News / National
Wicknell Chivayo deals: ZPC boss suspended
20 Dec 2017 at 18:01hrs | Views
The National Economic Conduct Inspectorate (NECI) has ordered businessman Wicknell Chivayo to avail several documents he signed with the Zimbabwe Power Company (ZPC), resulting in him being paid US$5 million pre-commencement fee for the Gwanda Solar project without a bank guarantee. The $200 million project is yet to take off three years after Chivayo's Intratrek Zimbabwe was awarded the tender.
This comes as ZPC managing director Engineer Noah Gwariro was this week suspended for 90 days by the power utility's board to pave way for investigations into Chivayo's case. Eng Gwariro has been barred from visiting his offices or ZPC premises during his mandatory leave.
NECI wrote to Mr Chivayo on December 7 requesting to be furnished with several documents that would assist in their investigation. NECI is a Government arm whose mandate is to carry out compliance checks of companies to ensure that the country is not prejudiced through prejudicial transfer pricing, as well as unfair business practices such as externalisation.
"As part of the exercise that NECI is carrying out, may you avail the following documents for inspection – all contracts/agreements entered into with the Zimbabwe Power Company, Intratrek's bank statements from January 2015 to date, cash books and all other documents pertaining to the Gwanda Solar Project and Munyati Power Station," NECI wrote to Chivayo.
"An expeditious submission of the above information will be appreciated." ZPC paid Chivayo without the businessman submitting a bank guarantee to safeguard public funds. Clause 4.2 of the contract specifies the need for a performance bond to protect ZPC against any losses in the event Intratrek Zimbabwe defaulted on the project. The contract further specifies that ZPC will release money only after receiving an advance payment guarantee.
On Tuesday last week, ZPC board chairman Engineer Stanley Kazhanje wrote a letter suspending Eng Gwariro over the Gwanda solar deal.
In his letter, Eng Kazhanje said Eng Gwariro failed to respond to issues put to him before the board that sat on December 8. He said the board meeting had "presented serious concerns regarding the management and in particular the payments made to the contractor, Intratrek Zimbabwe, with respect to the 100MW Gwanda Solar Power Station project".
Eng Kazhanje said during the board meeting, two issues stood out, namely payments made to Chivayo without the bank guarantee and payments made on the back of payment certificates from the contractor with no work to support the certificates.
"It was your explanation that the payments were made allegedly under undue pressure from the then Minister of Energy and Power Development (Dr) Samuel Undenge, which pressure was never communicated to the board or the group chief executive (Engineer Josh Chifamba)," Eng Kazhanje said.
"In view of the above and given its seriousness and gravity, as well as concerns around it, the board of directors intends to undertake investigations into the matter. Consequently, the board, in the exercise of its prerogative on leave management, has decided to place you on mandatory leave of up to ninety days on full pay and benefits to facilitate the said investigations. The above takes effect from the date of receipt of this letter."
Eng Kazhanje said Eng Gwariro should remain available to be recalled to resume duties if deemed necessary or to assist with investigations at any time. "While on leave, you are prohibited from taking up employment elsewhere," he said. "We request that you cooperate with appointed authority to carry out these investigations.
"The process is simply to enable the board to fully understand what transpired in respect of the management and execution of the contract which to this stage remains unclear to us as a board. Depending on the outcome of the investigations, a decision will be made on the way forward and you shall be informed accordingly. "Should you intend to travel outside Zimbabwe, kindly ensure that you seek leave from the chairman of the board or in his absence, the group chief executive officer."
ZPC management argues that for five months, they refused to pay Chivayo in the absence of a bank guarantee, but later succumbed to pressure from Dr Undenge. The former minister denies interference and accuses management of failing to follow laid down procedures.
This comes as ZPC managing director Engineer Noah Gwariro was this week suspended for 90 days by the power utility's board to pave way for investigations into Chivayo's case. Eng Gwariro has been barred from visiting his offices or ZPC premises during his mandatory leave.
NECI wrote to Mr Chivayo on December 7 requesting to be furnished with several documents that would assist in their investigation. NECI is a Government arm whose mandate is to carry out compliance checks of companies to ensure that the country is not prejudiced through prejudicial transfer pricing, as well as unfair business practices such as externalisation.
"As part of the exercise that NECI is carrying out, may you avail the following documents for inspection – all contracts/agreements entered into with the Zimbabwe Power Company, Intratrek's bank statements from January 2015 to date, cash books and all other documents pertaining to the Gwanda Solar Project and Munyati Power Station," NECI wrote to Chivayo.
"An expeditious submission of the above information will be appreciated." ZPC paid Chivayo without the businessman submitting a bank guarantee to safeguard public funds. Clause 4.2 of the contract specifies the need for a performance bond to protect ZPC against any losses in the event Intratrek Zimbabwe defaulted on the project. The contract further specifies that ZPC will release money only after receiving an advance payment guarantee.
On Tuesday last week, ZPC board chairman Engineer Stanley Kazhanje wrote a letter suspending Eng Gwariro over the Gwanda solar deal.
In his letter, Eng Kazhanje said Eng Gwariro failed to respond to issues put to him before the board that sat on December 8. He said the board meeting had "presented serious concerns regarding the management and in particular the payments made to the contractor, Intratrek Zimbabwe, with respect to the 100MW Gwanda Solar Power Station project".
Eng Kazhanje said during the board meeting, two issues stood out, namely payments made to Chivayo without the bank guarantee and payments made on the back of payment certificates from the contractor with no work to support the certificates.
"It was your explanation that the payments were made allegedly under undue pressure from the then Minister of Energy and Power Development (Dr) Samuel Undenge, which pressure was never communicated to the board or the group chief executive (Engineer Josh Chifamba)," Eng Kazhanje said.
"In view of the above and given its seriousness and gravity, as well as concerns around it, the board of directors intends to undertake investigations into the matter. Consequently, the board, in the exercise of its prerogative on leave management, has decided to place you on mandatory leave of up to ninety days on full pay and benefits to facilitate the said investigations. The above takes effect from the date of receipt of this letter."
Eng Kazhanje said Eng Gwariro should remain available to be recalled to resume duties if deemed necessary or to assist with investigations at any time. "While on leave, you are prohibited from taking up employment elsewhere," he said. "We request that you cooperate with appointed authority to carry out these investigations.
"The process is simply to enable the board to fully understand what transpired in respect of the management and execution of the contract which to this stage remains unclear to us as a board. Depending on the outcome of the investigations, a decision will be made on the way forward and you shall be informed accordingly. "Should you intend to travel outside Zimbabwe, kindly ensure that you seek leave from the chairman of the board or in his absence, the group chief executive officer."
ZPC management argues that for five months, they refused to pay Chivayo in the absence of a bank guarantee, but later succumbed to pressure from Dr Undenge. The former minister denies interference and accuses management of failing to follow laid down procedures.
Source - Herald
