FINANCE and Economic Development permanent secretary George Guvamatanga has revealed that many companies are fleecing government by overpricing their goods and services.
“At the moment, we have an issue of overpricing by service
providers and contractors, some of you members might not have been too happy
with me over hotels’ pricing. I am not happy with the way most hotels are
charging government,” Guvamatanga told Parliament’s Public Accounts Committee
(PAC).
“The pricing that has been given to government is
extortion, we should not accept these extortionate prices. It should come to a
stop, our budget as government is not in parallel market pricing. Charge us
fairly.”
Guvamatanga made the remarks yesterday when he appeared
before the committee to explain the Public Procurement and Disposal of Public
Assets Act in light of non-delivery of commodities by some suppliers resulting
in government losing a lot of money.
“The Public Procurement and Disposal of Public Assets Act
stipulates that when necessary to enable effective implementation of the
contract, a procurement contract may provide for the procuring entity to make
advance payment of the price. The total amount of advance payment made under
the procurement contract shall not exceed the prescribed percentage of the
total contract price.
“Unless otherwise stipulated in the contract, an advance
payment shall not be made unless the contractor furnishes an advance payment
guarantee covering the amount of the advance payment and satisfies any other
terms set out in the bidding documents,” Guvamatanga explained.
He then gave an example of one Harare hotel where MPs were
last Friday charged $168 000 per night for a US$120 room. The hotel was
reportedly using a rate of US$1:$1 400.
“At this rate, one would ask for an advance payment of at
least 30%. If that person goes at the auction and gets money, the advance
payment given to him/her covers all of his/her costs, meaning that any other
remaining balance is now profit and that money will easily be taken to the
parallel market. So over and above issues that were arising from these service
providers and contractors demanding advance payment is creating problems of
non-delivery, we have stopped doing advance payment for other service providers
such computers, cars, toners. Most of them do not do due diligence. We are now
trying to be more efficient and effective in our procurement processes,”
Guvamatanga added.
He also indicated that the Finance ministry was considering
further mechanisms to protect public finances.
PAC chairperson Brian Dube then asked Guvamatanga to
explain what his ministry has done to ensure the US$10 billion over-expenditure
by government from 2015 to 2018 is audited by Auditor-General Mildred Chiri’s
office.
“We engaged Treasury to arrange for the submission of
appropriation accounts for validation by the AG, with such submissions to be
made through Parliament. The required appropriation account amendments will be
submitted to Parliament in two batches — 15 under minutes dated April 14, 2021,
and a further 11 under cover of our May 31, 2021 minutes.
“The outstanding submissions relating to the then Ministry
of Small and Medium Enterprises was availed to the AG’s Office together with
the second batch of submissions made to Parliament, which the former (SMEs
ministry) indicated had not been passed on to them,” Guvamatanga said.
Legislators then warned him against shunning Parliament
business, after he said he failed to turn up to give oral evidence last week
due to other commitments. Newsday
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