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Leonard Ncube, Victoria Falls Reporter

THE Zambezi River Authority (ZRA) says notable progress has been made in the development of Batoka Gorge Hydro Electric Scheme (BGHES) and Kariba Dam rehabilitation despite effects of the global Covid-19 pandemic.

Dr Gloria Magombo, who is Zimbabwe’s Permanent Secretary for the Energy and Power Development Ministry, revealed this in her capacity as ZRA co-board chair in the 2020 annual report and financial statement for the organisation.

She said Kariba Dam maintenance continued to be given priority as prescribed in the standing operating procedures manual, including annual clean up and repair works. Despite the unavoidable delays caused by halting of works, which lasted for several months due to the Covid-19 pandemic, much of the tasks were executed in good time. 

“Kariba Dam rehabilitation work continued throughout the year and the authority made tremendous progress under the two components namely the plunge pool reshaping and spillway gates refurbishment,” she said. “Completion of plunge pool reshaping has been postponed from December 2021 to May 2024 while spillway gates refurbishment, which commenced in September 2019 will be completed in December 2023.

“The authority made tremendous progress in the planned development of the Batoka Gorge Hydro Electric Scheme preparatory studies, pre-development activities by the developer, land acquisition for the project and mobilization of project finances,” she said.

Dr Magombo, however said the authority experienced an adverse liquidity situation due to non-settlement of water sales invoices by Zesco Limited and Kariba Hydro Power Company.

She said foreign exchange control regulations in Zimbabwe also restricted access to authority funds held in commercial banks in the country. 

Dr Magombo said ZRA continues to engage the two utilities with a view to ensuring that they settle their outstanding obligations.

“The financial performance during the year under review echoes the deliberate governance efforts, which were aimed at addressing the authority’s mandate of contributing to the economic, industrial and social development of the republics of Zambia and Zimbabwe through the efficient and prudent utilization of the Zambezi River, along shared border between the two countries,” said Dr Magombo. 

“During the year, the authority’s operating income was US$23,70 million compared with the budget of US$19,09 million, giving rise to a favourable variance of 24 percent. This was as a result of the quantum of water availed to the two utilities Zesco Limited and Kariba Hydro Power Company. 

“The combined water utilization was 36,92 billion cubic metres against an allocation of 27,00 billion cubic metres.”

Dr Magombo said the operating expenditure was US$11,72 million against a budget of US$19,71 million, resulting in a favourable variance of 40 percent. This represented a budget performance of 60 percent attributed to among other factors, the outbreak of Covid-19.

As a result of the non-settlement of water utilisation invoices, she said the total receivables from the two utilities amounted to US$47,48 million while the ring-fenced funds held in Zimbabwe were US$16,20 million, bringing the total amount of funds the authority could not access to US$63,68 million.

She said ZRA’s liquidity ratio continued to show a good outlook of 2,09 times of current assets which could cover the existing liabilities. 

However, when the inaccessible funds mentioned above were removed, the acid test ratio was about three percent of current liabilities that could be covered by liquid assets, and this underscored the precarious liquidity situation the authority was facing, added Dr Magombo.

In that regard, she said the full range of obligations that the authority was yet to discharge stood at US$34,6 million with the main components being payment in respect of the Kariba Dam Rehabilitation Project loans and retrenchment packages for employees in Zambia, which accounted for 48 percent and 25 percent respectively.

@ncubeleon