By A Correspondent- The Harare City Council (HCC) has been hit by a fresh corruption scandal after a tender to supply 10 000 Tyvek Covid-19 protective overalls worth ZW$51 520 000 was awarded without going to tender to a briefcase company, whose owner was blacklisted for similar allegations, an internal audit has revealed.
The confidential audit report by City of Harare audit manager Archibald Nyamurova, also revealed that prices for the equipment were heavily inflated, while the city’s procurement and compliance officer and buyer Abel Dzuke allegedly took delivery of a brand new Isuzu KB300 truck as a kickback for facilitating the shady deal.
Suspended Harare Town Clerk Hosiah Chisango ordered the audit after learning of the fishy deal in which the shelf company, Eqstra Hardware and Electrical, was cherry-picked to supply the Tyvek coveralls under order number 0105212.
The audit recommended that the matter be referred to the Zimbabwe Anti-Corruption Commission (Zacc) for further investigation.
The initial purchase order (0105212) for Eqstra Hardware and Electrical 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 was way cheaper, despite having more units.
The shelf company did not appear on the shortlist of qualified bidders published weekly by the Ministry of Health and Child Care and thus Council officials flouted Circular 1 of 2020, the 25-page internal audit report seen this week by the Zimbabwe Independent reveals.
Council was prejudiced of ZW$19 720 000 (or ZW$5 972 per unit) because of the overpricing of the Tyvek suits by Eqstra Hardware and Electrical. The auditors noted that suppliers recommended by the Ministry of Health and Child Care had significantly lower prices. Surprisingly, Council officials who entered a contract with the hardware company on May 8, 2020 also acceded to an upward price variation by the company from ZW$2 997 to ZW$5 521 per unit on June 18 despite the fact that the exchange rate remained constant at rate of US$1 to ZW$25.
Auditors further discovered that the council procurement department abused the request for quotations method to accept a request to vary and overprice the products.
As the report’s findings show, Council only received 10 000 kits, instead of the 15 000 it had procured from Eqstra Hardware and Electrical, and in the process of the controversial transaction lost US$1 030 400.
In simple terms, Eqstra Hardware and Electricals, as revealed by the audit report, lacked the financial wherewithal and capacity to meet the City’s requirements.
“Council was deprived of its right to receive ZW$25 760 000 worth of stock as result of the 5 000 units which were not delivered to Council. Eqstra Hardware and Electrical 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 per unit. In US dollar terms, a benefit of $ 1 030 400 was forgone as a result of the non-delivery.
“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.
The Zimbabwe Independent now understands that already, heads are rolling at Town House after authorities ordered an investigation into the deal and suspended the contract with the hardware company, pending finalisation of inquiries.