe International Airport — as key in turning around the country’s economic fortunes.

However, officials have revealed the implementation of the projects has been disrupted by the pandemic, with huge construction shipments delayed as the world races to find a solution to contain Covid-19.

Chinese Enterprises in Zimbabwe chairperson Le Hai told the Zimbabwe Independent last week that the projects, as well as other investments by the global economic powerhouse in Zimbabwe had been severely hit by the pandemic, with completion targets hanging in the balance.

“The major projects were affected because the key technicians and engineers couldn’t come to Zimbabwe and the same applies to construction equipment and materials,” Le said.

“But they are trying to employ more local staff and source material locally. It may be delayed a bit, but they are trying by all means to complete on time by working overtime.”

Hai said government was working with the Asian authorities to ensure that the projects would not stop completely, in spite of the business risks posed by the pandemic.

He said: “Coronavirus did have a huge effect on the business of Chinese companies in Zimbabwe due to travel limit and shipping disruption.

“But we have been trying by all means to reduce the loss or delay in the key projects. At the same time, we follow the instructions of the Zimbabwean government and Chinese Embassy to ensure these projects are not completely stopped but working with reduced staff with protective measures in place.”

Under the financing arrangement of the Hwange Power Station refurbishment deal, 60% of the cost would be financed through material shipments from the Asian economic giant, which is now slowly recovering from the effects of the pandemic.

The project, expected to generate 600MW, is being jointly rolled out by China’s state-owned Sino Hydro and the Zimbabwe Power Company (ZPC). The project has created 3 000 jobs.

Tang Zhaolai, the Sino Hydro site manager, told the Independent that a sizeable shipment of construction material had been held up in South Africa and China, as the deadly virus spreads rapidly across the world.

“The delays in delivery has been due to the coronavirus. Two shipments are at sea as we speak. The first one is due to get in South Africa this month, but we are not sure if we will get in time due to the coronavirus,” Tang said.

Last week, Sino Hydro wrote to its staff highlighting that implementation of the project would progress despite the pandemic. Some of the workers are staying on site during the lockdown period.

“To ensure this project can generate electricity for the country as soon as possible, site works should not be stopped thoroughly. Employees are encouraged to go on working at site,” the statement reads.

Full-scale implementation, the statement said, would resume after the 21-day lockdown.Construction of the imposing six-storey New Parliament building perched on a hill in Mt Hampden has also been hit by the pandemic. It is the biggest China Aid-funded project in Africa and is being implemented by Shanghai Construction (SCG) Group.

Cai Li Bo, the SCG project manager, said the company had not received some construction material and staff since early February, slowing down the project.
“At the moment, we have 110 Chinese workers quarantined on our compound and project site in line with the instruction from the government. The Chinese engineers are safe and workers are safe and quarantined. We have asked all local workers to be at home during the 21 days of lockdown,” Cai said.

“Because the of virus, we are a little bit behind schedule. Fortunately, we were ahead of schedule before the outbreak so we remain confident that when everything has settled down, we will be able to finish the project in the 32-month time frame agreed.

“We are also expecting to start receiving material this month, because business has resumed in China. We don’t think there will be problems on the shipment route from Beira to Zimbabwe, so depending on the situation here, we might be able to do more work.”

This is not the first time the three projects have suffered a knock. Last year, Chinese financial institutions threatened to cut funding, after local fiscal and monetary authorities raided US$10 million from an escrow account held under the US$153 million Robert Mugabe International Airport project, resulting in crisis meetings involving Ministry of Finance officials and Chinese Embassy officials.

The project is being implemented by Chinese state enterprise Jiangsu and is envisaged to transform the airport into a modern facility by improving its handling capacity.

The three projects were lined up for Zimbabwe by China’s President Xi Jinping when President Emmerson Mnangagwa visited the Asian country in 2018. Zimbabwe Independent

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