News / National
Tagwirei breaks silence on Dema power plant tender
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Zimbabwean multi-millionaire tycoon Kudakwashe Tagwirei has for the first time publicly explained how he secured the highly controversial tender to construct the ill-fated Dema Power Plant project in 2015. The project, originally pegged at US$194 million over three years, was later reduced to US$83 million before escalating dramatically to US$250 million.
The Dema project was designed to provide emergency power relief during a period when Zimbabwe was battling electricity cuts caused by a crippling US$734 million debt to electricity suppliers.
Initially, American company APR Energy Holdings won the tender. However, APR was sidelined in favour of Tagwirei's Sakunda Holdings, which had not participated in the bidding process. This shift occurred following intervention by the Office of the President and Cabinet, with government officials alleging - without evidence - that APR was a "security threat" to justify awarding the contract to Sakunda via a cabinet directive rather than through an open bidding process.
Despite opposition from ZESA executives and engineers, who flagged the deal as costly, unsustainable, and risky, the government imposed the contract on the power utility and the public. The arrangement was widely condemned as a blatant act of patronage and cronyism at the expense of ZESA and its consumers.
The tender was less about public service and more about self-enrichment, critics say. To highlight the cronyism, Sakunda initially partnered with the late former president Robert Mugabe's in-law, Derrick Chikore - who contributed little beyond his family connections.
Following the Zimbabwe Independent's investigation revealing the project's potential to drastically increase electricity tariffs and cripple key power institutions, the annual project cost was scaled down from US$194 million to US$83 million. The Dema plant consumed some 12 million litres of diesel per month to generate 100MW.
APR later stated that ZESA could have saved an estimated US$200 million over three years by opting for alternatives such as liquid petroleum gas instead of diesel. APR's chairperson and CEO John Campion criticized the diesel-powered reciprocating engines as "not the most practical or cost-effective option," recommending instead modern mobile gas turbines capable of running on a range of fuels, which would have been cheaper and more efficient.
After receiving the tender in 2015 without clear expertise, Sakunda subcontracted Aggreko - one of the initial losing bidders - to provide technical support. The plant was constructed in 2016 with an installed capacity of 200 megawatts from 228 diesel generators but was scaled down to 100 megawatts using 111 generators. Despite the removal of diesel import tariffs for the project, ZESA was expected to purchase electricity at above-market rates, worsening its already precarious financial position and burdening the public.
The plant was largely mothballed by mid-2018 due to inefficiency and cost concerns. Subsequently, Sakunda attempted to sell the failed power station back to ZESA for US$66 million, a proposal that was rejected. ZESA executive chairman Sydney Gata condemned the plant's engineering and safety standards as "a capital offence," citing hazardous conditions such as the storage of 5,000 litres of diesel in exposed plastic-covered reservoirs without fire-fighting or emergency equipment.
In response to accusations of corruption, Tagwirei denied any wrongdoing, asserting that those who complain most about corruption are often the most corrupt themselves. He claimed his bid was "corrupt in the right direction" because it was lower than APR's. In his defense, Tagwirei also accused former Finance Minister Tendai Biti and ex-Local Government Minister Saviour Kasukuwere of corruption. Attempts to reach Biti and Kasukuwere for comment were unsuccessful at the time of writing, but The NewsHawks plan to follow up later.
The Dema Power Plant saga remains a stark example of the challenges Zimbabwe faces in its energy sector, underscoring the persistent issues of patronage, mismanagement, and corruption affecting public service delivery.
The Dema project was designed to provide emergency power relief during a period when Zimbabwe was battling electricity cuts caused by a crippling US$734 million debt to electricity suppliers.
Initially, American company APR Energy Holdings won the tender. However, APR was sidelined in favour of Tagwirei's Sakunda Holdings, which had not participated in the bidding process. This shift occurred following intervention by the Office of the President and Cabinet, with government officials alleging - without evidence - that APR was a "security threat" to justify awarding the contract to Sakunda via a cabinet directive rather than through an open bidding process.
Despite opposition from ZESA executives and engineers, who flagged the deal as costly, unsustainable, and risky, the government imposed the contract on the power utility and the public. The arrangement was widely condemned as a blatant act of patronage and cronyism at the expense of ZESA and its consumers.
The tender was less about public service and more about self-enrichment, critics say. To highlight the cronyism, Sakunda initially partnered with the late former president Robert Mugabe's in-law, Derrick Chikore - who contributed little beyond his family connections.
Following the Zimbabwe Independent's investigation revealing the project's potential to drastically increase electricity tariffs and cripple key power institutions, the annual project cost was scaled down from US$194 million to US$83 million. The Dema plant consumed some 12 million litres of diesel per month to generate 100MW.
APR later stated that ZESA could have saved an estimated US$200 million over three years by opting for alternatives such as liquid petroleum gas instead of diesel. APR's chairperson and CEO John Campion criticized the diesel-powered reciprocating engines as "not the most practical or cost-effective option," recommending instead modern mobile gas turbines capable of running on a range of fuels, which would have been cheaper and more efficient.
After receiving the tender in 2015 without clear expertise, Sakunda subcontracted Aggreko - one of the initial losing bidders - to provide technical support. The plant was constructed in 2016 with an installed capacity of 200 megawatts from 228 diesel generators but was scaled down to 100 megawatts using 111 generators. Despite the removal of diesel import tariffs for the project, ZESA was expected to purchase electricity at above-market rates, worsening its already precarious financial position and burdening the public.
The plant was largely mothballed by mid-2018 due to inefficiency and cost concerns. Subsequently, Sakunda attempted to sell the failed power station back to ZESA for US$66 million, a proposal that was rejected. ZESA executive chairman Sydney Gata condemned the plant's engineering and safety standards as "a capital offence," citing hazardous conditions such as the storage of 5,000 litres of diesel in exposed plastic-covered reservoirs without fire-fighting or emergency equipment.
In response to accusations of corruption, Tagwirei denied any wrongdoing, asserting that those who complain most about corruption are often the most corrupt themselves. He claimed his bid was "corrupt in the right direction" because it was lower than APR's. In his defense, Tagwirei also accused former Finance Minister Tendai Biti and ex-Local Government Minister Saviour Kasukuwere of corruption. Attempts to reach Biti and Kasukuwere for comment were unsuccessful at the time of writing, but The NewsHawks plan to follow up later.
The Dema Power Plant saga remains a stark example of the challenges Zimbabwe faces in its energy sector, underscoring the persistent issues of patronage, mismanagement, and corruption affecting public service delivery.
Source - online
