New private deal to find Bulawayo dam may relieve water crisis

A US$126 million plan to build a new dam for Bulawayo could finally ease the city’s long-running water crisis, but the private financing model may leave residents paying up to three times more for water.

The proposed Glass Block Dam, to be built in the Umzingwane Catchment area, is being promoted by a private consortium led by JR Goddard, project managers Sesani, and financial advisors Genesis Global Finance under a Build-Operate-Transfer (BOT) model.

Under the proposed deal, Bulawayo and the consortium would enter a 25-year water purchase agreement with ZINWA.

The city would own the dam wall, but the dam itself would belong to ZINWA under the Water Act, according to a new report which has just been tabled in Parliament by a joint committee of MPs.

Funding is expected to come from the African Development Bank (AfDB) and Afreximbank.

To recoup the investment, according to the report, water from Glass Block will cost Bulawayo City Council up to US$0.90 per mega litre, nearly triple the current US$0.33 per mega litre charged by ZINWA.

“The astronomical charge of water proposed by the Glass Block consortium of US$0.99 cents per mega litre will have a catastrophic impact on the water billing system of Bulawayo, causing severe overcharges on the end users,” the MPs say.

In Zimbabwe, where the state has failed to directly fund large-scale infrastructure, BOT is a pragmatic option. But there’s a trade-off; cost recovery.

Although the dam’s developers are reportedly exploring ways to cut the proposed charge to US$0.50, MPs warn that even this is still too high for the average resident.

“It is imperative that the arrangement of the water service charge be significantly revised before making any headway towards giving the project the green light.

“Water is a basic human right and should not be commercialised in any way whatsoever to the detriment of its access by the citizenry,” the report says.

BOT alternative
The Gwayi-Shangani project was the big hope for Bulawayo. But government’s payment delays have slowed progress.

The project needs another US$84 million to complete the dam wall and US$684 million more to lay a 252km pipeline. So, the city is looking at the smaller Glass Block as a faster alternative.

“The Glass Block Dam is presumed to ease pressure from the government coffers and give the government breathing space to focus on the demanding Gwayi-Shangani Project,” the report says. But the report also reveals the risks of BOT.

Because developers have to recover their investments within a limited operating window, tariffs must be set high enough to guarantee returns, even for basics like water.

The Glass Block Dam consortium had initially sought funding from the US government’s International Development Finance Corporation (DFC). But DFC turned them down, saying it does not fund projects in Zimbabwe.

This pushed the consortium to approach AfDB and Afreximbank, with the backing of Bulawayo mayor David Coltart.

That they appear to have secured alternative financing is a win for the consortium. But the burden now shifts to ratepayers already facing high service charges and erratic supply.

Bulawayo: Between drought and debt
Bulawayo’s water crisis is urgent. Three of its key dams—Umzingwane, Upper Ncema and Lower Ncema—are dry.

Aquifers and smaller dams offer only limited relief. Gwayi-Shangani, which was meant to be the long-term fix, is years behind schedule.

Once completed, Gwayi-Shangani would supply 220 megalitres of water daily, above Bulawayo’s current daily demand of 165 megalitres.

But without funding to complete the wall, pipeline, and associated infrastructure, including the 10MW hydropower plant, the city remains dry.

For now, with a new BOT deal on the table, Bulawayo residents are caught between dry taps and high coswire.

NewZwire