via Government cancels ZESA tender Sunday, 26 January 2014 by Darlington Musarurwa and Brian Chitemba SundayMail
Currently, electricity consumers have to queue in order to purchase electricity vouchers at Zesa outlets but once they close units will no longer be available. The recent cancellation of the tender meant to select aggregators means consumers have to put up with queues for a bit longer.
Electricity users on the pre-paid platform will continue to endure the inconvenience of purchasing their units at a few local outlets as the tender to choose aggregators to retail them was recently cancelled over allegations of deep-seated corruption and favouritism, it has emerged.
Currently, about 350 000 pre-paid meters out of a targeted 800 000 have been installed.
Information gathered by The Sunday Mail Business indicates that the tender to appoint aggregators for the resale of pre-paid electricity units – tender number ZETDC/HO/04/ 2013 – which closed on October 29, 2013, attracted more than 40 bidders who were willing to cash in on the vending business.
It is understood Zesa (Zimbabwe Electricity Supply Authority)’s system could only interface and accommodate at least four aggregators.
However, allegations emerged during the bidding process that companies that were earmarked to win the bid had been pre-determined by corrupt officials from both Zesa and the State Procurement Board (SPB).
Questions were mainly raised over the adjudication process as one of the bidders, Denallaire Technologies, trading as Revma, was part of the adjudicators.
Furthermore, Revma “was awarded a tender by ZETDC and SPB in 2011 to install a new power-billing system to which they duly installed their Itron 3E System”.
One of the companies that was involved in the process picked up the information and subsequently wrote a damning letter dated November 20, 2013 addressed to SPB and copied to the Minister of Energy and Power Development, Dzikamayi Mavhaire, Deputy Minister Munacho Mutezo, the Anti-Corruption Commission, ZETDC (Zimbabwe Electricity Transmission and Distribution Company) managing director, Zimbabwe Republic Police Serious Fraud, Parliament of Zimbabwe and the Office of the President.
“I am writing to register a complaint with the on-going ZETDC tender process and to pre-empt a clearly designed corrupt adjudication process. I want to complain on the fact that one of the bidders is part of the adjudicators, a situation that is clearly illegal and corrupt.
“One Denallare Technologies (Pvt) Ltd t/a Revma Zimbabwe (Itron) was awarded a tender by ZETDC and SPB in 2011 to install a new power-billing system to which they duly installed their Itron 3E System.
“ZETDC has gone to invite bids for the appointment of electricity vending aggregators through Tender Number ZETDC/HO/04/ 2013 the process which is currently under evaluation. The invitation to tender document says the Itron 3E software supplier (which is Revma) is going to carry out conformance testing for shortlisted bidders and in this case Revma Zimbabwe, who holds the Itron Agency in Zimbabwe.
“However, the same company, Revma, has also tendered for the aggregator tender which means they will technically evaluate other competitors and themselves. Clearly this is a serious breach of ethics and ZETDC and Revma are acting corruptly,” read part of the letter, adding: “We have a situation where Revma is competing with other bidders in a contest they are going to adjudicate. In short, Revma as the ZETDC technical partner and Itron 3E provider can simply not participate in this tender.”
What also seemed to irk bidders was the fact that two of the directors in Revma, including Mr Nick Bakaris, who allegdly influences the company, are foreign nationals.
Noted the letter: “One Nick Bakaris, who is a director of this company, is Greek. The Indigenisation law as it is now does not allow for people like him to participate in this type of tender (a reserved sector) but already he is attempting to vend electricity which is under the reserved retail and wholesale sectors.
“Nick being of Greek origin is not considered as an indigenous person under the Act even if he may be Zimbabwean, period.”
Revma, however, has two local shareholders, Themba Mpofu and Phyllis Muzhingi. There were various other allegations from different stakeholders that made the whole tender process both murky and messy.
Minister Mavhaire subsequently cancelled the tender under PBR 1695 of December 19, 2013.
In an interview last week, Senator Mavhaire confirmed that Government had indeed cancelled the tender after unearthing anomalies that could have ultimately affected workers.
“If we had allowed the aggregators to sell electricity pre-paid electricity units, consumers were going to pay more because these businesses would increase the price to make a killing while at the same time, burdening the consumers.
“We couldn’t allow such a situation to prevail in Zimbabwe. This is not a jungle, so we had to cancel the tender last month. Government has since notified the aggregators, some of whom were bragging in bars that they had already won the tender,” said Senator Mavhaire.
Presently consumers purchase electricity units at Zesa offices and once the offices are closed many are forced to sleep in the dark. In the capital, consumers have the convenience of buying power from a few retail outlets that close at 10pm, but these centres are not easily accessible to the bulk of energy users.
Government is, however, currently engaging State enterprises NetOne, Powertel and Zimbabwe Posts (Zimpost) to introduce convenient ways for pre-paid electricity resale.
“We are finalising finer details of a new deal with the companies (NetOne, Powertel and Zimpost). We may come up with a new system similar to that of sale of pre-paid airtime used by mobile network operators so that consumers access power conveniently,” explained Minister Mavhaire.
The State Procurement Board could not immediately comment as questions e-mailed to the executive chairman, Mr Charles Kuwaza, were not responded to at the time of going to press. Of late, controversies surrounding the SPB over flawed tenders have been rising, with stakeholders accusing the board of prejudicing Government projects and the fiscus.
It has mainly been blamed for stretching the approval process for tenders and in some cases awarding tenders to either incompetent companies or blacklisted firms to carry out Government projects.
In 2012, Zimbabwe Revenue Authority Commissioner-General Mr Geshom Pasi claimed that a contractor appointed by the SPB to build staff accommodation at Beitbridge Border Post had failed to complete the work more than three years after being given the work.
Government has already paid for the project. He further indicated that the SPB was frustrating efforts to give the work to another contractor. The pre-paid meter system and the sale of electricity units are considered as projects that are crucial for the turnaround of Zesa as they could significantly improve cashflow while efficiently distributing power.
Analysts believe that if successfully implemented the projects will improve Zesa’s credit rating and boost its capacity to attract both funding and project partners. Last week, Cairo-Egypt based Afreximbank (African Export and Import Bank) announced a US$35 million facility for Zesa to complete its prepaid meter project.