'Kariba power expansion project cost inflated,' says Biti

MDC Renewal Team leader Tendai Biti yesterday attacked the Zanu-PF government for deliberately inflating the cost of the Kariba South hydro-electric expansion project by nearly 60% and described the move as criminal and a means by corrupt politicians to enrich themselves.

Biti's comments came barely a week after President Robert Mugabe flew back from a week long State visit to China where he signed a number of project financings from the Asian giant.

The original Kariba South expansion project signed and sealed during the inclusive government had pegged the contract cost at $355 million, but the figure has ballooned to $533 million.

Zimbabwe Power Company is expected to borrow the difference of $213 million to complete the project.

Meanwhile, The Herald reports that the Kariba South extension project has the capacity to service its own loan and such a model will be used on future energy projects.

The implementation of the Kariba South extension project is expected to cost a total of $533 million, $320 million of which is an extended loan from the Chinese government while the balance is being provided by the Zimbabwe Power Company borrowing from development finance institutions.

Finance Minister Patrick Chinamasa said the electricity receipts generated from the Kariba South will go exclusively towards repaying the loans.

He said the Kariba South project has capacity to fund itself and to make it attractive have agreed a payment plan.

When the project is completed and the electricity is sold into the national grid, the electricity receipts are then deposited into a special account in the name of that SPV to service the loan.

He added that a similar model would be used for Hwange 7 and 8 project.