The Sunday Mail
Wicknell Chivayo
The starting point (of a project) is a document known as the “Cost Proposal” which invites companies to participate in a tender.
The document generally sets up the scope and parameters of how things should be done. Zimbabwe has never had someone successfully commission a solar project that feeds into the national power grid.
These submissions should have key elements that prove that each company can mobilise funding.
What usually happens in such cases is that funding is given a timeframe, so the quality of funding is a function of the technical partner.
We are working with a company called Chint Electric.
With a multi-billion-dollar balance sheet, they are integrated solar (equipment) manufacturers.
They have the ability to design, manufacture and install a solar project.
Every participant in this contract has to ride on the CV of their technical partner because there is noone in Zimbabwe with the capacity to do this.
Intratrek then had to put together the winning proposal, which went through several stages, which started from the moment we submitted the bid.
The proposal is opened in front of everyone, and then taken through to the State Procurement Board for eligibility and tax clearance checks, among other things.
Afterwards, it is taken further to the adjudication panel and goes through different submissions to make sure that the tender is written up.
So, once that is done, we then proceed to negotiate the tender contract.
Why a certain amount was advanced
When we bring funding, there is a certain amount that is technically possible with banks due to the micro-economics of Zimbabwe.
Offshore funding accounts for 85 percent and, generally, with such a contract, you should have agreed that the employer is supposed to meet 16 percent of labour funding.
This issue then becomes very technical and contractual because we are bound by the contract not to comment on certain issues.
What I can tell you is that projects start with what we call pre-commencements.
The project only starts when the pre-commencement on the project is a moving target.
The project owner is a function of the bill of quantities that accompanies tender submissions.
These matters are handled at the issuance of adjudication.
The contract will require pre-commencement work, and that an advance be given.
This is done to secure plant performance, so the Zimbabwe Power Company will be added to sign papers with regards to guarantees.
I think that discussion was very much alive.
Usage of funds we have reserved is based on the bill of quantities.
So, I will go to my bill of quantities and say, I have given them my feasibility (assessment) and would have given them the topographical survey.
We drill to assess the conditions underground, and that is one of the major works we have done so far.
Such clearing aims to facilitate the project.
However, one of the things that you should understand is that the Environmental Management Agency will raise questions once the environment is disturbed.
Ema gave us limited clearance time to do our work, and that limited clearing time was not enough.
We have done 70 percent of clearing work, but recommencement is 2 percent of the project.
We have done the borehole, clearing and topography surveying; but that does not affect the amount we are talking about.
Now, we are waiting for Ema to give the final clearance so that we start doing work.
That is one of the biggest outstanding hindrances, otherwise we would have started.
When we talk of SPB contracts, it’s not a process where the owner micro-manages the contractor.
The contractor’s duty is to deliver a project, and he is not there to play.
The impediment that is hampering the project is Ema, which I believe, are now negotiating. We can start once we are given the licence.
It’s a project that has a lot of moving objects in terms of dividends.
Funding is a joint effort
There is a significant foreign portion that has to be mobilised. The China Export-Import Bank is there to support its locals. China will not employ outsiders.
Their locals have to benefit from the bank.
If we can finalise the Sinosure funding, then the project is 100 percent funded.
The project commences early once the funding has been secured.
Pre-commencement is a structure that has integrated into our project.
There is no contractual hamstring when there is financial closure four five months.
They can’t put red tape, there is no way.
What we need to do now is to manage our logistics and cost modelling.
For example, why should we keep the equipment on the ground when we know that after we have taken it, Ema could say ask us to come and finish clearance and remobilise the equipment?
But work has already started, and we know that work is now feasible.
One does not necessarily want to demonstrate how busy they are, you have to consider the bill of quantities that are bidding to the contract, and that is what guides us.
The Gwanda project is allowing.
Why?
Because the contract governing it is allowing, and the relationship between the ZPS and Intratrek is amicable.
And the relationship between our company and Government is good, too.
The people of Zimbabwe should know that there is a hostile environment in terms of funding, but we have done commendably well.
I also believe that Government’s ease-of-doing-business approach will help us as well.
As soon as we have Ema authorisation, it will not take more than four months to finish pre-commencement.
The maximum period is 18 months, and you must understand as well that the project does not end once you have finished constructing.
It ends when you have commissioned, when its operating.
Commissioning will take maybe seven to eight months after we have started.
But it would have taken 12-13 months to finish.
The biggest delay is that much of the project is done offshore, the manufacturing of the solar panels.
If energy bonds are issued, it makes it easier.
We are having problems with Nostro accounts, and the Reserve Bank of Zimbabwe should be helping us through the Government dispensation or some innovation that makes offshore payments are easy. We are, however, pursuing several channels.
Mr Wicknell Chivayo is the Chief Executive Officer of Intratrek.
