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Red flag over murky govt vehicle deals

by Staff reporter
30 Apr 2022 at 16:25hrs | Views
THE Zimbabwe Anti-Corruption Commission (Zacc) says it will not investigate various cases in which the government, local authorities and parastatals have been prejudiced through the non-delivery of motor vehicles worth millions of United States dollars, long after they were paid for.

The government is losing millions of dollars in dubious deals through which several ministries, parastatals and local authorities have paid for vehicles that dodgy car dealers have failed to deliver. Some of the dealers are alleged to be linked to big political players.

But while calls have been made for an investigation into possible cases of fraud and the flouting of tender procedures, Zacc has poured cold water on any prospects of an investigation.

Responding to questions submitted by The NewsHawks as part of an investigation into how the government loses millions of dollars through continuing to engage the very same companies that have a track record of failing to deliver on their contractual obligations, Zacc said the matter is civil rather than criminal, therefore there is really no need for a probe.

"Failure to fulfill a contractual obligation is a civil matter and does not constitute corruption or criminal offence to be investigated by Zacc," the anti-corruption body's spokesperson, Commissioner John Makamure (pictured), explained.

"The aggrieved party can directly approach the courts."

Information minister Monica Mutsvangwa's ministry paid for 29 vehicles from Solutions Motors and other car dealers back in 2020, but has so far not received any.  She dodged questions when The NewsHawks asked her about the delivery status of the vehicles.

"You can call me later," she said on Tuesday. "I am rushing to meet someone who has been waiting for a while now and from there I am travelling for the Zimbabwe International Trade Fair (ZITF)." The Trade Fair is held in Bulawayo.

In the investigation into how the ministry of Information paid for vehicles which have not been delivered, it has been established that Solutions Motors, one of the companies involved, is owned by businessman Patrick Siyawamwaya. Company documents identify him as the managing director. Solution Motors is allegedly a perennial failure in owning up to contractual obligations not only with the ministry of Information, but with several other government departments and local authorities.

Siyawamwaya was recently appointed the national director of transport and logistics for Action for Empowerment Zimbabwe, an organisation that displays pictures of its leadership posing with President Emmerson Mnangagwa at State House as its cover photo.

He defended his company's performance in failing to deliver vehicles paid for by clients. He said the failure was the result of a number of challenges.

"We haven't yet managed to deliver the outstanding seven vehicles due to a number of challenges," Siyawamwaya said on Tuesday.

"The tender was awarded sometime in May 2020 and we signed the contract in July 2020. Payment was only made in October 2020, five months after contract signing. We delivered five vehicles, remaining with a balance of seven."

He blamed the backlog on the government's foreign currency system, which he said resulted in the central bank failing to allocate currency timeously.                   

"Unfortunately there is a serious backlog in terms of foreign currency release from the Reserve Bank of Zimbabwe (RBZ) Auction System, which is our number one challenge," Siyawamwaya said.

He said Toyota was also affected by the Covid-19-induced lockdowns and has failed to produce enough to meet demand hence the problems in delivering the cars.

"Due to the Covid-19-induced lockdown, Toyota has a serious backlog in terms of production, which has disrupted the vehicle supply chain."

"We look forward to start our deliveries sometime at the end of May with two vehicles per month till we finish the outstanding order," Siyawamwaya said.

He would not be drawn into commenting on whether he had advised his clients accordingly before accepting payment for the vehicles he has since failed to deliver.

"We are also working with our bankers for allocation of foreign currency from the RBZ."

According to Auditor-General Mildred Chiri in her audit for the financial year ended 31 December 2020 on Appropriation Accounts, Finance and Revenue Statements and Fund Accounts, the ministry went into a contract with car dealers, including Solutions Motors, for the acquisition of 29 vehicles.

The vehicles were supposed to be delivered by 23 October 2020 in terms of the contract but, to date, no deliveries have been made.

"According to the General Conditions of Contract (GCC) 19.1 of the contract of sale entered into between the ministry and vehicle suppliers during 2020, the date for completion of the delivery of vehicles or the period within which the delivery was expected to be done was four weeks from the date of issue of the purchase order," Chiri said in her report.

"Audit noted that on June 3, 2021, the ministry had not yet taken delivery of a total of 24 out of 29 vehicles paid for to Solutions Motors and Motor City despite that the dates for completion of delivery of vehicle agreed in the contract of sale with both suppliers lapsed on October 23, 2020."

Chiri raised fears that the vehicles purchased may be concealed if delivery is unduly delayed. She advised the affected parties to take the legal route on the matter.

"If the suppliers are facing challenges, the ministry should seek legal recourse for the breach of contract of sale by the suppliers who are not delivering the vehicles so as to avoid further delays," Chiri advised.

According to the ministry's response on the matter, the delay in vehicle delivery was due to "technical challenges" faced by suppliers.

"Unfortunately, it was beyond the ministry's control although negotiation and persuasion approaches were used to have the vehicles delivered. Communication between the ministry and suppliers is going on frequently," said the ministry in response to Chiri's findings.

"Ministry is finally expecting delivery of some vehicles after the Zimbabwe Revenue Authority inspection is complete."

In the same report, the Auditor-General also noted price variations on the purchase of vehicles with a risk of wasteful expenditure or even fraud.

"According to General Conditions of Contract 29.1 of the contract of sale signed between the Ministry of Information, Publicity and Broadcasting Services and four vehicle suppliers during 2020, ‘the price for each vehicle acquired  shall be fixed for 60 days from the tender closing date."

"The price adjustments will only be allowed after 60 days and the increase shall not exceed 20 percent. Any variation contrary to the above that may be as a result of changes in statutory requirements changes in the macro-economic environment or a shift in government policies will be agreed by both parties through an addendum to the contract."

Said Chiri in the report: "I noted that the ministry paid $28 334 774 (149 percent) above the contract value of $19 044 519 for the supply of 12 vehicles. The ministry paid a further amount of $26 047 176 (82 percent) above the contract value of $31 573 531 for the supply of 17 vehicles. Both payments were made on September 25, 2020 after the lapse of 60 days.

"There was no evidence availed to audit in the form of addendum to the contract with details to justify the increases in excess of 20 percent allowed in the contract."

Chiri said the risk and implications of such were "the likelihood of wasteful expenditure or fraud being committed if suppliers are paid amounts more than what is in the contract of sale without an adjustment by way of an addendum."

The Auditor-General recommended that the ministry recover the excess payments and adhere to the contractual agreement.

"The ministry should always pay as per the contractual requirements so as to ensure effective use of public funds."

Owing to the failure by Solutions Motors to fulfill contractual obligations, questions are now being raised as to why the company continues to be awarded contracts from the government, local authorities and parastatals almost every year.

Investigations have revealed that Solutions Motors has issues with, among others, Chiredzi Rural District Council, Mwenezi Rural District Council and the Department of Irrigation for alleged failure to deliver on contractual obligations.

The company was summoned to Parliament in 2019 after failing to satisfy a US$518 850 contract from the Department of Irrigation after it supplied only six out of 10 trucks purchased in 2017. The other four, it emerged, are still outstanding.

Siyawamwaya was also summoned by the National Assembly's Public Accounts Committee (PAC) then chaired by former Finance minister Tendai Biti where he was taken to task over another US$958 000 tender to supply water bowsers, excavators and compactors in 2017 that were also not delivered to the Department of Irrigation.

During the hearing, PAC members drew attention to the fact that Siyawamwaya was allegedly close to Sakunda Holdings boss Kudakwashe Tagwirei. His sister, the PAC was informed, was married to the Tagwireis.

The company was last year blacklisted by the Procurement Regulatory Authority of Zimbabwe (PRAZ) as one of the three vehicle dealers that failed to deliver after winning tenders to supply vehicles to government departments and councils.

The company failed to deliver refuse trucks ordered in 2017 by Karoi Town Council, leading to a protracted legal battle.

Karoi council was yet to take delivery of a 20-tonne refuse collection truck it ordered in 2017 through Solutions Motors.

Siyawamwaya is on record as saying that his company was assisting government departments, companies and individuals trying to avoid restrictions by the United States' Office of Foreign Assets Control (Ofac) after the imposition of sanctions and travel restrictions on Zimbabwe's ruling elite.

Source - NewsHawks
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