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Minister Chombo

Innocent Ruwende Municipal Reporter
Harare City Council could lose 733,9 hectares of land worth millions of United States dollars for terminating a contract it entered with Augur Investments to build Airport Road.Ironically, council opted out of the deal when it became clear Augur did not have capacity to complete the project.

The deal, which has always been shrouded in controversy, was signed in 2008 and the project should have been completed in 2010.
So far, Augur Investments has only completed a small stretch of the road, which it claimed cost US$20 million.

The total project cost was put at US$80 million, which is several times above what local experts say it should cost.

The contract was a barter deal between Harare and Augur in which the firm received 733,9 hectares of land in stands around the city as part payment.

Augur has insinuated that the land it got is worth US$20 million, and so it is content to do work worth that much.
The firm got land in Borrowdale to build the Zimbabwe Mall as part of the barter deal.

Questions abound on why the city engaged the firm when it was clear that its costing for the 20km stretch of road was on the high side when compared to similar projects.

It has emerged that the costing was actually done in South Africa by “pricing experts” not well-versed with the terrain and the actual requirements for construction in Harare.

Local Government, Public Works and National Housing Minister Dr Ignatius Chombo yesterday said Government was unhappy with the whole project.

“Government will give the deal to an institution with the capacity,” he said.  “We are handing over the project to the Zimbabwe National Road Administration so it can complete the project.”

Dr Chombo said he was not privy to the monetary details of the contract, referring questions to Harare Town Clerk Dr Tendai Mahachi.
Dr Mahachi confirmed that Augur Investments failed to meet its end of the bargain.

“The road is now going to be completed by the Ministry of Transport (and Infrastructure Development) together with Zinara,” he said.
“Pursuant to that new development, the city is going to assess the work done so far and finalise the payment accordingly.”

West Property Company chief executive, Mr Michael van Blerk, who represents Augur Investments, said he was unaware Zinara would now complete the road.

“We are not aware of that, we thought the city would have the courtesy of informing us,” he said.

Mr Blerk said they would continue with the Zimbabwe Mall project because “we have already completed US$20 million worth of work at the Airport Road”.

He did not give a clear explanation on why they settled for a foreign company to do costing for Airport Road.

“There was nothing wrong in consulting a foreign company, after all we are a foreign company,” he said. “We felt that the company had the expertise required in constructing the road.”

But local experts say that the deal “stunk to high heaven” from the beginning. They say hiring foreign “experts” was meant to hide corruption that might have taken place in the contract.

Their claims are buttressed by the fact that far bigger projects, like construction of the 77km Ngezi Road in Chegutu by Zimplats, cost only US$19 million, yet it is structurally one of the best roads in Africa and can carry massive road trains.

Some experts said there was a need for a probe on why US$80 million was charged for a 20km road.

Former Harare employee and engineering expert, Mr Simon Bere, said the deal did not go through an open tender process and people only got to know of it after signing.

“People who get information are those who are party to the institution (Harare City Council) that are in charge of projects,” he said. “It is more like insider trading as there was no participation of outsiders and this compromises the project.

“The issue of inviting foreigners when there are capable pricing experts in Zimbabwe, is an unfortunate incident. The price itself does not make any logical sense.”

Another expert said the deal was opaque and riddled with overpricing. He said total investment in the project was far less than US$80 million.

But Dr Mahachi said council had no choice but to deal with Augur Investments.

“During the period the project was awarded to Augur Investments, Zimbabwe was using the Zim dollar and it was difficult to attract investors given the fragility of the currency,” he said. “The land used in the swap was priced in US dollars and it naturally became attractive for the investor.”

He justified the US$80 million project cost saying: “This is because there is a 700 metre dual carriage raised motorway on the road that will span across the railway marshalling yards, the road is dualised, there will be overhead bridges across Harare Drive, St Patricks, George Road and Dieppe.

“At all flyovers, there will be slipways leading into existing residential properties. There is also the issue of compensation to the people that are being moved from the road reserve.”