The Harare City Council could have been prejudiced of roughly US$1,5 million when it paid inflated sums for rehabilitation of Firle Sewage Works, it has emerged.
This allegedly occurred under the watch of then town clerk Dr Tendai Mahachi, who headed the capital city’s local authority between 2007 and 2015.
Acting town clerk Mrs Josephine Ncube detected possible anomalies around the project when she assumed office, and a probe committee subsequently alleged malfeasance.
The committee — comprising lawyer Mr Francis Nyamayaro; Engineer Israel Rwodzi; financial specialist Mr Clifford Mteneri; and councillors Joshua Nyatsuro, Joseph Rose, Samuel Chinyowa and Luckmore Mangawa — is working with the Zimbabwe Anti-Corruption Commission on the matter.
Council spokesperson Mr Michael Chideme would not be drawn into commenting, saying he “was out of town”.
However, a report, seen by The Sunday Mail, alleges that Town House awarded South Africa-based Energy Resources Africa Consortium, trading as Port River, the US$13,8 million tender unprocedurally.
It says there was no clear tendering criterion when Dr Mahachi’s team invited bids.
The committee established that ERAC was awarded the tender ahead of Specgas, whose charges were US$1,5 million cheaper.
The then Harare Water director Eng Christopher Zvobgo told the committee that Specgas lost because it did not have a bid bond.
But the committee determined that ERAC, which had a bid bond, was unregistered and had no tax clearance.
The report reads, “Given that Specgas was cheaper and had indicated that they had a bid bond from Stanbic Bank, which is a reputable bank, surely a simple phone call would have verified the position. Considering the two omissions, one would rather deal with a registered entity that could easily verify their existence and purported bid bond rather than an entity which was not lawfully registered.
“One of the alarming observations made by the committee was that there is no record of council having done its own costing of how much rehabilitation of the digester would have —cost had council decided to go it alone. There is no evidence that it was cost effective for council to engage a third party when it was possible that for a fraction of the money charged by the contractor, they could have bought all the necessary equipment and applied the internal skills with minimum sub-contracting.”
The committee queried why ERAC was not disqualified, and the rationale behind the change of its name to Port River.
Section 200(10)(a) of the Urban Councils Act (Chapter 29:15) states that councils should give compelling reasons why a selective tender is appropriate over a public tender.
In a selective tender, bidders are selected by approaching the potential tenderers while in an open tender, an invitation is published in the Press followed by tender verification and adjudication.
However, the local authority, the report says, did not do so with ERAC. It also did not set a threshold of what could go to selective tender since such a tender should have an upper limit.
In addition, Town House did not conduct financial adjudication, detailing financial comparisons of bidders.
Finance manager Mr Godfrey Kusangaya explained to investigators that the Harare Water finance division was only involved at payment stage.
After awarding the tender, council paid US$300 000 per month to ERAC without consulting the finance department, allegedly on Dr Mahachi’s instruction.
The investigation report reads, “One wonders who discussed the payment plan and why the finance department was not in the picture. Further, if one were to look at the payment plan submitted to the council in terms of the procurement board minute of March 22 2011, the computations do not tally.
“Also problematic was that there was no contract signed between the city and the contractor. There was no contract signed thus one wonders what was governing the relationship. At some point the chamber secretary actually advised that the contractor should cease operations until a contract was drafted. However, this advice seemed to have fallen on deaf ears.”
Investigators also unearthed that in November 2012, Harare City Council entered a joint venture with Harare Gas (Private) Limited – owned by ERAC directors Messrs Dave Mashayamombe and Harold Crown – for establishment of an energy production plant at Firle and Crowborough.
The special investigation committee also raised a red flag regarding Mr Crown’s contracts for treatment works given that he was involved in Crowborough Works via Cemo Pumps when the main contractor was Sidal Engineering, and on Firle via Port River with ERAC as the main contractor.
“One could be forgiven for suggesting that the money council was paying to ERAC was to be used by Harare Gas to fund its own part of the joint venture. Clearly the City of Harare could have invited potential partners and made rehabilitation of the digesters part of the gas production component.”
The investigation committee said ERAC did not even have a workshop and some of the equipment used belonged to the city council.
Some of the equipment was sent to South Africa for servicing — work investigators said could have been done locally.
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