Business / Companies
Work on Hwange power project at 60%
06 Sep 2020 at 08:51hrs | Views
THE Government is working tirelessly to expedite the return of expatriates contracted under its power generation projects most of whom are still locked up in their countries due to the outbreak of Covid-19.
The Government is also struggling to import equipment most of which is sourced in countries that were hard hit by Covid-19 especially China. In an effort to boost power generation the country through Zimbabwe Power Company (ZPC) embarked on the stage 7 and 8 expansion project at cost of US$1.2 billion.
The project is expected to contribute an additional 600MW into the national grid when completed in 2021. Power supplies have over the past weeks been depressed owing to outages at Hwange Power Station as a result of breakdowns being experienced on other existing units. Out of the six units only three are operational churning out a combined 290MW resulting in the load shedding currently taking place in the country.
However, with the outbreak of Covid-19 pandemic work on stage 7 and 8 as well at the existing units stalled. Speaking in an interview at the sidelines of a tour of Hwange Power Station and the expansion project, Energy and Power Development Minister, Soda Zhemu said the Government was working on expediting the return of expatriates.
"What we did from morning was to understand the operations that are being done here at Hwange Power Station and toured the 7 and 8 project. We have taken note that the projects are progressing save for few hitches, which we had as a result of Covid 19 induced lockdowns. Some experts have been demobilised they had to go back to their countries especially China and some efforts are actually underway to have them come back. Yes, there will be some rescheduling in terms of the completion dates all that we have taken note of," said Minister Zhemu.
He said his ministry was also engaging the Finance and Economic Development ministry to resolve the issue of delays in payments were underway.
"Issues to do with funding some arrangements, which were initially done through the China Exim Bank, have to be resuscitated. The Ministry of Finance (and Economic Development) has to do something in order to ensure that payments are expedited and remitted to the banks so that they continue to honour the initial arrangements. We also had a tour of the existing plants where three units are on service and doing 270MW which are actually inadequate considering the power requirements in the country. Yes we have also taken note of the challenges that the power utility is facing in terms of the breakdowns that are there. Units 3 and 6 are not on the grid because of the annual overhaul maintenance, which was supposed to have been done and have since been stalled by Covid-19 since some experts have to be coming from South Africa and Italy work on the units."
Briefing the minister, Stage 7 and 8 Expansion Project site manager Engineer Forbes Chanakira said the project was being affected by Covid-19.
"There is a likelihood that we might fail to meet initial project completion of October 2021 for unit 7 as current delays puts the completion date at February 2022. As a result of the pandemic there have been delays in manufacturing and shipping of equipment which is primarily coming from China. We are also experiencing failure for manpower skills for installation and construction to mobilise to site contractor a requested waiver to allow a total of 324 employees to be mobilised. A total of 187 are expected before the end of September while awaiting approval for the remaining 137," said Eng Chanakira.
He said delays in IPC payments was also contributing to the stalling of the projects.
"We are experiencing delays in IPC payments as a result failure by ZPC to maintain an Escrow Account for foreign payments which is a condition for the disbursement of the loan by China Exim Bank. The outstanding amount is US$122,944.08 as at 3 September 2020. The effects of the delays in payment have been failure to meet project completion date. Project cost increases as a result of penalties for late payment. The interest due to IPCs claims by the contractor is US$4,169 million as of 3 September 2020. The contractor has notified ZPC on intention to demobilise as they have no funds to continue the project."
Eng Chanakira said as part of proposed control measures a savings bond be issued in favour of China Exim Bank as collateral security of the Escrow Account while amending the agreement to reflect the developments. The project which is now at around 60 percent completion has undergone Unit 7 and 8 boiler steel structure installations and transmission tower foundation construction. A boiler, turbine and generator has been manufactured and delivered while Sherwood B site levelling is still underway.
The US$1.4 billion project which is being implemented by Sinohydro with funding coming from China Exim Bank is part of Government's efforts to ensure power availability as an economic enabler.
The Government is also struggling to import equipment most of which is sourced in countries that were hard hit by Covid-19 especially China. In an effort to boost power generation the country through Zimbabwe Power Company (ZPC) embarked on the stage 7 and 8 expansion project at cost of US$1.2 billion.
The project is expected to contribute an additional 600MW into the national grid when completed in 2021. Power supplies have over the past weeks been depressed owing to outages at Hwange Power Station as a result of breakdowns being experienced on other existing units. Out of the six units only three are operational churning out a combined 290MW resulting in the load shedding currently taking place in the country.
However, with the outbreak of Covid-19 pandemic work on stage 7 and 8 as well at the existing units stalled. Speaking in an interview at the sidelines of a tour of Hwange Power Station and the expansion project, Energy and Power Development Minister, Soda Zhemu said the Government was working on expediting the return of expatriates.
"What we did from morning was to understand the operations that are being done here at Hwange Power Station and toured the 7 and 8 project. We have taken note that the projects are progressing save for few hitches, which we had as a result of Covid 19 induced lockdowns. Some experts have been demobilised they had to go back to their countries especially China and some efforts are actually underway to have them come back. Yes, there will be some rescheduling in terms of the completion dates all that we have taken note of," said Minister Zhemu.
He said his ministry was also engaging the Finance and Economic Development ministry to resolve the issue of delays in payments were underway.
"Issues to do with funding some arrangements, which were initially done through the China Exim Bank, have to be resuscitated. The Ministry of Finance (and Economic Development) has to do something in order to ensure that payments are expedited and remitted to the banks so that they continue to honour the initial arrangements. We also had a tour of the existing plants where three units are on service and doing 270MW which are actually inadequate considering the power requirements in the country. Yes we have also taken note of the challenges that the power utility is facing in terms of the breakdowns that are there. Units 3 and 6 are not on the grid because of the annual overhaul maintenance, which was supposed to have been done and have since been stalled by Covid-19 since some experts have to be coming from South Africa and Italy work on the units."
Briefing the minister, Stage 7 and 8 Expansion Project site manager Engineer Forbes Chanakira said the project was being affected by Covid-19.
"There is a likelihood that we might fail to meet initial project completion of October 2021 for unit 7 as current delays puts the completion date at February 2022. As a result of the pandemic there have been delays in manufacturing and shipping of equipment which is primarily coming from China. We are also experiencing failure for manpower skills for installation and construction to mobilise to site contractor a requested waiver to allow a total of 324 employees to be mobilised. A total of 187 are expected before the end of September while awaiting approval for the remaining 137," said Eng Chanakira.
He said delays in IPC payments was also contributing to the stalling of the projects.
"We are experiencing delays in IPC payments as a result failure by ZPC to maintain an Escrow Account for foreign payments which is a condition for the disbursement of the loan by China Exim Bank. The outstanding amount is US$122,944.08 as at 3 September 2020. The effects of the delays in payment have been failure to meet project completion date. Project cost increases as a result of penalties for late payment. The interest due to IPCs claims by the contractor is US$4,169 million as of 3 September 2020. The contractor has notified ZPC on intention to demobilise as they have no funds to continue the project."
Eng Chanakira said as part of proposed control measures a savings bond be issued in favour of China Exim Bank as collateral security of the Escrow Account while amending the agreement to reflect the developments. The project which is now at around 60 percent completion has undergone Unit 7 and 8 boiler steel structure installations and transmission tower foundation construction. A boiler, turbine and generator has been manufactured and delivered while Sherwood B site levelling is still underway.
The US$1.4 billion project which is being implemented by Sinohydro with funding coming from China Exim Bank is part of Government's efforts to ensure power availability as an economic enabler.
Source - sundaynews
