HARARE – A US$344 million waste-to-energy contract awarded to a company linked to President Emmerson Mnangagwa’s family was “shamefully imposed” on Harare, the Harare Residents Association and Transparency International Zimbabwe said on Tuesday.
The contract, rushed through after Harare mayor Jacob Mafume was suspended by local government minister July Moyo and several opposition councillors recalled, has been challenged in court.
The 30-year contract for the Pomona waste dumpsite was awarded to Geogenix BV, a company registered in the Netherlands, without public consultations or public tendering.
The High Court has been told that “the contract was designed to fail” as it imposes obligations on the City of Harare to deliver set quantities of waste, and if it fails the contract can be cancelled and the city forced to pay US$3.5 million for breach.
Under the banner of the Harare Metropolitan Residents Forum, the Harare Residents Association and TIZ argued that the memorandum of agreement between City of Harare and Geogenix BV reeked of bad faith and was intended to benefit politically-connected elites.
Geogenix BV is fronted by Dilesh Nguwaya, a business partner of President Mnangagwa’s twin sons Collins and Sean. Reports say Sean and Nguwaya travelled to Albania to negotiate the contract with Geogenix BV’s beneficial owner, Mirel Mërtiri, who faces corruption allegations in his own country involving an incinerator contract.
The scandal has been dubbed “Wastegate” by the media.
“We, the representatives of the Residents Associations and Civil Society Organisations advocating for good local governance, transparency, accountability, climate and debt justice condemn and reject the imposed shameful Pomona waste to energy project on the residents and ratepayers of Harare, and the metropolitan at large,” the residents and TIZ said in a statement.
“In our view, the contents of the Memorandum of Agreement signed between the City of Harare and Geogenix for the US$344 million Pomona Waste to Energy Project is a pure scandal, and a burden to the city meant to serve the best interests of the politically connected elites at the expense of the residents of Harare.
“We reiterate that this scandal is a well-crafted and cunning plan designed to siphon resources and strip assets from the already cash-strapped and financially distressed local authority.”
The forum’s spokesperson Marvelous Kumalo said “while we welcome innovation aimed at solving our waste management challenges, this must follow due processes and be premised on tenets of good governance which are citizen participation, transparency, and accountability.”
Harare, which previously dumped its waste for free, must now pay Geogenix BV to receive it after the city signed over its Pomona dumpsite to the company.
The city will pay Geogenix BV US$40 per tonne delivered. The stipulated daily delivery is at least 550 tonnes or a minimum 200,750 tonnes per year – translating to US$8.03 million for Geogenix BV in the first year.
By the second year, the daily tonnage will rise to 650; going up to 750 in the third year; 850 in the fourth year and 1,000 tonnes per day at the start of the fifth year, meaning Harare will pay Geogenix BV a minimum US$14.6 million annually starting in 2027 until 2052.
The agreement says should Harare fail to meet the minimum quantities, the city will still be invoiced as though it made the deliveries to meet the minimum annual guaranteed waste quantity.
“The payment of the annual minimum guaranteed amount shall not be contested or disputed by the City of Harare throughout the term (30 years),” the agreement says.
Kumalo accused minister Moyo of abusing his position, claiming that the agreement was a “direct attack on the devolution of power provided in Chapter 14 of the constitution” that would harm the interests of Harare.
“We view that the actions by the minister of local government in this whole scandal are clearly acts of abuse of power and office… In a normal business contract or agreement, we expected Geogenix to pay for the rental of the dumpsite and even waste deposited at the dumpsite and not vice versa, since they will be selling electricity to ZETDC,” said Kumalo.
“Considering the fact that waste incinerators have a lifespan of between 25-30 years, the plant will be handed over to the City of Harare when it is useless under the Build, Own Operate Transfer partnership model.”
The residents said they were concerned by “the ever-increasing appetite by the central government to centralise power even though the constitution provides for devolution.”
“We don’t expect the whole cabinet to sit to decide on a project for the City of Harare when we have a council and warn that this catalyses corruption and bad governance. The Zimbabwe Anti-Corruption Commission must conduct an investigation considering the circumstances around the signing of the MoA, the exploitative nature of the deal and its implications on council revenue and financial standing,” added Kumalo.
Harare North MP Allan Norman Markham is leading a legal effort to have the contract cancelled.
In a High Court application filed in April, Markham, who is joined by the Combined Harare Residents Association, the Borrowdale Residents and Ratepayers Association and the Centre for Alternative Development Trust, argues that a council meeting held on February 28, 2022, which passed a resolution to approve the Geogenix contract was not properly constituted.
Markhan argues: “The contract creates serious financial obligations for the City of Harare in foreign currency for a period of 30 years. It is common cause that Harare’s waste collection costs are actually in the local currency and there is a huge disparity in the exchange rates of the local currency and the United States dollar.
“The City of Harare does not have capacity to meet this obligation without falling deep into an intractable debt trap or resorting to other developmental funds. The cost of the project is unsustainable.”
Markhan, a former Harare councillor, said the City of Harare does not have capacity to meet the delivery of the minimum quantity of the waste in terms of the contract.
He told the High Court: “This is because of a number of reasons including that it does not have enough trucks for waste collection and delivery. It is common cause that the City of Harare is currently failing to collect waste from several places in Harare due to shortages of trucks… The implication of the city’s predicament is that it has no capacity to deliver the stipulated tonnage of waste and therefore the contract is set up to fail.
“The failure of the City of Harare to deliver the required tonnage would however not excuse it from paying Geogenix. In fact, assuming that the City of Harare fails to perform its obligations, which is highly likely given its incapacitation, Geogenix may choose to terminate the contract and walk away with US$3.5 million for nothing… It is not an exaggeration to say that the contract is designed to fail on the part of the City of Harare, exposing it to an unnecessary claim from Geogenix running into millions of US dollars, which will be paid for from money generated from ratepayers and devolution funds.”
The matter is pending.
