Contractual dispute costs Zesa millions

ZESA queueZvamaida Murwira Senior Reporter
Zesa Holdings is losing millions of dollars in repairing faults and potential revenue because of haggling over payment modalities with a supplier it contracted to import test equipment to detect possible faults on transformers. For the past four months, Zesa Holdings and B T Critical (Pvt Ltd) have been embroiled in payment altercations and trading accusations and counter accusations as the supplier was demanding the power utility to pay the balance of the agreed advance payment to enable it to pay import duty for the imported equipment.

Zesa Holdings have remained adamant saying what the supplier was requesting was outside their contract, further delaying delivery of the equipment that have been lying idle for the past month at Harare International Airport. Zesa engineers said the equipment is used to test and certify integrity of equipment before use, that is at maintenance, after a fault and at commissioning of new plant and equipment such as transformers.

“What this means is that if there is a transformer or all substation equipment that is faulty and it is repaired before putting the transformer or substation equipment back into the grid, there is need to test the equipment first using this test equipment,” said one engineer who could not be identified for professional reasons.

He said the long load shedding could be avoided if Zesa Holdings resolved its dispute with the supplier. “All the high voltage plant and equipment must be tested before it is energised and this applies to generation, transmission and distribution which all are under ZETDC,” he said. At the height of the dispute was the $376 000 balance from a $501 000 advance payment made by ZETDC which the supplier claim he was entitled to before delivery.

ZETDC managing director, Engineer Julian Chinembiri wrote to B T Critical chief executive, Mr Blessing Chimanga that the money they had paid was for four units since they were not able to procure all the seven at once due to cash flow challenges. “We would like to bring to your attention that our position had not yet changed. As the finance director stated in our earlier discussions and subsequent correspondences, we still have cash flow challenges and this is the reason why we advised that we would like to bring in four units initially and once we pay for these fully, we will then pick up the remaining three units. We paid 60 percent ($501 000) of the value of the four units,” he said.

“We are therefore awaiting receipt of the four units and pay the 40 percent balance within 30 days as per our earlier correspondence four units.” Mr Chimanga accused Eng Chinembiri of failing to interpret their contract saying that showed he hastily signed the contract and purchase order.

“We wish to bring to your attention the letter you wrote advising that you would want to have all the seven test sets, but in the meantime you had raised funds for 60 percent units. This letter did not change the agreement and the contract signed by yourself, a position you later highlighted in the purchase order we received before your first payment,” said Mr Chimanga.

Eng Chinembiri referred questions to Zesa Holdings spokesperson Mr Fullard Gwasira who requested written questions. Mr Chimanga declined to comment saying contractual issues were confidential. “We do not like to discuss with third parties the contract that we have with our clients and we are sure the challenge between ZETDC and us will be addressed soon,” he said.