By Thandiwe Garusa
HARARE city council has been served with a default notice after failing to pay some US$780,890 to Netherlands-registered company Geogenix BV in the controversial Pomona waste-to-energy deal.
Under the widely condemned US$344 million which was initiated by government, Harare’s council is bound to hand over its Pomona Dumpsite to Georgenix for free for the period of 30 years and is then obligated to pay US$40,000 per day to dump waste it has collected at its own cost for the next 30 years at the same dumpsite.
Geogenix BV is represented in Zimbabwe by Delish Nguwaya, a businessman linked to President Emmerson Mnangagwa’s family.
The opposition Citizens Coalition for Change-led council vowed it would not pay the monthly service charges and resolved to suspend the deal pending an investigation because there is consensus that it is bad for the city.
However, Nguwaya has now served council with a default notice.
“On 2 June 2022, the City of Harare received an invoice dated 1 June 2022, issued by the company for waste management services performed over the month of May 2022 (the “May 2022 Service Fee”),” reads the notice.
“Pursuant to article 22.2.4 of the Concession Agreement, the City of Harare had 30 days to pay the May 2022 Service Fee. Having failed to do so, and in accordance with article 22.4 of the Concession Agreement, the City of Harare is liable for late payment interest.
The letter adds: “Consequently, the company is charging the prescribed interest rate of 12% as provided for by the central bank of Zimbabwe over the outstanding May 2022 service fee from 1 July 2022 per annum, applied pro rata for each day this invoice remains unsettled.
“Article 29.2 (b) of the Concession Agreement provides that ‘a failure to pay invoices for a period of more than 30 days form the moment that they become due and payable’, warrants a contracting authority event of default. In addition, thereto, we note that the City of Harare’s official actions thus far leads us to reasonably believe it does not intend to meet its contractual obligation to pay the May 2022 service fee in the short term either.”
According to the agreement, in the event of a default, remedial rights that can be taken within 90 days include either extending the construction period and thus delay the project handover delivery date, cease all services to the City of Harare or terminate the concession agreement resulting in early termination compensation amounts immediately due and payable by the City of Harare.
Harare mayor Jacob Mafume has insisted that council would not pay because the deal was corrupt.
“It is an atrocious, unsustainable deal which defies logic and any decency of morality; that anyone can do that to a community, simply put a fence around a common site and then start charging is the height of thievery and lunacy,” Mafume said.
Civil society groups have also condemned the agreement, dismissing it as “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,” said Crisis in Zimbabwe coalition.
“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.”