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US$172 million Gwanda solar project to go on

by Staff reporter
03 Dec 2023 at 10:35hrs | Views
INTRATEK Zimbabwe, a company owned by businessman Mr Wicknell Chivayo is expected to commence the implementation of the 100 megawatts Gwanda Solar Project after the Supreme Court dismissed an appeal by the Zimbabwe Power Company (ZPC) against a High Court decision which had found that the contract for the development of the project was still valid.

ZPC entered into a contract with Intratek Zimbabwe and technical partner, Chint Electric Company on 23 October 2015, for the project whose cost was estimated at just over US$172 million. ZPC paid US$5 million for pre-commencement works to Intratek. Since then, the matter spilled into court with ZPC arguing that no work had been done and the contract was no longer valid.

The case has been dragging before the courts with three Supreme Court judges on Friday dismissing an appeal by ZPC against a High Court decision which had found that the contract for the development of the Solar Project was still valid.
Speaking after the delivery of the judgment in Harare, Mr Chivayo's lawyer Advocate Lewis Uriri said following the judgement, Intratek will undertake the project as per the High Court ruling.

"You will recall that the High Court had made a finding that the procurement contract between Intratek Zimbabwe and the Zimbabwe Power Company was valid and subsisting. It noted that it had not been properly cancelled and that specific performance must be granted and ZPC appealed that to the Supreme Court contending that the contract had been validly cancelled and terminated by the passage of time and alleged certain breaches on the part of Intratrek as represented by Mr Chivhayo.

"The Supreme court found this to be without merit. It found that the High Court properly exercised its discretion in the assessment of the evidence that was before it and correctly came to the finding that specific performance ought to be granted, as a result their appeal was dismissed and what it then means is that the solar project will go on and Intratek will have to undertake the work in accordance to the High Court ruling," said Advocate Uriri.

Giving a clarification in a statement on Friday, ZPC said the High Court judgement did not award Intratrek damages in the sum of US$22 million as alleged by some online publications or any other sum in damages for that matter.
It said to the contrary, the High Court only granted an order for specific performance, which in simple terms requires parties to perform their respective obligations under the contract.

"Considering that the Supreme Court is the final Court of Appeal in this instance, the legal implication of today's (Friday) judgment is that ZPC and Intratrek will revert to the position that they were before 23 April 2018, when the EPC Contract was cancelled. It is equally important to highlight that the judgment does not create any further liability on ZPC outside that which is contained in the EPC Contract signed with Intratrek on 23 October 2015. Consequently, Intratrek is therefore still required to satisfy all conditions precedent to the commencement of the project, which it had failed to achieve as at 23 April 2018.

"In abiding with the Supreme Court judgment, Intratrek is now required under the reinstated EPC Contract to facilitate the financing of the US$172 million contract within the contractual timeframe as the requirement of financial closure is key for the project to commence. Should such financing be raised, the borrowing instruments must be approved by Government prior to implementation of the Project," reads the statement.

ZPC further expressed its commitment to a sustainable supply of power to the country in support of the National Development Strategy 1 and Vision 2030 objective of ensuring national access and total electrification.

Source - The Sunday News