Zimbabwe Power Company (ZPC) has cancelled the US$133 million tender for the repowering of Munyati Power Station awarded to an Indian company, Jaguar Overseas, after the firm failed to secure funding for the project, four years after winning the bid.
The Procurement Regulatory Authority of Zimbabwe (PRAZ) has since granted ZPC the nod to approach the next bidder in line with the Public Procurement and Disposal of Public Assets (PPDAP) Act.
Jaguar Overseas was in 2015 awarded the tender to re-power the plant, a project which entailed replacing 15 boilers with modern technology, refurbishing 2×50 megawatt steam turbines, overhauling cooling towers, water treatment plant, civil works, dredging and rehabilitating a weir on Munyati River for water supplies to the thermal plant. However, the firm has failed to secure funding to rehabilitate the power plant.
It emerged that the Indian firm has only managed to raise only 15 percent of the required funding. ZPC acting managing director Engineer Robson Chikuri on March 11 this year wrote to PRAZ chief executive Mr Nyasha Chizu seeking authority to complete the tender using the PPDAP Act.
"ZPC has failed to enter into a procurement contract with the winning bidder Jaguar Overseas," Eng Chikuri said.
"A due diligence by ZPC on Jaguar Overseas Limited noted that whereas Jaguar Overseas Limited indicated that they had secured 100 percent funding for the project only 15 percent of the funding could be confirmed by their funders. Application of the PPDPA will enable ZPC to conclude the tender process in line with Section 103 (repeal of CAP. 22.14 and savings and transitional provisions)."
Responding to the application, Mr Chizu said: "In terms of Section 103 (4) of the Public Procurement and Disposal of Public Assets (Cap 22: 23) the authority observed that Jaguar Overseas Limited failed to come up with the 100 percent funding as required on the project and as such the accounting officer has proposed to approach the next compliant bidder in line with Section 55 (3) of the same Act."
He added: "The accounting officer must ensure that application of Section 55 (3) of the Act is applied on valid bids only. The accounting officer must therefore submit the procurement record review by SPOC in terms of Section 54 of the PPDPA Act as read with Section 332 of the PPDPA regulations (S.I 5 of 2018)."
Zimbabwe has power shortages with generation averaging 1 300MW against national peak period demand of 2 200MW. This has seen the country spending millions of dollars importing electricity from South Africa and Mozambique.
President Mnangagwa's administration is implementing a number of power projects countrywide for Zimbabwe to attain electricity self-sufficiency. On the cards is the construction of the $5,2 billion Batoka Gorge Hydro Power Plant which will see Zimbabwe and Zambia sharing 2 400 megawatts equally.