ZESCO managing director Victor Mundende is now a free man after China States Construction Engineering Corporation Limited yesterday withdrew the matter in which the Chunese company dragged Zambia Public Procurement Authority (ZPPA) and Zesco Limited to court over the US$2 billion 750 megawatts Kafue Gorge Lower power station contract awarded to Sino Hydro International Corporation.
The Lusaka High Court also withdrew the application to commit Zesco managing director Victor Mundende to prison for contempt of court.
The tender, which had attracted 10 Chinese and one Italian company before shortlisting five – namely Sino Hydro, China States Construction Engineering Corporation (CSCEC), China Gezhouba Group Company Limited International (CGGC), China International Water and Electric Corporation (CWE) of China and Salini Impregilo SPA under TATA Project Limited of Italy – attracted controversy as the highest bidder was awarded the contract.
In this contract in which Zesco awarded Sino Hydro, Zambia will pay US$800 million more compared to what they would have paid the lowest bidder China Gezhouba Group Company (CGGC) whose bid was US$1.08 billion while the second highest bidder, China State Construction Engineering Corporation Limited was at US$1.36 billion. According to the consent order filed on Monday 2nd November, 2015 before Lusaka High Court Judge Flavia Chishimba, CSCEC was seeking for an interim measure of protection pursuant to section 11 of the Arbitration Act number 19 of 2000.
The Chinese company entered the consent order for leave to discontinue the suit pursuant to Order 17 rule 1 of the High Court Rule chapter 27 of the laws of Zambia as read with practice directions number 10 of 1968.
The order stated that the Chinese company and all concerned parties had agreed to discontinue the matter.
“Upon hearing counsel and by consent of all the parties hereto, it is hereby ordered and directed that the applicant (CSCEC) be and is hereby granted leave to discontinue the suit herein and accordingly that the suit be wholly discontinued upon the following terms;
The applicant’s action for an order of interim injunction in the originating summons filed into court on the 15th October, 2015 be and is and thereby discontinued and that consequently the ex-parte order of interim injunction handed down by this court on 16th October, 2015 be and is hereby discharged.
The order also stated that no order as to damages upon the discharge or leave to discharge the ex-parte order of interim injunction is made by the court and as such no damages shall be payable by the applicant to the respondents or either of them in respect of the said interim injunction or otherwise.
The order also stated that the pending application for an order to commit Victor Mundende to prison for contempt be withdrawn and that none of the parties shall have any claim against the other in respect of the subject matter of the action.
“Each party shall bear its own costs incidental to the action and the preparation and filing of the consent order and the accompanying summons,” the order stated.