Controversy around the Mzimvubu River Project funding

Questions are being asked about a project on the Mzimvubu River.

There have been some disagreements about who should finance the project. There has been an offer from China but a grey area persists over the terms involved.

Minister of Water and Sanitation‚ Nomvula Mokonyane is arguing that the water is needed for sugar farming.

Mike Muller, Adjunct Professor at the University of the Witwatersrand tells The Midday Report stand-in host, Ray White that what was initially announced was the intention to develop water resources on the Mzimvubu River - and not this particular project.

This project has been sold by Minister Mokonyane as something that will create lots of agricultural opportunities, generate hydropower and provide water to millions of people.

Mike Muller, Adjunct Professor at University of the Witwatersrand

What the minister failed to tells us is that Eskom doesn't want the electricity, agricultural experts don't want it, so she wants to spend R20 billion building something that isn't clear whether it will be used. Now worse than that, she wants to get the money from China.

Mike Muller, Adjunct Professor at University of the Witwatersrand

Muller says Mokonyane wants to get funding from China because National Treasury said it doesn't have that kind of money for this project. He goes on to the say the problem with borrowing from China is somebody has to pay it back and China wants their companies to build most of the dam and supply some 50% of its value.

What we have is a project that doesn't make sense, says Muller.

And the minister to get around Treasury thought she was clever and went and talked to the Chinese. And of course the Chinese said well if you want to borrow and use our people we'd be very happy but can Treasury please sign a guarantee that the loan will be paid back.

Mike Muller, Adjunct Professor at University of the Witwatersrand

In other words Treasury is to going to pay for something they said they couldn't fund in the first place adds Muller.

Listen to the full interview in the audio clip below:


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