THE US$200 million Gwanda solar project has all but
collapsed as controversial businessman Wicknell Chivayo has expressed fears
that the fraud and corruption charges levelled against him by the Zimbabwe
Power Company (ZPC) will deter potential project funders including China Exim
Bank, resulting in the termination of funding negotiations.
Chivayo's company Intratrek (Pvt) Ltd and ZPC signed an
Engineering, Procurement and Construction (EPC) contract for the 100-megawatt
solar project in October 2015.
Letters between Intratrek and ZPC reveal that Chivayo
believes ZPC had breached the contract between the two parties by calling in
investigators.
Intratrek was paid US$2 million to carry out a feasibility
study and US$5 million for site establishment works, ground clearance and
construction access roads at the project site, despite not having a bank
guarantee.
Nothing meaningful has been done at the site.
In a letter dated January 15, 2018 to ZPC acting managing
director, Joshua Chirikutsi, Chivayo argued that the parties should solve the
dispute before the matter is referred to the Dispute Adjudication Board.
"As a direct consequence to the employer's ill-advised
and duplicitous conduct, Zacc has instituted a misled criminal investigation
into the affairs of the contractor. These investigations have only served to be
an antagonistic and hostile factor to the conclusions of negotiations on
funding the EPC contract with institutions such as CBZ bank. Zacc has since
served CBZ with a warrant of search and seizure empowering the investigating
officials the authority to among other things, inspect the contractor's bank
statements and enquire on information pertaining to the operation of the
account," Chivayo highlighted.
"The net effect has not only been that of a breach of
the EPC contract with regards confidentiality and non-disclosure by the
employer, but more detrimental in that the EPC funders are likely poised to
suspend and or terminate all funding negotiations with regards the EPC
contract, much to the negation of commendable steps taken by the contractor
towards achieving financial closure."
Chivayo said: "In the spirit of achieving financial
closure in the most expedient of time, we also engaged CBZ to issue bonds as a
mechanism of funding the project."
He highlighted that the company was among other actions
". . . expediting the issue of the loan application letter to China Exim
Bank, as well as arrange various meetings with China Exim Bank and Sinosure
Shangai branch which resulted in term sheets being issued."
Chivayo in the letter said he wants the matter to be
settled according to the EPC contract which he said ZPC had violated when they
filed fraud charges against him in December 2017.
He accuses ZPC of violating provisions of the EPC contract
to evade liability from a government probe.
"In the process of doing so the employer has callously
demonstrated its disregard of the principle of sanctity and privity of contact
which the EPC contract is fully subject to," Chivayo said.
He accuses ZPC of disclosing and volunteering
"unsolicited" confidential information to the Zimbabwe
Anti-Corruption Commission (Zacc) and financial institutions who are key in the
funding of the EPC contract, prejudicing his company.
"Equally damaging has been the employer's negligent
leakage of the confidential information into the public domain in a manner
calculated at inviting undeserved censure and condemnation of the contractor
and its managing director as a fraudulent, corrupt and duplicitous organisation
bent on unduly benefitting from state funds," Chivayo said.
Citing various clauses, he said the conduct of ZPC amounts
to a gross violation and a material breach of the peremptory.
According to Chivayo, the repudiation of the terms of the
contract demonstrates the lack of any intention for ZPC to remain bound by the
terms of the EPC contract.
In defence of the funds paid to him, Chivayo said the
contract states that prior to the commencement of the EPC contract, the
employer and the contractor may, subject to availability of funds agree to
undertake all or part of the initial activities following the contract's
effective date.
"Of the pre-commencement works the contractor was
contractually obliged to obtain, establish or conclude the following as the
case may be: obtain a feasibility study in the manner outlined in the schedule
11 and at a total cost of
US$2 117 960 . . . carry out site establishment works,
ground clearance and construct access roads at the project site in the manner
outlined in the schedule 11 and at a total cost of US$5 111 224.
He said the feasibility study was carried out consequently
and in compliance with the provisions of the contract and was dutifully
certified by ZPC's executive management.
In the letter, Chivayo goes on to explain that site
establishment works were carried out and ZPC paid the sub-contractors directly.
He said the works include ground clearance, fencing,
signage, as well as construction of temporary housing and ablution facilities.
The works, according to Chivayo, were to be completed on or
before December 31 2017, but the timeframe for the implementation was delayed
and hindered as a result of ZPC's "unwarranted and uncontractual"
institution of "speculative and fictitious" criminal charges against
him.
"As a direct result therefore, the subcontractor's
limbo and anxiety with regards the credibility, veracity and ultimate outcome
of matter stalled progress on site and the due date for completion became
impracticable," he said.
"Further the employer has inordinately delayed in
effect the payments due for the works carried out by the sub-contractors, thus
further delaying the completion of the works within the contractual
timeframe."
Chivayo said Intratrek requested an extension of the period
of the site establishment activities.
He said he does not understand why ZPC filed fraud and
corruption charges when it had signed an amendment to extend the period of
pre-commencement works and conditions precedent to commencement.
Chivayo argued he did not misrepresent any facts to ZPC as
alluded to in the allegations being investigated by Zacc, given the obligations
of each party to the other were governed by the terms of the EPC contract. He
also argued that ZPC had a contractual obligation to refuse processing any
payment without satisfaction of the relevant conditions and in the case demand
advance payment guarantee.
"It goes without saying that this matter which has
cunningly found its way before the criminal justice system is, in fact, a civil
dispute, which must be resolved through the manner provided for in the EPC
contract," Chivayo said.
In a telephone interview this week, he said despite many
meetings being held "the EPC issue has not been resolved as yet but we are
in the process of negotiating".
Appearing before the mines and energy parliamentary portfolio
committee this week, ZPC board confirmed Chivayo was paid US$7 million before
the parastatal had secured land for the project.
Energy minister Simon Khaya Moyo last month said government
had ordered a forensic audit to look into the administrative, labour and
financial matters. The probe will also look at energy deals entered into by
ZPC. Zimbabwe Independent
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