The government will continue paying the balance for the Pomona waste-to-energy deal despite Harare City Council (HCC) having cancelled the agreement worth over US$700 million, NewZimbabwe.com reported citing Local Government Minister, July Moyo.
The minister confirmed in Parliament last Wednesday in response to questions by opposition Members of Parliament.
He said that anything that would be abrogated was to be taken over by the government and it had done so.
Harare City cancelled the agreement with Geogenix and the negotiated arrangement after a public outcry and failure to raise the required funds for the waste-to-energy management project.
Council reported the initiative would consume US$22 000 a day.
Responding to questions from CCC MPs, Moyo said:
Government is paying so that Pomona can be fixed and it is being fixed. It is enjoined to make sure that the project does not default and will take the risk of that default…
When we have a government guarantee over any entity in the country and if there is a potential default, Treasury is the one which undertakes to take over the payment and it is paying.
Asked why the government was still guaranteeing a project that no longer existed, Moyo said the deal was not properly cancelled. He said:
We did not want to be in default and, therefore, we have gone ahead to make sure that we protect the integrity of the country in terms of investments and in terms of doing a job, which we know we have to do and that is why we are going ahead with that project.
Moyo also dismissed claims by Harare East MP, Rusty Markham that devolution funds were being used to guarantee a project in perpetuity.
Harare East MP, Tendai Biti suggested that Moyo was violating the Constitution which in Section 264 says local authorities are run by elected people and not the Honourable Minister. He asked:
What is the Honourable Minister’s take on this corrupt agreement?
Moyo said the central government has the responsibility over lower-tier authorities throughout the country, “not just Harare.“
The Pomona dumpsite waste-to-energy project is expected to generate up to 22MW of electricity and create at least 300 jobs.
The US$344 million deal requires Harare to pay US$22 000 per day to Geogenix BV, an amount CCC councillors are saying is too high for a council that has been failing to provide required public goods and services due to a lack of adequate resources.