Business / Companies
Broke NRZ loses $2million to suppliers
08 Oct 2014 at 06:39hrs | Views
THE cash-strapped National Railways of Zimbabwe could have been prejudiced of $2 million after suppliers paid to provide goods failed to do so, according to a 2012 audit report released by Auditor General Mildred Chiri yesterday.
The NRZ flouted procurement procedures after it made payments to suppliers before they had delivered the goods, according to a recent audit report.
'The organisation awarded tenders to a number of suppliers through the State Procurement Board. Upon awarding the tenders, prepayments amounting to $1.9 million were made to five suppliers who ended up not meeting their service/supply obligations to the organisation," reads the report.
But in its response, management said due to the economic environment in the country, some reputable companies who had been supplying NRZ for a long time faced difficulties and failed to deliver.
'The system of purchasing, including vetting of suppliers, has been strengthened and the necessary guidelines developed in conducting due diligence tests.
Bank guarantees are now being sought before prepayments are sought. However, it should be borne in mind that NRZ can only recommend to the SPB and has no power to stop, let alone overturn its decisions," said management.
The NRZ flouted procurement procedures after it made payments to suppliers before they had delivered the goods, according to a recent audit report.
'The organisation awarded tenders to a number of suppliers through the State Procurement Board. Upon awarding the tenders, prepayments amounting to $1.9 million were made to five suppliers who ended up not meeting their service/supply obligations to the organisation," reads the report.
But in its response, management said due to the economic environment in the country, some reputable companies who had been supplying NRZ for a long time faced difficulties and failed to deliver.
'The system of purchasing, including vetting of suppliers, has been strengthened and the necessary guidelines developed in conducting due diligence tests.
Bank guarantees are now being sought before prepayments are sought. However, it should be borne in mind that NRZ can only recommend to the SPB and has no power to stop, let alone overturn its decisions," said management.
Source - Chronicle
