ZESCO is making a very fundamental mistake by failing to explain the US$2 billion Kafue Lower Gorge hydro-electric generation contract award to Sino Hydro.
This strategy is likely to delay the project and deprive the people of Zambia the relief they seek from load shedding and the crippling power deficit.
The silence is fueling speculation, given that Sino Hydro has a very chequered international history which has included some monumental failures.
In neighboring Botswana, a legislator Samson Moyo Guma, is before the courts of law on bribery and corruption allegations of having received more than US$10 million from Sino Hydro.
The case arises from a sudden and inexplicable inflation of the Kariba South Project commissioned by President Robert Mugabe whose cost rose from US$370 million to $533 million, giving a difference of US$163million which is believed to have gone into the pockets of some government officials.
Mr Guma, a Motswana with Zimbabwean roots, runs a company called IRB Transport, which allegedly provided consultancy services to Sino Hydro for the Kariba South project and for which the large amounts were paid to him in Botswana. Nobody is convinced and that is why he is in court for bribery and corruption. We have today published the story on page 3.
Last year, the World Bank suspended Sino Hydro from participating in the giant Iringa dam in Congo DRC on account of corruption. Project coordinator Peter Bosshart said there were three companies in the running: Sino Hydro and China Three Gorges Corporation from China, a Canadian-Korean consortium, and a third made up primarily of Spanish companies.
Sino Hydro was suspended pending the outcome of a corruption investigation by the bank, according to Mr Bosshart.
It must also be remembered that Sino Hydro was awarded this very same contract in 2011. President Rupiah Banda who was then President presided over the ground-breaking ceremony.
It was reported at the time that President Banda commissioned the construction of the US$2 billion Kafue Gorge Lower hydro-electric power station which would add 750 megawatts of power to the national grid once completed in 2017.
The project, which was expected to create about 300 direct jobs for indigenous Zambians, was being implemented under the public-private partnership made up of Zesco, Sino Hydro Corporation and the China Africa Development Fund.
Mr. Banda said the power station was one of the most important components of his government’s strategy to meet the growing energy demand in the country and the region.
The project was later cancelled.
In the same year, March 2011, Sino Hydro Corp. signed a contract with an Iranian hydro firm Farab to build one of the world’s tallest dams designed to support a 1,500-megawatt power station.
This contract was cancelled.
According to Reuters, the contract was cancelled because Iran’s central bank was “dissatisfied” with financing options offered by China.
With this background, it is clear that concerns about the US$2 billion project awarded with some disconcerting speed are very genuine.
That is why Zesco would have done this country a great favour by explaining exactly how Sino Hydro, from all the 11 contractors who expressed interest, was awarded the contract.
It is quite possible that there was no corruption involved; therefore there is nothing to worry about.