THE government has failed to secure a $30 million loan from sugar producer Tongaat Hullet meant to finance completion of Tokwe-Mukosi Dam in Chivi over water rights disagreements.
Finance minister Patrick Chinamasa last month toured the dam site where construction has stalled. He held meetings with Tongaat officials in a bid to strike a loan-for-water rights deal.
Work at the dam, which is about 80% complete, stalled in 2014 as the government owes the Italian contractor, Salini Impregilio, over $80 million for work already done, while another $30 million is needed to complete the project.
Under the deal, Tongaat was meant to finance completion of the dam in exchange for water rights for a set period.Tokwe-Mukosi is set to be the country’s largest inland water reservoir when completed.
Sources privy to the deal talks said the two parties failed to agree on the pricing of the water as well as the period which Tongaat would hold the dam’s water rights.
“The deal reached a dead end because government and Tongaat negotiators failed to agree on the price of the water and the time-frame for Tongaat holding the water rights. The government wanted a short period while Tongaat wanted a long period, meaning they were going to have a monopoly on the dam’s water,” the source said.
Chinamasa was not answering his phone when called for comment while Tongaat’s corporate communications officer Adelide Chikunguru Musvovi declined to comment referring all enquiries to the minister.