Coal producers warn Govt over supply contract

THE Coal Producer Association (CPA) has warned the Government over contracting two companies to supply coal to the expanded Hwange thermal station, saying the exclusion of other producers may lead to increased risk concentration.

Zimbabwe Power Company (ZPC), a subsidiary of ZESA Holdings, the power utility responsible for producing electricity is in the process of commissioning unit 7 at the country’s second-largest power plant with capacity of generating 300 megawatts.

The unit 7 is expected to come online by end of this month, according to official timelines.

Unit 8, with the same capacity is expected to begin production during the first quarter of 2023.

The Government contracted Sino-Hydro to build two more units under a US$1,2 billion deal.

The Government awarded contracts to Hwange Colliery Company and Turbo Mining, a company linked to businessman Billy Rautenbach mining at Hwange’s western areas.

“We tried to formally engage the Government but we haven’t succeeded,” said Linos Masimura, the president of CPA. “Hwange unit 7 and 8 is a huge national project and by contracting two companies, you are basically increasing risk concentration.”

An official at the Ministry of Energy and Power Development said all procedures were followed.

“If they were outliers (the producers who failed to win the tender) of what was expected, they cannot just expect to be awarded the tender because it is a national project,” said the official, who requested not to be named because is not authorised to talk to the press. “Every player was given the opportunity to participate.”

The coming online of unit 7 and 8 is expected to significantly boost the country’s energy security, in light of subdued generation at the Kariba hydroelectric plant because of low water levels. Zimbabwe is currently grappling with rolling power cuts, also known as load shedding, after ZESA more than halved production at Kariba.-ebusinessweekly