Zimpapers Logo

Dr Mahachi

Farirai Machivenyika Senior Reporter
HARARE City Council denies that US$100 million could have been looted in a deal to rehabilitate water and sewage treatment plants as exclusively revealed by The Herald yesterday. The city signed a US$144,4 million deal with Export and Import Bank of China, and the contract to rehabilitate water plants was awarded to China National Machinery and Equipment Import and Export Corporation.

City authorities signed the deal that has grossly inflated equipment costs, as cited by consulting engineer Peter Morris in his assessment of the project.

Eng Morris also pointed out several other dubious arrangements that could ultimately fleece taxpayers.
The city’s denial is premised on the claim that none of the equipment for the project has been bought. Town Clerk Dr Tendai Mahachi in December 2013 said some equipment was already in the country, and some was on its way.

He said the project would be complete by the end of the first quarter of 2014, but now city authorities say final arrangements with the Chinese will only be made next month.

Further, there is pictorial evidence showing work already being done on the project.
In a statement yesterday, the city also claimed Eng Morris’ report had not been availed to municipal managers, and yet The Herald got a copy of it from a senior executive at Town House.

The council said: “The process of procurement of plant and equipment has not started. As a matter of fact the process of procuring begins in April after the initiation of the procurement process in March.

“The ordering of the equipment only starts in April after a scheduled visit to confirm the equipment by city officials.”
In December Dr Mahachi, said – during a tour of Morton Jaffray – that equipment had arrived in the country.

“Some of the containers with project equipment have already arrived as we speak and some of the equipment is on its way to Harare after having been cleared at the border,” Dr Mahachi  said.

Sources at Town House also queried the council’s denials.
“The fact is that the US$144,4 million contract was signed based on those inflated prices. The contract has not been revised, so it means council will still pay the values as contained in that contract that has the exorbitant prices,” the source said.

The council said the payments would be handled by the Ministry of Finance.
“The City of Harare generates an invoice after receiving shipping documents from the contractor. The city then passes the invoice to the Ministry of Finance for onward transmission to the China Exim Bank for payment to the contractor,” the council added.

“Eng Peter Morris approached council claiming that he had been assigned by the World Bank to evaluate whether there was duplication between the Zim-Fund Project and the Chinese project.

“Since we had nothing to hide we gave him all the contract documents. After concluding the process we expected the document to be formally submitted to the city. But, surprisingly, the alleged Peter Morris report was made available to The Herald. The City of Harare has not had sight of the document,” the statement added.

However, the Finance Ministry is making payments to the contractor based on the inflated figures provided by the City of Harare.
Further, it is implausible that city authorities have not seen the Eng Morris report as The Herald got it from a senior manager at Town House.

The manager last night insisted that the report had been circulated amongst senior executives and council could be in the process of trying to either disown it, or completely deny its existence.

Zim-Fund manager Mr Emmanuel Nzabanita yesterday said they had not contracted Eng Morris to assess the city deal, though the City of Harare in its statement says the consultant had come from the World Bank-funded organisation.

Sources said this was because Eng Morris’ brief was to check for duplications between the Chinese deal and a separate Zim-Fund arrangement.

“In the course of checking for duplications, he not only found duplications but also came across the other anomalies indicating tens of millions of dollars were in the process of being looted,” said a Town House official.

Council, however, admitted in the statement that it would not have to pay US$4 million in taxes and duties because Government accorded the rehabilitation of the plants national priority status.

“That money that was initially budgeted for duty and taxes will be ploughed back into the project,” the council said.
The former chair of the city’s finance committee, Councillor Norman Markham, also questioned the provisions of the deal saying some of the items to be bought under the loan agreement were contained in their 2014 budget.

“I shudder at the water rehabilitation deal that has been signed.
“Information technology equipment is covered in this contract which I have not seen to the tune of over US$1 million yet in the HCC budget we also had a similar budget placed for similar equipment,” he said in his resignation letter this                                                                week.