There are four major reasons why the Dema Diesel power plant project awarded to Sakunda Holdings, a major fuel supplier, is bad for Zimbabwe, according to the People’s Democratic Party (PDP).
It is unnecessary, unmanageable, too expensive and was meant to benefit only people close to President Robert Mugabe and the ruling Zanu PF, said PDP in a statement on Tuesday.
“The $250 million Dema Diesel Power Plant, which was awarded to Robert Mugabe’s family under unclear and controversial circumstances, is expensive and unsustainable for the Zimbabwe Electricity Supply Authority (ZESA) to manage,” said Jacob Mafume, the PDP national spokesperson.
He said the power plants that have existed before the Dema project were sufficient to provide the 1,000 megawatts of power needed for industrial and domestic consumption.
“Due to the downturn of the country’s economy and industries, Zimbabwe needs 1000 megawatts. This means that power supplies from the Kariba and Hwange power stations are enough for domestic and industrial use.
“It was, therefore, unnecessary and costly for both the cash strapped Zanu PF government and ZESA to engage Sakunda Holdings to provide energy through the Dema power plant,” said Mafume.
He said the project was further tainted by high level nepotism and favouritism.
Sakunda is owned KudaTagwirei who is linked to Zanu PF and went into partnership with Mugabe’s in-law, Derrick Chikore.
Chikore’s brother, Simba, is married to Mugabe’s daughter, Bona and Sakunda was awarded the contract without going to tender.
“It is clear that ZESA was forced to allow the Mugabe family to join the feeding trough and Zanu PF’s gravy train by running the Dema power plant. Construction of the plant was supervised by officials from the Office of the President and Cabinet,” said Mafume.
The Dema power tarrifs have been inflated steeply to benefit those who run it, he added.
Electricity generated at Demacosts $15, 45c per kilowatt hour (kWh) while at Kariba it is $4, 11c/kWh and $6, 97c/kWh at Hwange.
“ZESA even imports electricity at even cheaper prices from Mozambique, Zambia and South Africa than what Sakunda is charging it. The Dema project is therefore standing on shaky ground.
“The government also chose to opt for the use of diesel power generators instead of cheaper liquid petroleum gas. APR Energy Holdings, the company which was awarded the tender before it was sidelined for Sakunda, informed ZESA that it would save $200 million in three years if it used the liquid petroleum gas.
“Evidence shows thatZESA’s deals have been inflated by over $500 million and senior ZESAand government officials have benefited from these high level corruption deals,” said Mafume.
ZESA could be forced to buy more power from Dema because it is now saddled with a $1 billion debt that is likely to compromise its capacity to import cheaper electricity.
Depending on Sakunda will, in turn, make power more expensive for struggling Zimbabweans.
“With the electricity generated from the Dema project expensive, it is sad to note that the ordinary consumer will be expected to foot the bill on behalf of the Mugabe dynasty,” said Mafume.
He added: “As the People’s Democratic Party (PDP) we are concerned that Mugabe’s has chosen the sacrifice the poor taxpayer in order to support his family and Zanu PF cronies who are now living large at the expense of the poor