A CHINESE company which stopped work on the long-delayed Matabeleland Zambezi Water project is demanding $25 billion from government before it resumes business, the Zimbabwe Independent has esta
A report by the Bulawayo City Council’s Future Water Supplies and Water Action committee on the progress of the project says Chinese Electrical Machinery and Equipment (CEME) wants $25 billion for the work that it is expected to carry out this year.
The company is saying that it will not resume work unless half of that amount is paid in advance, the report says.
It abandoned work on the project last year after government failed to pay it in time.
CEME is expected to start working on stripping and clearing of foundations on the main dam, demolition and moving of large boulders and excavation of dam foundations if its demand is met.
“A request had been forwarded to the Ministry of Water Resources and Infrastructural Development for the amount of $25 682 000 000 for the activities identified by the contractor for implementation this year, with half the amount required as an advance. The amount from government is still being awaited,” the report says.
The report says the Ministry of Finance in January wrote to the Water Resources ministry reminding it that the government has committed itself to financing the construction of the Gwayi-Shangani dam, the first phase and major part of the Zambezi water project.
“The Ministry of Finance and Economic Development had written a letter in January 2004 to the Ministry of Water Resources highlighting that the government had committed itself to financing the construction of Gwayi-Shangani Dam,” reads the report.
“This followed prolonged delays in the finalisation of financing arrangements by Hope Mount services.”
Hope Mount Services, a company formed by the Matabeleland Zambezi Water Trust to source funds for the project, has failed to raise the US$50 million that it had promised to secure to kick-start the project.
CEME abandoned work last year after government failed to pay it due to foreign currency shortages. However, the Chinese firm has now agreed to be paid for services in local currency after reaching an agreement with the Water Resources ministry and the Zimbabwe National Water Authority.
Government this year only availed $300 million towards the project but the money has already been exhausted before the project started.