Business - Featured - Local - Top Stories - March 23, 2021

ZESA rejects to buy Dema diesel power plant

Zimbabwe’s power utility, ZESA has rejected a proposal by Sakunda Holdings proposal to buy the failed Dema diesel power plant for US$66 million.

Dema Power Plant was built in 2016. It has an installed capacity to produce 200 megawatts from 228 diesel generators, however this was reduced to produce 100 megawatts with 111 generators. Sakunda was in 2015 awarded a contract to install the 200MW plant in Seke, despite not having participated in the tender for the project.

The plant ran only between July 2016 and March 2017, before Sakunda shut it down citing diesel shortages. Sakunda has approached ZESA with a proposal to buy the plant.

ZESA’s executive chairman Sydney Gata told parliament on Monday that the power utility rejected this offer.

“We declined to purchase the power station for US$66 million. I had opportunity to visit the power plant, and to inspect the engineering layout, the designs and facilities at the power station. I’m very surprised that this country could actually license an asset like that. I saw something that, as an engineer, is a capital offence,” he said.

A site visit revealed how 5000 litres of diesel were being stored in an exposed open plastic-enveloped reservoir.

“It was a potential calamity for the communities around there. I did not see fire-fighting equipment, I did not see emergency equipment. I didn’t see environmental mitigation measures,” Gata said.

After being handed the project in 2015, Sakunda went on to subcontract Aggreko, one of the losing bidders, as a technical partner in the project. Aggreko, which rents out diesel power plants, has since had “contractual disagreements” with Sakunda, and this has seen the 100MW generator, part of the plant, being stripped from the site.

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