News / National
US$15m State House works bill stuns govt
16 Feb 2024 at 09:57hrs | Views
THE government has rejected an invoice for US$15 million submitted by a firm that clinched a deal to construct precast walls at State House, the President's official residence and offices, the Zimbabwe Independent revealed.
Under the deal, Paulos Construction was given the mandate to carry out works at Number 1 Chancellor Avenue.
Construction is still ongoing.
The bill is the latest to be rejected by the government, which last year refused to pay what it described as inflated prices by its suppliers.
Sources in the Office of the President and Cabinet (OPC) allege the figures in the invoices, gleaned by the Independent this week, were much higher than market rates.
Treasury, the OPC sources said, was also questioning an invoice by another local construction company that is billing the government US$2 million a gate at the offices and residential side of the State House.
The Independent was told that Paulos Construction's case had caused divisions in the Finance ministry, with some officials at the Treasury pushing for payment, saying the government should honour the terms of the winning tender.
The top Finance ministry officials blocking the payment, the sources said, are arguing that the invoice from Paulos Construction was ridiculously high as it could purchase up to 500 houses in Zimbabwe's high-density suburbs. They have stated that the amount being charged was not commensurate with the works being done.
Approached for comment this week, Paulos Construction director Paul Tungwarara referred the Independent to the Ministry of Local Government and Public Works, which approved the tender when July Moyo was the minister.
Moyo was moved to the Ministry of Public Service, Labour and Social Welfare last year after the August elections.
"I have no comment," Tungwarara said. "You can get in touch with the principal, the Ministry of Local Government."
However, authoritative sources said the payment has been blocked by top officials at the Finance ministry, who are insisting that they will only pay if Paulos Construction reduces the amount.
The Independent could not establish how much the government was prepared to pay. Tungwarara is a local businessman, whose other firm, Prevail International, is spearheading the development of a US$500 million cyber city in Mt Hampden near Harare.
"Treasury has rejected the price," a source in the OPC said. "They feel the US$15 million is too high. Paulos was awarded a tender to construct a perimeter wall and durawall for State House. However, they overcharged the government and it is causing a rift among senior government officials."
Efforts by the Independent to establish Paulos' shareholding structure hit a brick wall yesterday.
An official at the Registrar of Companies said while the firm was legally registered, the file could not be located when this publication sought to establish the list of directors at Paulos Construction.
On Monday, Local Government minister Winston Chitando promised to respond to questions, but had not done so at the time of going to print.
Moyo could not be reached for comment.
Treasury officials opposed to paying out the US$15 million say Zimbabwe, which is battling an economic crisis worsened by high inflation, has been struggling to address a sea of problems, including provision of life-saving drugs and specialised equipment. It has also failed to deal with the collapsing public health and general service delivery systems.
The Independent reported last year that Prevail International was among several companies contracted by government to drill thousands of boreholes across the country, and was demanding Zimbabwe dollar-priced fuel.
The demands violated a government policy restricting trade in fuel to United States dollars, which has given importers capacity to ship enough oil for the market.
In a letter to PetroTrade obtained by the Independent dated July 18 2023, Tungwarara said his firm required 400 000 litres of diesel per month for borehole drilling services.
He said the diesel had to be paid in Zimbabwe dollars.
"Prevail International has been awarded a national status tender for borehole drilling services and spearheaded by his Excellency, President (Emmerson Dambudzo) ED Mnangagwa," Tungwarara wrote to PetroTrade.
"However, because this is a fuel-intensive project, we respectfully request your assistance in availing the allocation of weekly 100 000 litres of diesel direct Zimbabwe dollar payments bulk fuel.
"We anticipate that your approval of a weekly Zimbabwe dollar allocation towards the purchase of fuel for this borehole will enable smoother operations and implementation for the benefit of the nation at large.
"We appreciate your efforts in our respect and anticipate a favourable response," he added.
In one of the cases that has exposed the extent of looting in Zimbabwe, the Independent recently unearthed explosive details of theft of compensation funds relating to the US$88 million Mbudzi Interchange project in Harare, after anti-graft investigators zeroed in on Ministry of Transport bosses fingered in the scandal.
Subsequent to our exclusive story, a top director in the ministry was arrested and is currently out on bail.
But it is said the probe could net bigwigs in the Local Government ministry along with bosses at two of Zimbabwe's leading real estate agencies, which made valuations of the properties around that area.
It was estimated last year that up to US$35 million will be paid out to about 130 affected companies and residential properties owners for relocation.
Some officials claimed that out of US$35 million, about US$12 million could have been paid to 52 individuals and businesses by the end of 2023.
Under the deal, Paulos Construction was given the mandate to carry out works at Number 1 Chancellor Avenue.
Construction is still ongoing.
The bill is the latest to be rejected by the government, which last year refused to pay what it described as inflated prices by its suppliers.
Sources in the Office of the President and Cabinet (OPC) allege the figures in the invoices, gleaned by the Independent this week, were much higher than market rates.
Treasury, the OPC sources said, was also questioning an invoice by another local construction company that is billing the government US$2 million a gate at the offices and residential side of the State House.
The Independent was told that Paulos Construction's case had caused divisions in the Finance ministry, with some officials at the Treasury pushing for payment, saying the government should honour the terms of the winning tender.
The top Finance ministry officials blocking the payment, the sources said, are arguing that the invoice from Paulos Construction was ridiculously high as it could purchase up to 500 houses in Zimbabwe's high-density suburbs. They have stated that the amount being charged was not commensurate with the works being done.
Approached for comment this week, Paulos Construction director Paul Tungwarara referred the Independent to the Ministry of Local Government and Public Works, which approved the tender when July Moyo was the minister.
Moyo was moved to the Ministry of Public Service, Labour and Social Welfare last year after the August elections.
"I have no comment," Tungwarara said. "You can get in touch with the principal, the Ministry of Local Government."
However, authoritative sources said the payment has been blocked by top officials at the Finance ministry, who are insisting that they will only pay if Paulos Construction reduces the amount.
The Independent could not establish how much the government was prepared to pay. Tungwarara is a local businessman, whose other firm, Prevail International, is spearheading the development of a US$500 million cyber city in Mt Hampden near Harare.
"Treasury has rejected the price," a source in the OPC said. "They feel the US$15 million is too high. Paulos was awarded a tender to construct a perimeter wall and durawall for State House. However, they overcharged the government and it is causing a rift among senior government officials."
Efforts by the Independent to establish Paulos' shareholding structure hit a brick wall yesterday.
An official at the Registrar of Companies said while the firm was legally registered, the file could not be located when this publication sought to establish the list of directors at Paulos Construction.
On Monday, Local Government minister Winston Chitando promised to respond to questions, but had not done so at the time of going to print.
Moyo could not be reached for comment.
Treasury officials opposed to paying out the US$15 million say Zimbabwe, which is battling an economic crisis worsened by high inflation, has been struggling to address a sea of problems, including provision of life-saving drugs and specialised equipment. It has also failed to deal with the collapsing public health and general service delivery systems.
The Independent reported last year that Prevail International was among several companies contracted by government to drill thousands of boreholes across the country, and was demanding Zimbabwe dollar-priced fuel.
The demands violated a government policy restricting trade in fuel to United States dollars, which has given importers capacity to ship enough oil for the market.
In a letter to PetroTrade obtained by the Independent dated July 18 2023, Tungwarara said his firm required 400 000 litres of diesel per month for borehole drilling services.
He said the diesel had to be paid in Zimbabwe dollars.
"Prevail International has been awarded a national status tender for borehole drilling services and spearheaded by his Excellency, President (Emmerson Dambudzo) ED Mnangagwa," Tungwarara wrote to PetroTrade.
"However, because this is a fuel-intensive project, we respectfully request your assistance in availing the allocation of weekly 100 000 litres of diesel direct Zimbabwe dollar payments bulk fuel.
"We anticipate that your approval of a weekly Zimbabwe dollar allocation towards the purchase of fuel for this borehole will enable smoother operations and implementation for the benefit of the nation at large.
"We appreciate your efforts in our respect and anticipate a favourable response," he added.
In one of the cases that has exposed the extent of looting in Zimbabwe, the Independent recently unearthed explosive details of theft of compensation funds relating to the US$88 million Mbudzi Interchange project in Harare, after anti-graft investigators zeroed in on Ministry of Transport bosses fingered in the scandal.
Subsequent to our exclusive story, a top director in the ministry was arrested and is currently out on bail.
But it is said the probe could net bigwigs in the Local Government ministry along with bosses at two of Zimbabwe's leading real estate agencies, which made valuations of the properties around that area.
It was estimated last year that up to US$35 million will be paid out to about 130 affected companies and residential properties owners for relocation.
Some officials claimed that out of US$35 million, about US$12 million could have been paid to 52 individuals and businesses by the end of 2023.
Source - Zimbabwe Independent
