Council in $13m sewer tender scandal US dollars
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Innocent Ruwende Municipal Reporter—
HARARE City Council has been accused of awarding a $13,8 million tender for the rehabilitation of Firle Sewer Works to an unregistered company with no capacity to carry out the work, an audit has revealed.

Council awarded the contract to a local company, Energy Resources Africa Consortium (ERAC), which was not formally registered and has been paying the firm millions of dollars since 2011, although the two parties did not have a contract.

The company has so far been paid over $5 million. The city set up a seven-member team to probe the deal, valued at $13,8 million, which was supposed to start in April 2011 and end in October last year. The team comprised four councillors and three external experts — an engineer, a lawyer and an accountant.

Presenting the findings at a Special Council Meeting on Thursday, chairperson of the team Councillor Joseph Rose said there was no clear-cut criterion as to how the companies invited to tender were selected.

“It was said by Harare Water manager Eng Simon Muserere that the companies that were selected to participate in the tender had done business with the city at some point. What is particularly of concern is that ERAC had no history with council projects and how they got on the list of contractors to rehabilitate digester when initially ERAC had wanted to be involved in the gas production project is unclear.

“In terms of ability to undertake the project, the documents that were submitted by ERAC did not show that it had any capacity to deal with the project. Going through their bid document particularly its profile one finds that there is no mention of any work that it had done itself,” he said.

He said in their bid ERAC stated that some of the prices “can only be given after determination of scope of work when the tender has been awarded” meaning that council was going to end up paying more than the $13,8 million. Clr Rose said the computations of the payment plan as submitted to the city in terms of Procurement Board minutes of March 22, 2011 do not tally.

“With monthly instalments of the $250 000 per month it was estimated that this would take three and half years with council having to pay 10 percent preliminary and general expenses of $1 381 612 within the first two months.

“The total would come to $11 881 612 with a variance of $1 934 505. The second option was for council to pay $300 000 for four years. The result would be that council would be paying $14 400 000 which would be $583 882 more than the quoted price,” he said. He said there were no explanations for the variance and also problematic was the fact that there was no contract signed between the city and the contractor.

Clr Rose said it was remarkable that the city went on to sign a joint venture agreement between itself and Harare Gas Limited, a company that was formed by the ERAC directors for the establishment of energy production plants and Firle and Crowborough and the formation for a joint venture company called Harare Waste to Energy Company.

Strangely, the agreement provided that the city was to upgrade, refurbish and maintain the current infrastructure at Firle.

“This is problematic as the project to rehabilitate Firle was not yet complete and this had been made to be a separate project which was awarded to ERAC, a company whose principals were Dave Mashayamombe and Harold Crown. One could be forgiven for suggesting that the money that council was paying ERAC was to be used by Harare Gas to fund its own part of joint venture.”

“The committee noted that the contractor did not have his own workshop and that some of the equipment being used belonged to the city. There was equipment which was awaiting to be transported to South Africa for works which the committee felt could be done locally,” he said. Councillors who adopted the report called for the prosecution of the company directors and some officials who participated in the deal.

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