This has compelled the Auditor-General Mildred Chiri to
institute an investigation into the murky deals following widespread reports
that public procurement entities failed to submit relevant documentation to
authorities.
The Zimbabwe Independent, in collaboration with the
Voluntary Media Council of Zimbabwe (VMCZ), looked into how Covid-19 resources
were utilised by central government and local authorities.
Official information from the Procurement Regulatory
Authority (Praz) shows that Parliament and the Auditor-General were in
possession of a report around Covid-19 procurement. The report cannot be
released now due to parliamentary reporting procedures.
However, Harare City Council is involved in an opaque
transaction where Eqstra Holdings, failed to deliver 10 000 Tyvek Covid-19
protective overalls worth ZW$51 520 000 (US$606 117) after it was
unprocedurally awarded a tender.
Irregularities in the tender are contained in an audit
report by the city’s internal audit department. The matter is now a subject of
investigation by the Zimbabwe Anti-Corruption Commission (Zacc).
According to the audit report, council audit manager
Archibald Nyamurova noted that prices for the equipment were inflated.
Suspended Harare Town Clerk Hosiah Chisango ordered the
audit after learning that Eqstra was cherry-picked to supply the Tyvek
coveralls under order number 0105212.
The initial purchase order (0105212) for Eqstra to supply
council with 15 000 Tyvek suits at a price of ZW$2 997 (US$37) per unit at a
total value of ZW$44 650 000 (US$525 294) was way cheaper, despite having more
units.
The audit report reads: “Council was deprived of its right
to receive ZW$25 760 000
(US$303 000) worth of stock as result of the 5 000 units
which were not delivered to council.
Eqstra was awarded an order by council to supply 15 000
suits, however, the company only supplied council with 10 000 Tyvek suits at a
price of $5 152 (US$60) per unit.
In US dollar terms, a benefit of US$1 030 400 was forfeited
as a result of the non-delivery.
The audit report reads: “Council engaged Eqstra Hardware
and Electrical who had no capacity to deliver the 15 000 Tyvek suits on the
initial contract. After council authorised a reduction of the 15 000 units to
10 000 units, Eqstra Hardware and Electrical took four months to deliver the 10
000-unit consignment.
“However, the company had indicated on its first bid that
the 15 000 units were immediately available.”
The report further says council was prejudiced of US$862
000 because of the authorised but unjustified price variation.
However, though the internal audit document was generated
within the structures of council, Eqstra Hardware and Electrical, through its
lawyers have dismissed its contents.
“The owners (shareholders) of Eqstra Trading Private
Limited hereinafter called Eqstra Trading namely Gretwin Chitauro and Samuel
Kunyarimwe have never been blacklisted for any allegations by any State or
private institution.
“Only the Procurement Regulatory Authority of Zimbabwe
(Praz) can blacklist companies or individuals from dealing with State
institutions,” Wintertons Legal Practitioners, representing Eqstra Trading,
said.
Subsequently, Praz ordered suppliers to submit all
procurement records for Covid-19 emergency procurements in electronic and/or
scanned form in line with the Public Procurement and Disposal of Public Assets
Act (PPDPA).
Information obtained by the Independent shows that while
the PPDPA set the procurement record adequacy level standard at 100%, an
assessment of Covid-19 emergency procurements indicated an overall record
adequacy level of 44% with local authorities, at 41% with ministries, at 35%
with parastatals.
Excessive and fraudulent procurement of Covid–19 drugs and
other issues also sucked in the government in the Drax procurement scandal.
The Independent has established that internal control
weaknesses in the procurement and vendor management processes have been
identified.
There are now fears that the figures reported by
procurement entities (PEs) are way below the actual Covid-19 expenditure for
the year 2020 as the total procurement values have been derived from a 51% PE
submission effort.
This implies that the scandals in relation to Covid-19
procurement could actually be deeper than what is in the public domain as Praz
is battling high levels of non-compliance by PEs with 49% of PEs having failed
to declare any Covid-19 emergency procurements as of the end of 2020.
This is coming as the authority is also battling
inefficiency in procurement processes with non-professional people flooding the
entities.
A Praz strategy document shows that there were
non-professional people in practice with 50% of procurement professionals still
requiring capacity building while the sector has no code of ethics and a
procurement professional council.
“Twenty-five percent still need sensitisation, 60% of PEs
still to apply for authorisation to conduct procurement and there are over 45%
control overrides which affect effectiveness and 50% of the practitioners
require capacitation on the law, while 100% require licensing,” read the
document.
Praz acting chief executive officer Clever Ruswa admitted
the challenges in the Covid-19 procurement, as well as gross understatement of
Covid-19 procurement figures by the PEs. However, he could not give figures
saying they were still under investigation by Parliament and the
Auditor-General’s Office.
“Some of the non-companies that emerged from Praz
monitoring and evaluation procurement reviews were as follows: As of end of
2020, 176 PEs (51%) although some having delayed submitting reports citing
various reasons, complied with the directive to report on the Covid-19
procurements. 169 PEs, (49%) did not declare any Covid-19 emergency
procurements. Given that the Covid-19 emergency procurements were subject to
the framework arrangements centrally coordinated by the Ministry of Health and
Child Care, the review process sought to assess the level to which the PPDPA
Act, Circular guidelines, framework agreements and catalogues were adhered to,”
he said.
“Based on the review of the 176 PE submissions, the
following was observed: Submission effort of Covid-19 Emergency Procurements
returns by PE Category and by Industry was at 51%. Given that the total
procurement values have been derived from a 51% PE submission effort, there is
a high possibility that the figures reported by PEs are way below the actual
Covid-19 expenditure for this period.”
Relating to Young Health Care, details show that Health and
Childcare deputy minister John Mangwiro allegedly played a part in the
unprocedural awarding of a US$6 million tender to the entity, triggering
investigations by Zacc.
In December 2020, Mangwiro, was summoned by Zacc. A warned
and cautioned statement was recorded over the Young Health Care tender.
Mangwiro was facing charges of interfering in the bidding
process for the supply of Covid-19-related materials by Young Health Care to
the National Pharmaceutical Company (Natpharm).
Based on the Ministry of Finance and Economic Development
submission, the government provided a total budget of ZW$3,7 billion (US$43,5
million) across various ministries and departments although, the actual
disbursements at September 2020 to PEs against this budget is reported as a
total of ZW$2,3 billion (US$27 million).
Delays and non-submission of returns and procurement
entities levels imply a significant and urgent need for the PPDPA compliance,
monitoring and evaluation regulations to be gazetted to enforce compliance by
procuring entities and suppliers to the PPDPA.
Red flags have also been raised around the irregular
procurement deals which revealed a range of irregularities relating to price
variations, fraudulent payments and duplicate payments. Other irregularities
also include substandard goods and services under deliveries, inefficiencies,
wastage of financial resources and high cost of procurement processes.
Transparency International Zimbabwe (TIZ) executive
director Muchaneta Mundopa in a report titled Illicit Financing in the Health
Sector in Zimbabwe said authorities should be accountable by publishing notices
of contract awards on the Praz website within 30 days of the contract award, as
required by Section 68 of the PPDPA.
“Parliament can also follow up with Praz on its
recommendation that Praz only registers reputable companies and only engage
reputable pre-registered suppliers for single-source public procurement
contracts, unless they are unable to provide the supplies,” she said. Zimbabwe
Independent
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