News / National
Wicknell Chivayo, ZPC tender saga deepens
01 Jun 2016 at 06:55hrs | Views
THE Minister of Energy and Power Development, Samuel Undenge, reportedly pressured the Zimbabwe Power Company to pay Wicknell Chivayo's Intratek Zimbabwe $5 million without the firm submitting a bank guarantee to protect public funds, it has emerged.
This comes as Chivayo yesterday admitted receiving payment without a guarantee as specified in the contract to construct a 100-megawatt solar plant in Gwanda.
Chivayo said it was difficult for a local company to raise a bank guarantee hence the decision to violate the contract.
It has also emerged that ZPC management, for five months, refused to pay Chivayo the money in the absence of a bank guarantee but later succumbed to pressure from Undenge.
The Minister yesterday denied interference and accused management of failing to follow laid down procedures.
"It's not true that I put pressure on ZPC management to pay Intratek," he said.
"Management is aware of the laid down procedures they should follow when making any payment. Public funds have to be safeguarded. As Minister, this is precisely the reason why I engaged ZPC management and the board chairman who have assured me that laid down payment procedures will be adhered to in various projects which ZPC will embark on."
Chivayo yesterday texted unsolicited WhatsApp messages to our Harare Bureau's reporter admitting his failure to provide a bank guarantee.
"I'm a local company and how do you expect me to raise a guarantee?" he asked.
"My Chinese partners (CHiNT Electric) will issue a guarantee for bigger figures with their eyes closed. This was just $7 million payment for pre-commencement works, they should be completed in six months. This project is also yours but if the truth be told you have successfully damaged it. This inevitable 100MW farm will also benefit you and your children in the future so no need to continuously fight the project."
Clause 4.2 of the contract specifies the need for a performance bond to protect ZPC against any losses in the event Intratek Zimbabwe defaulted on the project.
The contract further specifies that ZPC will release money only after receiving an advance payment guarantee.
Chivayo gave a rundown of how the $5 million was being used at the site but on being told that the problem was the absence of a guarantee, he responded: "I understand your point but where there's such a big contract, you both put your best effort to make the project a success.
"There's no $5 million exposure on ZPC, three quarters of that money is used and ZPC is happy. Make some time and pass by tomorrow so you understand. I won't influence what you write but I feel you don't understand the dynamics of an EPC project."
Documents in possession of our Harare Bureau show that Undenge ignored a red flag raised by engineers in his ministry who argued that as much as the project was urgent, there was a need for ZPC management to "remain professional".
A ZPC official, speaking on condition of anonymity for fear of victimisation, said they had refused to pay Chivayo from October last year.
"We're being attacked for following a ministerial order," said the official.
"The problem started in October last year when Intratek brought invoices seeking payment for the pre-commencement works without a bank guarantee. We refused and insisted that we can't go out of the contract. The impasse dragged on for months and several emails, which we have, on the performance guarantee, were exchanged between ZPC and Intratek. Things took a new twist when the Minister, as he always does every Monday, summoned Zesa officials in February and ordered them to pay Chivayo. Fearing for our jobs, we couldn't resist. If the minister has a problem with what we're saying, let him deny this and it's time for the truth (to come out) because we've been hit left, right and centre yet our hands were tied."
In a letter dated November 17, 2015, an Energy and Power Development Ministry official, Benson Munyaradzi (then acting permanent secretary), wrote to Zesa management advising them to remain professional.
This was after Intratek forwarded an invoice seeking payment for feasibility studies.
Wrote Munyaradzi: "Of concern is the submission of an invoice by the contractor (Intratek), who has yet to submit the studies. If ZPC is paying for the work, then they should be in full control of the whole process to the extent of engaging own consultant who is independent of the contractor. As much as (we) urgently need to implement this project, we should not compromise on our professionalism. Let us do the right things and not exacerbate the somehow flawed procurement process further."
Undenge chairs a meeting with Zesa officials every Monday.
The ZPC board, which was by-passed on the issue, meets once every quarter of the year.
This comes as Chivayo yesterday admitted receiving payment without a guarantee as specified in the contract to construct a 100-megawatt solar plant in Gwanda.
Chivayo said it was difficult for a local company to raise a bank guarantee hence the decision to violate the contract.
It has also emerged that ZPC management, for five months, refused to pay Chivayo the money in the absence of a bank guarantee but later succumbed to pressure from Undenge.
The Minister yesterday denied interference and accused management of failing to follow laid down procedures.
"It's not true that I put pressure on ZPC management to pay Intratek," he said.
"Management is aware of the laid down procedures they should follow when making any payment. Public funds have to be safeguarded. As Minister, this is precisely the reason why I engaged ZPC management and the board chairman who have assured me that laid down payment procedures will be adhered to in various projects which ZPC will embark on."
Chivayo yesterday texted unsolicited WhatsApp messages to our Harare Bureau's reporter admitting his failure to provide a bank guarantee.
"I'm a local company and how do you expect me to raise a guarantee?" he asked.
"My Chinese partners (CHiNT Electric) will issue a guarantee for bigger figures with their eyes closed. This was just $7 million payment for pre-commencement works, they should be completed in six months. This project is also yours but if the truth be told you have successfully damaged it. This inevitable 100MW farm will also benefit you and your children in the future so no need to continuously fight the project."
Clause 4.2 of the contract specifies the need for a performance bond to protect ZPC against any losses in the event Intratek Zimbabwe defaulted on the project.
Chivayo gave a rundown of how the $5 million was being used at the site but on being told that the problem was the absence of a guarantee, he responded: "I understand your point but where there's such a big contract, you both put your best effort to make the project a success.
"There's no $5 million exposure on ZPC, three quarters of that money is used and ZPC is happy. Make some time and pass by tomorrow so you understand. I won't influence what you write but I feel you don't understand the dynamics of an EPC project."
Documents in possession of our Harare Bureau show that Undenge ignored a red flag raised by engineers in his ministry who argued that as much as the project was urgent, there was a need for ZPC management to "remain professional".
A ZPC official, speaking on condition of anonymity for fear of victimisation, said they had refused to pay Chivayo from October last year.
"We're being attacked for following a ministerial order," said the official.
"The problem started in October last year when Intratek brought invoices seeking payment for the pre-commencement works without a bank guarantee. We refused and insisted that we can't go out of the contract. The impasse dragged on for months and several emails, which we have, on the performance guarantee, were exchanged between ZPC and Intratek. Things took a new twist when the Minister, as he always does every Monday, summoned Zesa officials in February and ordered them to pay Chivayo. Fearing for our jobs, we couldn't resist. If the minister has a problem with what we're saying, let him deny this and it's time for the truth (to come out) because we've been hit left, right and centre yet our hands were tied."
In a letter dated November 17, 2015, an Energy and Power Development Ministry official, Benson Munyaradzi (then acting permanent secretary), wrote to Zesa management advising them to remain professional.
This was after Intratek forwarded an invoice seeking payment for feasibility studies.
Wrote Munyaradzi: "Of concern is the submission of an invoice by the contractor (Intratek), who has yet to submit the studies. If ZPC is paying for the work, then they should be in full control of the whole process to the extent of engaging own consultant who is independent of the contractor. As much as (we) urgently need to implement this project, we should not compromise on our professionalism. Let us do the right things and not exacerbate the somehow flawed procurement process further."
Undenge chairs a meeting with Zesa officials every Monday.
The ZPC board, which was by-passed on the issue, meets once every quarter of the year.
Source - chronicle
