News / National
Bulawayo risks losing $100,000 in dodgy deals
05 Oct 2017 at 01:52hrs | Views
THE Bulawayo City Council (BCC), which recently lost $300 000 to some brief case companies, risks losing nearly $100 000 more after engaging in a dodgy deal with a South African company that is now failing to supply a cremation machine.
According to the latest council minutes, council made a $97 120 down payment for a cremator which is now being held by the South African Revenue Authority due to the supplier's failure to pay taxes.
BCC applied for R120 000 from the Reserve Bank of Zimbabwe, but the application for foreign currency was turned down after the South African company failed to produce relevant documentation.
"However, efforts to pay the costs could not go through because the Reserve Bank had requested certain information from the contractor which information he could not produce because the company was currently not operating," reads the report.
"Having hit a brick wall the matter had been referred back to management which sought audience with the contractor's lawyers. It had been confirmed that the cremator was in Durban. Council had paid the contractor $97 120 deposit and chances of recovering these funds were very slim."
The local authority has since resolved to take over the contractual obligation of bringing the machine to Bulawayo to avoid major losses.
"In order to mitigate our loss, management was proposing that council take over the contract from Durban to Zimbabwe including the installation. If the contract was cancelled, council stood to lose the deposit paid. A new tender would cost council more than taking over the current one. Most of the costs outstanding would remain there whether the contract was cancelled or not. It was better to pay a little more than to lose $97 120. It was therefore recommended that council take over the contract and the costs," reads the council report.
In July, the council conceded that it lost more than $300 000 to Harare companies in an ambulance procurement deal in 2010 after paying for the supply of six ambulances that were not delivered and subsequently it proved difficult to locate the companies.
According to the latest council minutes, council made a $97 120 down payment for a cremator which is now being held by the South African Revenue Authority due to the supplier's failure to pay taxes.
BCC applied for R120 000 from the Reserve Bank of Zimbabwe, but the application for foreign currency was turned down after the South African company failed to produce relevant documentation.
"However, efforts to pay the costs could not go through because the Reserve Bank had requested certain information from the contractor which information he could not produce because the company was currently not operating," reads the report.
The local authority has since resolved to take over the contractual obligation of bringing the machine to Bulawayo to avoid major losses.
"In order to mitigate our loss, management was proposing that council take over the contract from Durban to Zimbabwe including the installation. If the contract was cancelled, council stood to lose the deposit paid. A new tender would cost council more than taking over the current one. Most of the costs outstanding would remain there whether the contract was cancelled or not. It was better to pay a little more than to lose $97 120. It was therefore recommended that council take over the contract and the costs," reads the council report.
In July, the council conceded that it lost more than $300 000 to Harare companies in an ambulance procurement deal in 2010 after paying for the supply of six ambulances that were not delivered and subsequently it proved difficult to locate the companies.
Source - chronicle
