Bulawayo dam deal will leave ratepayers drowning in bills

A $126 million plan to construct the Glass Block Dam in the Umzingwane catchment area could finally provide relief for Bulawayo's persistent water shortages. However, the project's private financing model under a Build-Operate-Transfer (BOT) arrangement has raised alarms that residents might end up paying up to three times more for water.

The dam proposal, led by a private consortium including JR Goddard as lead, project managers Sesani, and financial advisors Genesis Global Finance, involves a 25-year water purchase agreement with the Zimbabwe National Water Authority (ZINWA). While Bulawayo City Council would own the dam wall, the dam itself would remain under ZINWA's control in accordance with the Water Act, as detailed in a recent report tabled in Parliament by a joint committee of MPs.

Funding is expected from the African Development Bank (AfDB) and Afreximbank. Yet, the report warns that the water price under this model could reach as high as $0.90 per megabyte - nearly triple ZINWA's current rate of $0.33 per megabyte.

"The astronomical charge of water proposed by the Glass Block consortium of $0.99 cents per megabyte will have a catastrophic impact on the water billing system of Bulawayo, causing severe overcharges on the end users," the MPs warned.

Zimbabwe's government has struggled to directly finance large infrastructure projects, making the BOT model a practical alternative. However, MPs emphasize that the model's cost recovery requirements often push tariffs to unaffordable levels. Although the consortium is reportedly exploring ways to reduce the charge to $0.50, MPs insist this remains too high for average residents.

"It is imperative that the arrangement of the water service charge be significantly revised before making any headway towards giving the project the green light. Water is a basic human right and should not be commercialised in any way whatsoever to the detriment of its access by the citizenry," the report states.

The Glass Block Dam is seen as a faster, smaller-scale alternative to the stalled Gwayi-Shangani project, which was originally intended as Bulawayo's long-term water solution. Gwayi-Shangani still requires an additional $84 million to complete the dam wall and a further $684 million to construct a 252km pipeline.

"The Glass Block Dam is presumed to ease pressure from the government coffers and give the government breathing space to focus on the demanding Gwayi-Shangani Project," the report notes.

Nevertheless, the BOT model's inherent risk remains: developers must recover their investments within a limited period, requiring high tariffs even for essential services such as water. The Glass Block consortium initially sought funding from the U.S. International Development Finance Corporation (DFC), which declined to finance Zimbabwe projects, forcing the consortium to turn to AfDB and Afreximbank.

Bulawayo faces a dire water situation, with its key dams - Umzingwane, Upper Ncema, and Lower Ncema - now dry. Aquifers and smaller dams provide only limited relief, and Gwayi-Shangani, expected to supply 220 megaliters daily - more than Bulawayo's current demand of 165 megaliters - remains years behind schedule.

Without the completion of the dam wall, pipeline, and associated infrastructure including a planned 10MW hydropower plant, Bulawayo's water woes persist. For now, the city's residents remain caught between water shortages and the threat of significantly higher water bills under the Glass Block BOT plan.