WHAT IS WRONG WITH EEC’s LAVUMISA POWER PLANT?
Exactly five months ago Prime Minister Cleopas Dlamini toured the 10MW Solar Photo-Voltaic Power Plant at Qomintaba in Lavumisa beaming with smiles as the Eswatini Electricity Company (EEC) head honchos frothed at the mouth praising this project as heralding new beginnings in the country’s ambitious quest to be energy sufficient.
Dlamini also toured the Ncandweni and Ndzevane Substations both hailed by EEC as the country’s solution to the problem of overreliance on South Africa’s fragile energy supply. The 10MW Solar Photo-Voltaic Power Plant was estimated to have cost E255-million and was sold to the Premier as going to reduce electricity imports by approximately five percent. This plant alone, we were told, could power the city of Mbabane in a day.
The Lavumisa power plant was expected to generate a capacity of about 13.75MW and to deliver a guaranteed capacity of 10MW at the point of connection with an expected yearly yield of around 22GWh. Even better, the Prime Minister was told that the project had managed to provide employment to at least 200 people. It was projected that additional job opportunities were expected to come especially for future maintenance of the solar panels that span over 35 ha, as well as controlling the vegetation in the area.
A South African contractor, Consolidated Power Projects Energy Solutions (CONCO), a subsidiary of Consolidated Infrastructure Group, was responsible for the construction of the plant. Worth noting is that Consolidated Infrastructure Group is under business rescue in South Africa. The power plant belongs to the Eswatini Electricity Company (EEC) though. However, The Bridge can today reveal that the Lavumisa power plant has not only been soiled by allegations of corruption but has also become a damb squib.
The Bridge understands that the technology that controls the whole plant performance does not work and that the entire Supervisory Control and Data Acquisition (SCADA) system—which links together numerous hardware and software components of a site in order to easily monitor, control and analyze performance—has been compromised and malfunctioning.
Without it, The Bridge has been told, the entire plant cannot operate optimally. In fact sources have told The Bridge that the system was not properly designed and fitted. According to industry sources, what is scandalous with the project is that CONCO has been refunded the performance bond, much against industry practice and norms. A performance bond is commonly used in the construction industry as a means of insuring a client against the risk of a contractor failing to fulfil contractual obligations to the client. Performance bonds can also be required from other parties to a construction contract. Whether or not a performance bond is required will depend, in the main, on the perceived financial strength of the party bidding to win a contract, as the most common concern relates to a contractor becoming insolvent before completing the contract.
These Bonds are typically set at 10 percent of the contract value. In the case of the Lavumisa project, the performance bond was released before the project could be evaluated as working properly. The local media has already reported that the project what was described as having ‘operational snags’. In fact the Times of Eswatini reported that EEC had promised to continue to work with the contractor ‘during the defects and liability period’.
There are three other renewable energy projects currently underway meant to generate a further 40MW of Solar Power along with a 40MW Biomass power plant. Eswatini Energy Regulatory Authority (ESERA) has procured Independent Power Producers (IPPs) to take on these projects. In handing out the Commissioning Certificate to CONCO by EEC Acting Managing Director, Ernest Mkhonta was quoted in the local media as having said that they believe the completion of the Lavumisa project was a landmark event and represented a new frontier for large scale renewable power plants coupled with energy storage systems.
“This one-of-a-kind installation is the cornerstone upon which the EEC will expand its generation capacity to produce sustainable green energy to achieve self-reliance for the benefits of the citizens of the country,” Mkhonta was quoted saying. In its endeavour to empower the nation and help combat the socio-economic issues facing Eswatini, EEC impressed that CONCO partner with the Inyatsi Construction Group Holdings for the civil work at the plant and the substations.
The Bridge has been told that controversial businessman Dr Shaheen Ahmed is said to have been the transactional advisor on the project and has been paid despite the challenges now faced by the project.
“The construction company ( EPC ) for the project was CONCO a subsidiary of Consolidated Infrastructure Group which is under Business Rescue. The BR process will be finalised this year and everything closed down. To the extent that they accepted COD for plant commercial date of operation - it makes it difficult for EEC to claim against the non performance from EPC contractor more especially because the contractor is facing business rescue,” said a source within EEC.
The Bridge understands that Dr Shaheen, the transactional advisor and engineer in the project, has obviously gotten his fees from EEC when he declared the commercial date of operation and would now charge new fees to EEC for any additional scope. In this case, it would include fixing the snags that make the plant non operational. There is already concern from some quarters that Dr Shaheen Ahmed seems to get all major transaction advisory projects for EEC through his company ESP.
In a statement circulated on Facebook, EEC denies that the plant was not connected to the SCADA or not working optimally or that there was any corruption associated with the project. The company’s Khaya Mavuso said everything was working fine at the station and that they will prove that this was not true by providing The Bridge with a detailed evidence of their side of the story.