13 September 2014, Bulawayo — Zimbabwe has cancelled tenders for the construction of multi-million-dollar solar energy plants, a setback to efforts to ease the country’s energy shortages.
The decision, announced by the State Procurement Board (SBP), a state entity tasked with vetting contracts for national projects, reversed plans to use off-grid and renewable energy as a way to deal with power shortages that have stalked the country for more than a decade.
Early this year, the government announced the awarding of tenders to three companies to construct solar power plants, expected to generate 300MW of electricity. The country’s current daily energy production is 1,200MW.
Initially, tenders for 100MW of power generating capacity were invited, and a $184 million contract awarded to China Jiangxi Corporation.
However, the Zimbabwe Power Company (ZPC), a state-owned parastatal, later intervened and said 300 MW of capacity should be bid to meet the country’s energy needs.
The two losing bidders were then invited to construct the remaining 200 MW of needed capacity, even though their initial bids had been much higher, according to the State Procurement Board.
Intratek, a local firm which partnered with Chinese investors, had submitted a tender for $248 million to build 100 MW of power, while another consortium of local business people bid $358 million to build 100 MW of capacity, energy ministry officials said.
The State Procurement Board, however, said in late August it was recalling the contracts after China Jiangxi Corporation attempted to inflate the cost of its bid to over $200 million, a move the board said was illegal.
China Jianxi Corporation representatives told procurement board officials that the decision to revisit the initial cost was made necessary by factoring in customs duty, as equipment was to be brought in from China.
The procurement board had instructed Intrakek and ZTE Corporation, the two initial failed bidders, to revise their tenders to match China Jianxi’s bid – something they did not do, according to the State Procurement Board.
Cledwyn Nyanhete, the State Procurement Board principal officer, said the tenders were cancelled because of failure to maintain the original tender price.
“China Jiangxi Corporation violated the Procurement Act by misrepresenting a material fact in a tender process,” Nyanhete said.
An official of China Jianxi Corporation told Thomson Reuters Foundation by telephone that “there are reasons why we revisited our initial budget” before switching off his phone.
A representative from Intraket said they would await further instruction from their lawyers on their next move.
Gilbert Mwanawashe, an engineer at the energy and power development ministry’s solar energy unit, said because solar projects have relatively high installation costs, it may take a while before local firms are able to source enough resources to implement the projects without foreign assistance.
“The controversy surrounding the tender awards points to companies agreeing to underwrite these projects when in fact they lack capacity,” he said in a telephone interview.
Construction of the three power plants had been scheduled to be finished by end of 2015.
In a search for new energy sources, Zimbabwe has already awarded tenders for methane exploration in Lupane, in the southwest of the country. The project has yet to start.
*Madalitso Mwando & Laurie Goering – Reuters