Diamond Centre trial date set

via Diamond Centre trial date set | The Financial Gazette – Zimbabwe News 20 Jun 2014

THE High Court has set a date to hear the case between the Zimbabwe Diamond Technology Centre (ZDTC) and companies that were involved in its construction when the project started before they were elbowed out. ZDTC owner, Lovemore Kurotwi, was dragged to court in 2011 by the aggrieved companies over non-payment of US$5 million in fees and interest.

The dispute between Kurotwi and the contractor, architects, engineers and quantity surveyors of the building, among other professionals, will be heard on July 7 before Judge Dube in terms of the Rule 215 (2) of the High Court of Zimbabwes, 1971 as amended by Statutory Instrument 13/92.

In a case filed through the High Court under reference number HC 4972/11, Kenmark Builders (Private) Limited; Studio Arts Incorporated; NMC Consulting Engineers; Promantity Quantity Surveyors and Vanguard Engineering Services are suing for unpaid fees. As are Producan Investment (Private) Limited; Astra Steel & Engineering Supply (Private) Limited; and Pherosteel (Private) Limited in the same suit.

The nine plaintiffs claim Kurotwi, through his ZDTC, owes them a total amount of US$4 847 000 in unpaid fees and interest. According to court documents, ZDTC entered into agreements with each of the plaintiffs between January and July 2010 to provide services in the construction of the centre.  Such services ranged from the actual construction, architectural services, consulting and structural engineering, quantity surveying to mechanical and electrical engineering as well as the provision of reinforcement steel.

Sources close to the matter say Kurotwi, who disputes the total amount claimed by the plaintiffs, only paid an initial establishment fee of US$281 000 and nothing else even though three certificates to certify progress of construction were further issued. Failure to pay by Kurotwi saw the team of plaintiffs downing tools and leaving the site in early 2011 before filing a suit in May of the same year.

An undeterred Kurotwi has been continuing with construction with another contractor, SM Builders, which, according to the plaintiffs, is in breach of the builders lien which forbids that another builder takes over the construction site without the consent of the former, in this case Kenmark Builders. Upon realising that construction had resumed despite the ongoing dispute, plaintiffs, three months, ago filed an urgent application with the High Court seeking an interlocutory interdict to halt construction. The court, however, turned down the plaintiffs arguing that the case was not urgent.

Tinashe Robin Tanyanyiwa, lawyer from Manase and Manase law firm representing ZDTC, told the Financial Gazette Tuesday that they were fighting to ensure their client’s interests were safeguarded. “We can’t really comment extensively because the case is under way, but we maintain our client’s position that of ensuring that our client’s interests are served,” Tanyanyiwa said.

Meanwhile, industrialists in Manicaland last month raised concerns over the construction of ZDTC, arguing that the diamond cutting and polishing facility should be located closer to the mineral source. This is not the first time this concern has been raised. In previous years, concerns of the same nature have been raised but to no avail. The fresh concerns were made directly to the Minister of Industry and Commerce, Mike Bimha, last month.

Confederation of Zimbabwe Industries (CZI) vice president, Henry Nemaire, said it defies logic for government to have Marange diamonds processed far from the source. “In as much as we support the need for value addition and beneficiation of mineral resources, we question the logic behind the construction of a diamond cutting and polishing centre far away from the location the resource is being extracted from,” said Nemaire.

“Diamond processing should take place here in Manicaland. The diamond cutting and polishing centre should be constructed in the province where the resource is located,” he charged. His calls were echoed by CZI past president and Allied Timbers group chief executive officer, Joseph Kanyekanye.

“If you look at the set-up of the industrial sector, you will note that specific industries are located near the resource, such can be said about the timber industries. We have timber plantations in Nyanga and Chimanimani, which is why there is heavy presence of timber processing industries in Manicaland province,” said Kanyekanye.

Giant timber industries such as Allied Timbers, Border Timbers Limited, the defunct Mutare Board and Paper Mills, among others, are all situated in the timber rich eastern province. “Such should be the case with diamonds,” said Kanyekanye.

The industrialists have since appraised the Industry Minister Bimha who took heed of the call. Although Bimha has agreed that it made economic sense for the eastern region to have a diamond cutting and polishing centre as government steps up value addition under the Zimbabwe Agenda for Socio-Economic Transformation; he hastened to point out that he did not have jurisdiction over the construction of the diamond centre and would engage Minister of Mines and Mining Development Walter Chidhakwa over the matter. Chidhakwa could not be immediately reached over the matter. — News Editor (Additional reporting by Kenneth Matimaire)