Message Mar 30 Mar 2010 07:17

Zesco pulls out of liberia deal with cec

Zesco pulls out of liberia deal with cec
By Kabanda Chulu in Kitwe
Tue 30 Mar. 2010, 04:00 CAT [17 Reads, 0 Comment(s)]

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ZESCO has pulled out of the joint bid with Copperbelt Energy Corporation (CEC) to operate the Liberian Electricity Company, resulting in the joint bid collapsing, CEC executive chairman Hanson Sindowe has revealed.

And CEC has engaged the governments of DR Congo and Zambia requesting the rights to construct high voltage transmission power lines from the Copperbelt through the Pedicle Road into Luapula Province.

The two Zambian entities had submitted a joint bid that was pre-qualified with intentions to sign a management contract to help restore full electricity supply to the Liberian people following years of instability that resulted in infrastructural damage.

Had the bid succeeded, it could have demonstrated the ability of CEC and Zesco to work together as partners in a high profile international project.

In an interview last Friday, Sindowe said the deal had sent a positive message to the international community that Zambian entities were competitive and competent in the management of power systems.

“The Liberian project has fallen off because Zesco decided to drop out citing huge challenges at home and we thought we should not proceed alone as CEC so we decided to withdraw from the Liberian bid,” Sindowe said. “But this is not the end of our partnership with Zesco, we shall continue working together especially that CEC is the major customer.”

Recently, a team from CEC completed a consultancy assignment in the Gambia that was aimed at launching the transmission system management thus show-casing the recognition that Copperbelt Energy commands within Africa for its skills in designing and operating transmission systems.

And Sindowe said the successful completion of the transmission power lines across the Pedicle Road would demonstrate true and good cooperation between the DR Congo and Zambia.

“We have written to the two governments requesting the rights to construct a high voltage transmission line from the Copperbelt into the Luapula Province and we are hoping for a positive response since we believe there is a huge potential across the pedicle road that requires to be serviced. It takes time when engaging two governments to get concessions from them but we are looking forward to start to undertake this project and soon we shall be traveling to the DR Congo to meet officials over the same project,” he said.

On the Kabompo Gorge Hydro Power project, Sindowe said CEC would go ahead and do it alone following the pull out by TATA Africa from the joint venture.

“We are on course and CEC is capable to develop the project even without a partner. It is a viable project and assuming everything goes according to plan, tenders for the construction will be selected soon and project commissioning is expected to take place by 2014,” said Sindowe.

Copperbelt Energy managing director for operations Neil Croucher said the future of the Zambian economy lies in investing in the development of existing and new power generation projects.

“We anticipate demand to increase by 40 per cent from our existing and new customers and as economic growth rises, we shall soon get back to power shortages hence the way forward lies in development of brown existing and greenfield power generation projects,” Croucher said. “And this is why we are looking forward to develop the Kabompo gorge project and we are still interested in the Kafue Lower project and we submitted bids expressing interest and we are just waiting for the next stage in the process.”

He said the construction of the second line of the interconnector with the DR Congo would be implemented soon following the signing of agreements between SNEL and its financier, the World Bank.

“Two separate tenders had been issued out with one looking at the supply and transmission line while the other would be for the power sub-station and we expect completion and commissioning of the project to take place either this year or early next year,” he said.

Croucher expressed optimism that 2010 would result in positive business operations.

“The effect of falling copper prices caused a reduction in our capacity sales to mining customers of 24 per cent from an average of 532 mega watts during 2008 to a low point of 404 mega watts in September 2009.Copper prices are increasing but consumption patterns have not reached the level it was before the global economic recession since current capacity sales are hovering around 430 mega watts,” said Croucher. “We are hopeful that things will improve especially that we are seeing a recovery, with activity re-commencing at Luanshya Copper Mines and Chambishi Metals and continued investment by Konkola Copper Mines to expand both its mining and smelting capacity and also Mopani intends to sink some mining shafts.”

Following the acceptance to the Southern Africa Power Pool (SAPP) as a full membership, CEC intends to grow its current share of 50 per cent of the Zambia's sector to become a dominant operator for the SAPP region.

Currently, CEC has a power generation capacity of 80 mega watts (gas turbine alternators), transmission and distribution network of 835 kilometers of overhead power lines and 36 high voltage substations and electricity network carrying capacity in excess of 700MW.

CEC, which is formerly Power Division of the defunct ZCCM, also serves the region by operating an interconnector with the Democratic Republic of Congo (DRC), through which power is wheeled to Zambia, Zimbabwe and South Africa.