Tender system corrupt: Mangoma

THE Zimbabwe Electricity Supply Authority (Zesa) has been caught up in multi-million dollar energy tender scam after revelations that some crucial projects were awarded to ex-convicts and drug traffickers. There have also been reports that the project costs were massively inflated. Zimbabwe Independent political reporter Elias Mambo (ZI) caught up with former Energy minister Elton Mangoma (EM) during whose time plans to expand the energy production were mooted. He also spoke to the current Energy minister Samuel Undenge (SU) who has been in the spotlight after recently saying the Zesa deals were above board. Mangoma and Undenge spoke on the tender processes, adjudication and costs of the projects. Below are excerpts of the interviews.
ZI: Mr Mangoma, during your time (inclusive government era) as minister, proposals were made to refurbish and build some power stations to mitigate power shortages in the country. Take us through the processes and tell us how the tenders were to be awarded.

EM: First we were very clear with our schedule of things to be done. We wanted to get generation up from Kariba South, Hwange 7 and 8, Batoka, Gairezi Hydro Power as well as the solar projects. There were terms and specifications that were supposed to be our guidelines in selection process of those that were to be awarded tenders. The most significant issue was capacity both in as far as the technical know-how and financial ability were concerned. We knew Zesa was insolvent so whoever was supposed to be awarded the tender was supposed to show financial capacity to do the job. It was only Batoka which we wanted to be a built-operate and transfer (BOT).

ZI: Was due diligence a requirement before the tenderers were awarded?

EM: Due diligence is part of the process of selection. How do you give someone a multi-million dollar project without checking background of the company and persons involved? Like I said, first, it was technical know-how, financial capacity and off course the background checks on the persons involved for the sake of reputation.
ZI: How much were those projects worth?

EM: Kariba South was initially pegged at US$355 million of which Zimbabwe Power Company was supposed to fund between US$55 million and US$60 million and the balance was to be paid from the Chinese Exim Bank loan. I am shocked to read that the figure ballooned to US$533 million. Gairezi Hydro Power Station was initially at US$90 million and we hear the cost is now at US$248 million. So basically it means the costs of the projects have ballooned to astronomical figures and one wonders what is it that has changed within the last three years to warrant such increases.

ZI: So how do you explain the discrepancy in terms of costs?

EM: I have no doubt that the escalation of the costs is meant to cater for the corrupt government officials because feasibility studies were done and there is absolutely no reason for the costs to soar.

ZI: And how did you finally select winners of the tenders?

EM: The selection was done after my time, but I know there is a tender committee where inspection is done to check whether the tenderers met the specifications. The adjudication is done on that basis and it is simply a matter of cross-checking and ticking that specifications have been met. The adjudication results should then be publicised so that everyone is aware who the winner is. Such documents should also be availed to anyone who wants to see them.

However, in the current case it seems that was secretly done and winners announced without publication of the adjudication results.

ZI: And what is your comment on those who have been awarded multi-million dollar energy tenders?

EM: I have been reading in the media the noise about those winners. I am not sure and I have never seen where they have done such projects. Do they have technical expertise? I am not sure whether due process was followed because why is this topical now when tenders were awarded long back? Is it that the media has unearthed the winners instead of Zesa publicly announcing the winners?

So the whole issue raises eyebrows. I am also worried why it is coming out now that the winners have a bad history of having been fraudsters and drug traffickers. Why is it that this did not come out during the selection process?

…tendering above board: Undenge

EM: Minister, Zesa which falls under your portfolio and has been rocked with a tender scam. What is the ministry’s mandate in the tendering process?

SU: Our mandate is just to make sure that the tender committee comes up with winners who meet the tender specifications.

EM: What role does the minister play? Do you sit in the committee?

SU: Not at all. The whole process does not involve the minister. As a minister I only get reports which I present to cabinet on the development.

EM: A lot has been said with regards to the tenders awarded to Intratrek. Did the ministry perform due diligence before tenders were awarded?

SU: Due diligence was done and the Zesa tender committee awarded the tenders to Intratrek so as to rebuild the infrastructure. They made a choice based on what the company said was able to deliver and according to the committee, their specifications were met.

EM: But it is now coming out that owners of the company are ex-convicts and have cases of drug trafficking. Does it matter to you that your ministry is working with such people?

SU: The choice was made on whether the company met the selection guidelines. The tender committee saw it fit to award the winners. In fact the whole process began long back, way before I was minister because I came in on December 10 2014. The process of awarding and selecting bidders was already underway so those saying the minister is responsible are ill-informed.

EM: So why do you say that the selection process was above board?

 

SU: Yes I said the selection was above board because the bidders went through the tender committee. So that is why I said it was above board.


EM: We understand the Zesa board wants to investigate the tenders awarded to Intratrek. Will that lead to reversal of the awards?



SU: That decision can only be reached at if the company fails to deliver. We will sit down with the board and look into all the issues they may be raising and find an amicable way of resolving the issues. Our mandate is to make sure we provide electricity and that has been achieved because we no longer have blackouts as we used to experience.

EM: Still on energy deals, we understand the project costs could have been inflated over the years. A good example is the Kariba South which was initially pegged at US$355 million then jumped to US$533 million. Can you explain why?
SU: I have repeatedly said that ministers are given reports from those doing the technical issues in the ministry. We have engineers and financial directors who go through these things and submit to us. Our role is on policy implementation only.

EM: Minister you were recently exposed by the media as having given a directive that a private public relations

(PR) company should run Zesa’s PR affairs when there is a fully fledged PR department. What happened?

SU: That is wrong to say I directed. The people approached me and I said there was nothing wrong if they wanted to help us for free. We have since stopped them from doing anything for us. In fact I did not give a directive. I only referred them to Zesa Holdings so it was up to the management to decide.

EM: Then minister there is the issue of your wife who is said to be involved in the running of the ministry. What is your comment on that?

SU: The minister who was appointed by His Excellence President Robert Mugabe is Dr Undenge not Mai Undenge. Have you ever seen her attending meetings or going to cabinet? If not then why should people say that?

Am I not allowed to be visited by my wife at my office and why should that happen to me only? I think people have run out of ideas on how to tarnish my image.