Disastrous water project funding proposals
By Eric Bloch
R 92 years the residents of Matabeleland North have yearned for the Matabeleland-Zambezi Water project to become a reality. The concept of piping water from the mighty Zambezi River to Bulawayo was first mooted in 1912. It was realised that the growing town (now city) of Bulawayo was situated in an area subject to the vicissitudes of climatic conditions which could hinder its development if it could not access assured water supplies.
Disastrous water project funding proposals
The then conceptualisers of the project also appreciated that the necessary offtake from the Zambezi would, in relation to the torrents of water that flow down the river, be relatively minimal and that, therefore, there would be no environmental or downstream prejudice. In addition, conscious of the semi-arid conditions of much of Matabeleland North, they realised that a significant by-product benefit of the project would be to enhance agricultural activity in that region.
Regrettably, the then authorities rejected the project, contending that at an estimated cost of £60 000, it was beyond the means of the country. A like fate was accorded revived proposals for the project in 1932, at which time the projected cost was £600 000, and again in 1953, by which time the anticipated costs had soared to levels of over £40 million.
The late Eng. Cormack, Chief City Engineer of the City of Bulawayo, was a staunch advocate of the proposed Matabeleland-Zambezi Water Scheme, and even after his retirement he lobbied vigorously for it to come into being. So intense was his belief in its merits, and in the importance of bringing it into being, so as to assure the future of his beloved city, that he accepted endless speaking engagements, wrote prolifically in the printed media, and repeatedly plied the government of the day with submissions. That motivation and dedication undoubtedly hastened his demise, for he died whilst addressing a dinner gathering of Junior Chamber in the early 1960s, convincing all his audience that the project was a “must” for Bulawayo.
But all his efforts came to naught, until a series of drought years in the 1980s and early 1990s convinced a body of Bulawayo residents that government would never bring the project into being, and that “the Lord helps those that helps themselves”. They constituted themselves as the Matabeleland Zambezi Water Project, set about raising funds, researching the engineering, environmental, demographic and other implications of the project, and interacted strongly with central and local governments. They evoked great support from the people of Bulawayo, and stimulated widespread interest.
So effective was that body of well-intentioned, foresighted Bulawayo citizens that government recognised it could no longer disregard the calls from Zimbabwe’s second largest city, and from the substantial population that resided in the vast expanse from Bulawayo to the Zambezi. Government resolved to “hijack” the project from the then promoters and lobbyists, and set up the Matabeleland-Zambezi Water Trust (MZWT) under the very able leadership of the then Minister Dumiso Dabengwa. He motivated the trustees and the newly employed staff of MZWT to pursue implementation of the project, in collaboration with government and the affected local authorities as expeditiously as possible. Concurrently, he and his fellow trustees energetically restored morale amongst the populace, quelling the pronounced convictions (which had understandably developed over a period of more than 80 years) that the scheme would never come into being.
MZWT and government procured the support of the Swedish government, who funded a comprehensive and in-depth viability and environmental study, conducted by Swedish and Zimbabwean experts. The study corroborated the long-held beliefs that the proposed scheme, (incorporating the construction of a dam at the confluence of the Gwayi and Shangani rivers, a pipeline from that dam to Bulawayo, inclusive of pumping stations to lift the water from the dam to the watershed, and subsequently a pipeline from the Zambezi River to the dam), was immensely viable, most desirable and beneficial, and not materially damaging to the environment.
The trustees also recognised that, over and above providing Bulawayo with water security and the province with the opportunity of irrigation projects, the Matabeleland-Zambezi Water Scheme would be the catalyst for diverse economic activity beneficial to all Zimbabwe. That activity would range from tourism to fish farming, agro-industry and various facets of commerce. They motivated the establishment of a venture capital company, to lie fallow until the Gwayi-Shangani dam and pipeline came into being, but then poised to exploit the economic opportunities.
The next task was to raise the required funds but, tragedy of tragedies struck — that was just when the Zimbabwean economy commenced its accelerating slide down the slippery slope of economic mismanagement.
Amongst those whose support was greatly needed, but substantially lost, were the International Monetary Fund (IMF), the World Bank and other developmental and monetary agencies.
That was catastrophic for the intended Matabeleland Zambezi Water Scheme, for the magnitude of the funding required (now estimated to exceed $20 billion) was such that donor aids and “soft” loans of extended duration were a virtual prerequisite for the project to proceed. But almost all traditional sources of aid and of such loans had closed their cheque books, locked their safes, and slammed their doors insofar as Zimbabwe was concerned, with almost the only exceptions being the provision of humanitarian aid.
Although the funding of the project was, and is, essentially the responsibility of the government and the local authorities, MZWT tried to fulfil a facilitative role in accessing funding, but in the constrained environment had little success, despite many endeavours, much perseverance and pursuit of all perceived opportunities.
It was, therefore, with a sense of near euphoria that this columnist heard Minister Olivia Muchena, in her capacity as Acting Minister of Water Resources and Development, respond to a question in Parliament at question-time on Wednesday of last week, saying that there had been major progress in negotiations for the required funding, and these were expected to be finalised shortly, whereafter the project would soon commence. However, as she expanded upon her answer, the euphoria was rapidly wholly dissipated, for she then explained that the funding would be forthcoming as a “BOOT” or “BOT” arrangement, being a “Build, Own, Operate and Transfer” or “Build, Operate and Transfer” agreement. Under such a funding structure, the provider of the finance operates the project, after its completion, for an agreed period of time, whereafter the ownership and operation vests in the state or in the local authority, as the case may be.
The motivations of the contracting party providing the funds is generally procurement of the construction contracts, or control over their awards, and that following completion the project will yield revenues of sufficient substance to assure not only recovery of all the funds provided, but also a substantial profit thereon (very often in addition to large profits built into the construction contracts). “BOOT” and “BOT” contracts can be very beneficial to not only the financier/contractor, but also to the state and to the population. Many countries have achieved great infrastructural developments through such contracts, including in the areas of energy generation, telecommunications, air and rail facilities, roads, and much else.
But it is beyond the wildest imagination that that can be so in the case of the Matabeleland-Zambezi Water project, for if the financier/contractor is to obtain a fair return on the capital committed to the construction of the dam, and the pipeline, and thereafter the working capital for operations (inclusive of the considerable cost of energy necessary to pump the water from the dam to the watershed), the price of the water will inevitably be of such a great amount as to place the life-sustaining commodity beyond the means of most consumers. That price would also render agricultural and industrial consumption non-viable. The only possible exception to this desperate and disastrous scenario would be if the state and the local authorities would substantially subsidise the supply of water by the project to the consumers. But the straitened financial circumstances of both suggests that for them to do so would be greatly beyond their means.
Zimbabwe has waited 92 years for this much-needed project. The thought of further delays is appalling, but so too is the thought that the water becomes available but unaffordable. Better than that would be that Zimbabwe rapidly repairs its international image and relations, enabling it to raise developmental funding at acceptable cost.