Zimbabwe Tender Board Admits to Flouting Regulations

Republic of Zimbabwe Minister of Justice and Legal Affairs Patrick Chinamasa. Zimbabwe has recently declined funding for the upcoming elections from the United Nations., a photo by Pan-African News Wire File Photos on Flickr.

Tender board admits to flouting regulations

March 21, 2014
Tendai Mugabe and Lloyd Gumbo
Zimbabwe Herald

Government has established a Cabinet Committee to monitor the State Procurement Board to ensure transparency. This follows reports that some undeserving companies were being awarded multi-million-dollar projects through corrupt dealings.

The development comes as the SPB yesterday conceded it did not follow proper procedures when it allowed a Zesa subsidiary — the Zimbabwe Power Company — to engage two losing bidders for solar projects because it sought to address national security concerns.

SPB chairperson Mr Charles Kuwaza said following proper procedures would have taken longer, thus frustrating the country’s objectives of reducing power deficits.

Government has unearthed serious malpractices in the bidding system, which resulted in firms awarded tenders failing to complete projects owing to lack of capacity.

In some cases, tenders were being awarded to shelf companies that would then outsource the project and/or seek equipment from other firms after having claimed to have capacity to do the work tendered for.

The new Cabinet Committee on Infrastructure and Utilities is chaired by Finance Minister Patrick Chinamasa.

Addressing the media in Harare on Tuesday, Minister Chinamasa said the committee’s primary task was to ensure transparency in the tender system.

“We have set up a number of committees since we came in as a new Government,” he said.

“One of them is the Cabinet Committee on Infrastructure and Utilities which I also chair. We want more transparency and we will be keeping our eye on everything that takes place: that we can assure you. We want value for money.”

Minister Chinamasa said many Asian countries preferred that if they extended a loan for a project in Zimbabwe, the contracts should be awarded to companies from their countries registered here.

“So, if we got a loan from China we tender it among Chinese companies and if we get a loan from India we tender it among Indian companies,” he said.

“I am talking here about contractors, say to put power generation, and again this is to enhance transparency in the manner in which we transact business.”

Government, Minister Chinamasa said, was going to appoint new boards for most public companies as part of the anti-graft drive.

“As we go into the future, first we should have a situation where we have increasingly new boards,” he said. “At the end of the day we are going to leave a template for each institution on the basis of which it should be guided as it moves forward.

“Some of these we are going to be legislated so that anyone who breaches these corporate governance practices will find himself or herself in trouble.”

Meanwhile, SPB chair Mr Kuwaza said the board had, in the case of the Zimbabwe Power Company solar tender, out of necessity breached procedures.

The SPB initially turned down a request by the Zimbabwe Power Company to engage Intratrek Zimbabwe and ZTE Corporation for other projects because they wanted too much money.

China Jiangxi Corporation, the lowest bidder at US$183 million, won the tender for construction of the 100MW Gwanda/Plumtree solar plant.

Intratrek Zimbabwe and ZTE Corporation had charged US$248 million and US$358,3 million, respectively.

The two firms, which were technically compliant at evaluation stage, were said to have agreed to reduce their price to US$183 million to match the lowest bid for other projects that would add 200MW to the power grid.

Mr Kuwaza said they awarded the tender to China Jiangxi Corporation because it was technically compliant and had the lowest price.

Other bidders were Lanlake Power (US$224 million), Afriven Investments (US$287,5 million) and No 17 Metallurgical Construction (US$323,3 million).

“The ZPC went on to propose that, as a result of power shortages that this country was facing, which had become a matter of national security, it would recommend that the second-lowest technically compliant bidder (Intratrek) be considered with a view to speeding up power supply to the country,” said Mr Kuwaza.

He said they gave the green light to the arrangement because “tendering for complex projects” was a long and expensive process.

However, procurement experts queried how Intratrek and ZTE were suddenly able to reduce their bids by tens of millions of dollars, and by more than half in the case of ZTE.