ZESCO ignored a court injunction barring it from awarding the construction of the 750Mega Watts Kafue Gorge Lower Power Station construction project to Sino Hydro Company and now acting managing director Victor Mundende faces prison for contempt of court.
High Court Judge Flavia Chishimba who awarded the injunction has authorized proceedings that may commit Mr. Mudende to Prison for contempt of court.
Papers before the court showed that four days before the signing ceremony, Judge Chishimba had granted China State Construction Engineering Corporation Limited authority, one of the aggrieved companies, an exparte injunction stopping Zesco from making the award.
The injunction had specifically barred Zambia Public Procurement Authority (ZPPA) and ZESCO, as first and second respondents respectively, from awarding the power station construction contract to Sinohydro which was the highest bidder.
“The order specifically prohibited the 2nd respondent (ZESCO) from taking any action furthering the awarding of the contract to Sino Hydro Corporation Limited or any other bidder until final determination of pending arbitral proceedings or until further order of the court.
The order, according to court documents, was served on Zesco via the office of the acting managing director Victor Mulenga Mundende, on October 16, the same day that it was issued.
The company has alleged that there were too many anomalies in the manner ZESCO selected Sino Hydro to undertake the project with a very high bidding price of US$ 2 billion, recording a difference of US$800million with other bidders.
China State Construction Engineering Corporation national manager Wang Zhen said in their submissions that among the irregularities identified in the process included the company’s prior participation by way of having issued the Final Feasibility Report in respect of the project, but was still shortlisted in prequalified bidders of the Tender.
Mr Wang explained that it was indeed clear that Sino Hydro had prior engagements with the power utility company and the MD on previous programmes of expansion through a Public Private Partnership (PPP) together with other companies, but which could have influenced the decision in the tendering process.
Sino Hydro was among the highest bidders of several companies that tendered for the construction of the 750 MW Kafue Gorge hydropower station at a US$2 billion bid compared to some lower bids of more than US$800 million lower.