ZETDC tender raises eyebrows

prepaidmeter04janHappiness Zengeni Business Editor0—
THE Zimbabwe Electricity Transmission and Distribution Company unprocedurally awarded a multi-million US-dollar tender related to prepaid meters to Internet-service provider sister company, Powertel. This was despite the fact that the  ZETDC-Powertel deal is against conditions set by the State Procurement Board which twice cancelled the tender citing technical irregularities.

The cash-rich deal is also against Zesa’s own specifications amid concerns some senior managers were in for rich pickings in the wake of the participation of a firm which was also part of the adjudicators.

In September last year, ZETDC — through the State Procurement Board — re-flighted a tender it had cancelled in August 2012 for the appointment of aggregators for the sale of prepaid electricity units.

The tender sought companies with expertise in prepaid electricity vending to create distribution networks that make use of various technologies for sale of pre-paid electricity tokens.

Zesa introduced pre-paid metres two years ago and to date ZETDC has installed 360 000 units with the number expected to increase to 800 000 within the short to medium-term in line with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).

Purchase of pre-paid electricity tokens is only done at Zesa banking halls and at two OK Supermarkets in Harare, and at a ZETDC desk in TM Supermarket in Mutare.
Tokens are only sold during working hours and many consumers travel long distances to get to buy them.

In essence, Zesa and its subsidiary ZETDC keep a tight leash on who can sell tokens and where they can be bought.
Thirty-eight companies submitted bids to become aggregators and sell tokens.

Among the companies are firms already linked to Zesa.
One is Finmark Industries, which already has a contract to supply the pre-paid meters.

Another is Powertel and a company it recently formed, E-Solutions.
A third one is Revma, which was one of the adjudicators for the tender bidding itself.

It has emerged that when ZETDC advertised the tender in September, it issued tender documents a week late.
At the same time, Powertel issued a tender for provision of E-Vending and M-Commerce solutions.

The result of this tender was the creation of E-Solutions.
The ZETDC tender closing date was initially set for October 15 but was moved to October 23.

Well-placed sources say initially Powertel and E-Solutions were disqualified after adjudication, but the tender was cancelled on January 2, 2014 with the State Procurement Board citing technical irregularities.

The bidding firms were invited for a debriefing a week later where the State Procurement Board allegedly did not provide any meaningful explanation or justifiable reasons for cancellation of the tender.

It was at this meeting that ZETDC officials said they would put their own desks in supermarkets to sell pre-paid electricity tokens on their own.
However, ZETDC went on to give the contract to Powertel, thereby ignoring procurement rules set for State institutions and its own tender rules.

“From the rules alone, it is clear that Powertel does not fit the bill; firstly because they are a related party, and secondly because they only created a solutions company when they got wind that ZETDC would re-tender.

“From this, who is to stop anyone from thinking that there is an internal scam going on within the energy sector,” said an official in the Energy Ministry.
Powertel has one shop in Harare at Joina City and there are fears that the company does not have the capacity to meet growing demand for prepaid electricity tokens.

Powertel is targeting to roll out the pre-paid electricity vending system by February 28 at which date the pilot project with OK Supermarkets will fall away.
This is not the first time that ZETDC has been accused of bypassing procurement procedures.

Questions remain on how a US$35 million facility secured from a regional development bank was spent on equipment from India.
It is alleged that equipment for substations was bought without due process in terms of designs, specifications and approvals.

Further, it is alleged that the delivery of some of the equipment was done before the actual sites of the substations in Bulawayo and Gweru had even been identified.
In addition, it is alleged that the procurement and payments were railroaded without participation of the installer, the Zesa subsidiary Zent Enterprises.

Sources said some of the equipment was delivered without factory testing to determine its suitability Zimbabwe.
Energy and Power Development Minister Dzikamai Mavhaire this week dissolved eight parastatal boards which fall under his ministry, including ZETDC, poor corporate governance.

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