Harare City Council and its partner in the EasiPark parking management business, EasiHold (Pvt) Ltd, are accusing each other of clandestinely opening bank accounts to divert funds from the joint venture. EasiHold placed an advert in the Press on February 27 in which it claimed the city unlawfully opened an alternative bank account and diverted funds from EasiPark Harare.
In response, the city’s corporate communications division yesterday said the council had never acted unlawfully in its relationship with EasiHold.
“EasiHold assigned its rights in the joint venture to a company called Servest without disclosure to and consent of City of Harare in breach of the joint venture agreement,” said the council. “Easihold transferred money from EasiPark Harare to fund its new parking business venture in Nigeria.”
According to their contract, EasiHold was supposed to procure, install and maintain – at its own cost – parking meters.
“In breach of the agreement, EasiHold is hiring the equipment from a South African company and the hire charges were being paid by Easipark Harare. This shows that Easihold did not invest in the joint venture business,” said the municipality.
During arbitration of their dispute, it was agreed that each shareholder would meet its own costs, but the City of Harare said it had evidence that EasiHoold’s arbitration fees were paid by EasiPark Harare.
The local authority also accused EasiHold of persistently refusing to co-operate with auditors.
This resulted in the auditors failing to conclude their assignment for 2010, 2011 and 2012.
But EasiHold said it was the city council that opened a bank account into which it deposited proceeds from EasiPark.
“This was done without notice and consultation with EasiHold and this meant that the City of Harare and EasiPark Harare could administer all operations and funds within EasiPark Harare unilaterally and without the approval or knowledge of EasiHold,” said the company.
Harare terminated the deal with EasiHold alleging it was not getting mileage out of it.
The case went for arbitration and the council was ordered to reinstate the agreement.
Meanwhile, the council this week received 10 tractors valued at US$345 000 bought under a US$144 million loan facility from China.
Acting Mayor Clr Chris Mbanga received and commissioned the tractors.
He said the tractors would be shared equally between Harare Water and the Department of Housing and Community Services.
“These tractors were bought locally and they are part of our efforts to improve service delivery in Harare. We will make good use of them. We are working at having a tractor for each of the city’s wards,” said Clr Mbanga.
Town Clerk Dr Tendai Mahachi said more equipment bought under the Chinese loan would be commissioned as it arrived in the country.
There were allegations recently that Harare City Council officials could have pocketed more than US$100 million through inflating prices of equipment bought under the US$144,4 million loan agreement from China whose contract to refurbish water and sewage treatment plants was awarded to a Chinese company.