The Sunday Mail
The GOVERNMENT has blacklisted contractors that were charging outrageous prices, amid revelations that two companies won tenders to supply laptops and desktops to Parliament for over US$9 000 and US$3 000 each, respectively, before the authorities stepped in to block the shady deals.
In addition, the Government is finalising a public procurement audit to authenticate prices that were submitted by suppliers whose payments were withheld.
Contrary to misconceptions that Treasury had withheld payment to all suppliers of goods and services, the suspension applies to only a third of providers accused of inflating prices, with the authorities ready to resume disbursements once prices are adjusted.
Travel agencies, food and beverages providers, computer traders and players in the hospitality industry are among the blacklisted suppliers.
In an interview on Thursday, Permanent Secretary for Finance and Economic Development, Mr George Guvamatanga, told this paper that the Government would continue withholding payments to suppliers charging exorbitant prices
“Government never stopped paying its contractors and suppliers. There is a misconception that Government has stopped paying for goods and services supplied. We are not only paying suppliers who are inflating their prices.
“These are suppliers who have been pegging their prices using the parallel market rates and we will not be paying them until they adjust their prices. And these contractors make up only 30 percent of all the contractors that we normally pay. We are still compiling the amounts that we owe. However, I can say that Government has the money to pay them,” he said.
Mr Guvamatanga said some suppliers were inflating prices by over four or five times the market value.
“In other countries, Government, being the biggest buyer, would be getting discounts but it is different here because suppliers inflate their prices. For example, a company wanted to supply printers to one of the Government Ministries for $1,4 million each. The same printers are going for $400 000 in the market.
“Some were quoting a kg of economy beef for US$18,45 and a kg of chicken for US$12. Some in the hotel industry were quoting $168 000 a room and US$89 for breakfast alone.
“Travel agents were supplying tickets to Victoria Falls for US$769. What is important to note is most of these suppliers demanded their dues in local currency, which would then be converted to US dollars.”
He added that the fall of the local currency on the parallel market some months ago was caused by excess money created from exorbitant prices charged by suppliers.
“We have closed the source that was being exploited by suppliers. There was artificial demand that was created by suppliers who were charging exorbitant prices to Government and taking the money to the parallel market. The reduction in demand will also be seen in supermarkets because there is no excess money in the economy. The reduced demand will also redress the pricing system in the economy,” said Mr Guvamatanga.
In an interview, Reserve Bank of Zimbabwe governor Dr John Mangudya said: “The stability in the market is good for the economy, for both business and consumers. It’s good for planning purposes and for engendering the value of our local currency, which is critical for price stability.
“The measures have also caused a convergence of the willing-buyer, willing-seller exchange rate with the parallel exchange rate, which had now appreciated to $600 for one US dollar on the street.”
On Wednesday, Mr Guvamatanga, blacklisted two companies, Blinart Investments and Mid-End Computers, which were charging Parliament US$9 264 and US$3 076 for a laptop and Desktop computer respectively.
In a letter to the Clerk of Parliament, Mr Kennedy Chokuda, dated September 14, Mr Guvamatanga said the tender was unacceptable.
“Notwithstanding the high prices, this tender award is in complete disregard of the Treasury minute dated 3 August 2022, directing line ministries to ensure value for money for Government and, hence, to rationalise all procurement processes with the view to operating within the confines of the willing buyer, willing seller foreign currency exchange rate.
“In this regard and to ensure value for money for Government, in line with the Public Finance Management Act (Chapter 22: 19) which empowers Treasury to manage and control public resources, Treasury directs that this tender be cancelled and the concerned suppliers blacklisted from any future Government procurement process,” the PS stated.
In a statement yesterday, Mr Chokuda said Blinart Investments and Mid-End Computers were cleared by the Parliament’s Evaluation Committee and Special Oversight Procurement Committee as having met the criteria among the lowest prices submissions.
Mr Chokuda said the tender was,however, cancelled on account of the inflated prices.
“However, while all the procurement processes had been adhered to and cognisant of the need to exercise prudence and probity in all procurement processes, our due diligence processes highlighted that the prices were highly inflated. It is at this particular point that, on Friday 9th August 2022, I as the accounting officer directed the Parliament’s Director Procurement Unit in the presence of Director Audit to initiate cancellation of the tender and proceed with retendering as the quoted prices were not justified.
“It is in this regard that no contract has been signed with any of the two companies and no payment processes have been activated in respect of the two suppliers.”
Last month, President Mnangagwa said accounting officers who fail to detect pricing malpractices would be deemed criminally negligent and held personally liable in terms of the Public Finance Management Act while suppliers who generate invoices based on black market exchange rates would be banned.
Asked whether the Zimbabwe Anti -Corruption Commission will initiate investigations on malpractices in public procurement, the anti-graft body’s spokesperson, Commissioner John Makamure said:
“I will have to check with the secretariat if they are working on such cases.”