Harare’s US$2,9bn deal raises eyebrows

By Andrew Kunambura

The City of Harare management has come under severe criticism over its planned US$2,9 billion water deal in which a Singaporean firm called Neoparagon will invest in water infrastructure and get the lion’s share of the profits over a period of 30 years.

Eyebrows were raised over the deal after it was learnt only recently that negotiations to conclude it had reached an advanced stage and yet councillors were not even aware of it.

It only got to council’s attention by mere chance after deputy mayor for Harare, Thomas Muzuva, told councillors during a heated debate on the best solutions council could adopt to improve the water situation in the city that he had stumbled upon the deal while in the course of executing his duties.

What raised more questions was that the deal was initiated by a caretaker council headed by Harare Provincial Administrator, Alfred Tome, which temporarily ran the city’s affairs when council was dissolved in the run up to last year’s harmonised elections. Since then, the deal has been kept away from council by the City of Harare’s management.

All the resolutions of the caretaker council have never been handed over to the new council, headed by mayor, Bernard Manyenyeni. What is therefore coming out is that negotiations for the deal have been progressing under the noses of councillors since they took over almost a year ago. Muzuva confirmed the development.

He said: “Council is yet to be given that deal as we have requested but we hope that it will be availed to our two committees on Environment and Finance for scrutiny in the near future. The committee will then draft recommendations and make a decision as to whether or not the deal should proceed which they will table before a full council meeting for deliberation.”

The Ministry of Environment, Water and Climate has also professed ignorance over the deal in which, according to the few clauses availed so far, Neoparagon will bring in US$2,9 billion which will go towards the construction of three dams namely Kunzvi, Musami and Muda under a 30-year partnership. The Singaporean firm will take up 70 percent profits while the City of Harare will get only 30 percent for the entire period.

The city will resume operating as a sole water provider afterwards. The construction of the three dams has been in the pipeline for years and is expected to ease the acute water shortage in the city. Riled councillors dismissed the proposed deal as suicidal and a joke which has to be abandoned without delay. The fact that the deal was never forwarded to the new council prompted councillors to demand all the resolutions that were made during the tenure of Tome’s caretaker council.

In an interview with the Financial Gazette, Combined Harare Residents Association chairman, Simbarashe Moyo, condemned the proposed deal saying it was akin to mortgaging the city to Neoparagon. He said his association was vehemently opposed to the idea of privatising water provision to residents saying it was an unconstitutional move which would cost the majority of the residents who are already facing financial difficulties.

“We are vehemently opposed to this deal and we will go to the bitter end fighting to have it abandoned. We will soon be engaging council to encourage it not to accept such a bad move,” Moyo said. “This is a clear case of privatisation of water supply which we are against. What it means is that charges will automatically go up and we are afraid that the vast majority of impoverished residents will lose out.

“This is against the provision of the Constitution. Our Constitution clearly stipulates that water is a basic human right and every citizen has got a right to clean, safe and portable water which local authorities are mandated, by the same Constitution, to supply,” he said quoting section 77 of Chapter four of the new Constitution.

“The weird structure of the deal simply shows that the city is actually subletting the provision of water to private players. That kind of structure means that the said company will have a controlling stake and there is a real risk that they could be, for 30 good years, become the sole owner of Harare water, which cannot be accepted,” said Moyo.

Precious Shumba, director of the Harare Residents Trust, launched a scathing attack on City of Harare, accusing it of being an inconsiderate body which has run out of ideas needed to turn around the populous city.

“The origin of the deal is very controversial. There is no doubt that the city bosses took advantage of the caretaker council to introduce this deal. What else could be used to explain the fact that it was introduced only after council was dissolved and has been kept away from the attention of the council?” he quizzed.

“The City of Harare lacks the attitude of a genuine public office. Their thrust is to overwhelm residents with juicy information only meant to create an impression that they are responding to an expressed need by residents, the construction of these dams for example,” said Shumba. He dismissed the deal as a ploy by city bosses to ‘widen opportunities for institutionalised looting’ adding that it is never meant to bring solutions to the water crisis in Harare. Financial Gazette