Speaking
at
a
recent
ZANU-PF
rally,
Mandiwanzira
said
that
if
Chivayo
had
built
the
dam
and
hydro-power
plant
as
expected,
local
communities
would
have
benefited
through
jobs
and
increased
tourism.
However,
in
a
post
on
his
social
media
pages
on
Wednesday,
21
January,
Chivayo
said
the
Gairezi
30MW
Hydro
Project
was
not
awarded
to
him
personally.
He
said
the
tender
was
given
to
a
consortium
led
by
a
multi-billion-dollar,
Indian
government-owned
engineering
company.
Said
Chivayo:
“The
tender
for
the
Gairezi
30
MW
Hydro
Project
was
not
awarded
to
‘CHIVAYO’
personally,
but
to
a
consortium
led
by
an
Indian
Multi-billion
dollar
Government-owned
engineering
conglomerate,
BHEL
(Bharat
Heavy
Equipment
Limited
),
working
together
with
Angelique
International
Ltd,
while
Intratrek
Zimbabwe
(Pvt)
Ltd
participated
as
their
local
contractor.“Like
many
local
contractors
across
Africa,
Intratrek
rides
on
the
CREDIBILITY,
bankability
and
TECHNICAL
CAPACITY
of
international
OEM
partners
in
order
to
achieve
project
delivery.“In
this
case,
that
international
credibility
was
precisely
what
made
the
consortium
competitive
and
to
be
awarded
the
tender
as
the
LOWEST
compliant
bidder
to
specification.”
Chivayo
said
the
project
could
not
proceed
because
of
its
high
cost,
which
he
estimated
at
US$113
million. He
said:
“The
fundamental
issue
that
prevented
implementation
was
challenges
in
achieving
FINANCIAL
CLOSURE.“The
project
cost
was
USD
113
million
for
30MW,
which
made
the
business
case
extremely
DIFFICULT
to
finance
when
tested
against
the
lenders’
requirements
of
Return
on
Investment,
yield,
asset
return,
plant
load
factor,
and
overall
BANKABILITY.“In
simple
terms,
it
is
not
enough
to
have
a
technically
feasible
hydro
power
plant.“Financiers
must
be
satisfied
that
the
project
has
sustainable
CASHFLOWS
and
repayment
security.“Unfortunately,
the
FINANCIAL
MODEL
struggled
to
meet
that
threshold.”
Chivayo
said
he
lost
money
on
the
project,
even
though
it
never
took
off,
due
to
the
costly
and
lengthy
bidding
process,
which
required
frequent
international
travel
to
original
equipment
manufacturers,
mainly
in
India
and
other
countries,
before
the
final
tender
submission. He
said:
“It
is
also
important
for
both
you
and
the
general
public
to
understand
how
projects
like
this
actually
work.“Before
any
DISBURSEMENT
is
made,
there
are
strict
project
finance
requirements
such
as
Letters
of
Credit,
Advance
Payment
Guarantees,
Performance
Guarantees,
supplier
guarantees,
OEM
confirmations
and
technical
milestones
such
as
Factory
Acceptance
Tests
and
inspections
for
key
equipment.“As
Contractors,
we
even
incur
substantial
UPFRONT
COSTS
during
the
cumbersome
bidding
process
for
international
travel
to
OEMs,
often
in
India
and
elsewhere
overseas,
before
the
final
tender
submission.“So
if
anything,
Contractors
also
get
DISAPPOINTED
when
projects
stall,
because
we
invest
real
money
and
expect
a
return
out
of
it.“We
are
always
ready
to
execute
because
the
more
we
CONSTRUCT
and
commission
projects,
the
more
we
EARN
through
fairly
reasonable
margins.”
Chivayo
said
he
received
no
payment
from
ZESA
for
the
Gairezi
project,
as
ZESA,
through
the
government,
prioritised
high-yield
power
generation
projects
such
as
Hwange
Units
7
and
8. He
wrote:
“It
is,
however,
understandable
that
in
this
case,
ZESA,
through
Government,
ultimately
prioritised
high-yield
generation
projects
such
as
Hwange
Units
7
&
8,
which
gave
a
total
output
of
600MW
after
project
execution
and
commissioning.“In
simple
terms,
suffice
it
to
say
this
explains
why
the
Gairezi
project
and
others
such
as
Harare
and
Munyati
Repowering
Projects
were
held
in
abeyance.“I
therefore
respectfully
acknowledge
your
concerns
as
an
Hon.
Member,
and
I
look
forward
to
the
project
being
REVISITED
by
the
government
and
the
most
ideal
funding
structure
being
considered
for
its
development.“I
hope
this
clarification
assists
the
public
to
understand,
and
all
those
making
SPECULATIVE
comments
suggesting
that
payments
were
made,
should
also
be
respectfully
guided
accordingly.”