Zesa Holdings continues to incur huge costs for the storage of equipment acquired from an Indian firm under a shady deal that is subject to an ongoing probe. The transformer manufacturing equipment was supplied to ZENT Enterprises, a unit of Zesa, which specialises in the manufacturing of transformers for domestic use and for export.As The Herald Business reported before, the equipment was part of a $16 million consignment delivered to ZENT without orders being raised for it or specifications to suit project needs.
The power utility, left agonising after its proposal for a 14,69 percent increase in the power tariff shot down by the regulator, this week said tight fiscal latitude will put the group under strain.
But Zesa continues to doll out huge amounts of money every year in demurrage fees for the millions of dollars worth of idle equipment whose fate remains a subject of conjecture.
A source said the Ministry of Energy and Power Development recently demanded details of all procurement transactions since 2005, which also covers the deal with PME of India.
“The ministry requested details of all transactions starting from 2005, but did not indicate for which particular period. We gave them everything, but some not in detail,” said the source. There still is stock of the equipment supplied by PME. Part of the equipment is still at the warehouse owned by ZENT, but the warehouse is manned by ZIMRA,” the source said.
While the power utility’s public relations department had promised a response to questions sent on Monday, no response had been received by the time of going to print yesterday.
It is understood that while ZESA’s transmission and distribution unit, ZETDC, would buy the equipment, it either has no capacity to buy the equipment or cannot find use for the equipment. While the issue has not been finalized, sources said the manner in which the deal was executed showed blatant disregard of rules and corrupt tendency involving senior executives.
The auditor general’s report suggested that possible connivance between officials from the two firms benefitted in the multimillion dollar.
The officials allegedly took advantage of a technology transfer agreement between ZENT and PME, which was supposed to run up to 2010, but was extended by a further five years.
Ms Chiri pointed out then that there were a number of apparently irregular features to the deal, which include supply of equipment outside of amounts raised in specific orders.
“These extra goods are for projects which have not commenced or are not on order. This has resulted in the creation of a consignment at Ardbennie location to cater for these items,” she said. While ZENT received equipment not ordered for and paying demurrage costs for their storage, PME would also send official to Zimbabwe, with the power utility meeting their travel costs.