Zimbabwe Power Company (ZPC) and Intratrek Zimbabwe Pvt Ltd are negotiating to resume work on the proposed 100MW solar facility in Gwanda, following a High Court decision to uphold the contract between the two parties.
However, concerns remain about the possibility of protracted negotiations, considering that nearly nine years have passed with minimal activity since the solar deal was signed on October 23, 2015.
Last year, the Supreme Court ruled in favor of Intratrek, affirming two previous High Court decisions that contradicted ZPC’s attempts to terminate the contract.
Legal Counsel and Company Secretary of ZESA Holdings, Tongamirai Chinhengu, explained the court’s reasoning: “The Supreme Court ruling recognizes that ZPC, a government entity, may have delayed payments to Sinosure (the potential financier). The private company Intratrek cannot be held accountable for these delays that hindered Financial closing.
“The court applied the legal concept of ‘fictitious fulfillment’ or ‘waiver of rights’. ZPC’s delays resulted in ZPC waiving its right to cancel the contract within 30 days. This is the basis on which the cancellation was set aside,” Chinhengo continued.
As a result of the court order, ZPC and Intratrek are currently negotiating how to proceed. The parties are expected to reach a mutually acceptable amendment to the contract with respect to technology, price and timelines.
However, Chinhengu was unable to provide a specific timetable due to ongoing negotiations.
“There are two main reasons why there is no timetable,” he said. “First, a workable pricing model can only be created once the financing details are finalized.”
“ZPC has received various financing options, which I cannot disclose at this point. These options will ultimately determine the project’s timeline for financial close.
Chinhengu acknowledged his limitations as a legal advisor when it comes to predicting the completion of negotiations.
“From a political perspective, I rely on the advice of the Director-General,” he admitted.
Nobert Matarodza, acting director general of ZPC, expressed a more optimistic timeline, noting that “at best” negotiations should take no more than six months.
However, this timeframe seems unlikely given that Mahangwa, chair of the parliamentary energy portfolio committee, indicated that six months had passed around January 2025, and the acting MD’s response suggested that negotiations could continue for years.
However, the acting MD said other power projects such as the expansion of the Hwange Seven and Eight power plants, which faced no legal challenges, took years to complete, however the contract was awarded in 2014 but the financial close took place much later.
“The Hwang Seven-Eight case, as there were no cases like this, took several years. You see, if we had money as ZPC, which we could then use to finance this project, it would have a completely different dimension. But we are in “In fact, we will be borrowing money with the EPC contractor.”
The learned counsel also held that since the Supreme Court ruling held the contract to be valid, any engagement must be post-contract, such that it can be “amended or varied, provided the parties mutually agree to it and then convert it into writing.”
“The current engagements are within the scope and stipulated in the contract, and if any resulting adjustment is to be made, that is, in terms of time frames, technology and contract price, all of this will be done within the limits and scope of the contract which is fully consistent with what it provides,” said Chinhengo.
The negotiations will include the contract price, and Chinhengo said, “It is a practical issue that no one can technically escape from.”
“The latest indications we have been getting are that the contractor is also quite open to the idea of a price reduction, so it is a subject of ongoing discussions. We hope we can agree a price that is reasonable and workable in the circumstances, and overall will give the government value for money.”
Acting Technical Director of the ZPC project, Engineer Forbes Chanakira, added that as time passes as technology evolves and costs change, this should be reconsidered in the contract.
“Obviously, in terms of the issues that we engage in, naturally that will be part of the issues that we will also deliberate on to find a way to integrate the changes that are happening in terms of technology globally. So yes, basically, the changes in technology will be taken into account during Deliberations
