Minister in US$134m tender scam 

Source: Minister in US$134m tender scam – The Zimbabwe Independent June 7, 2019

LOCAL Government minister July Moyo has been implicated in a massive tender scandal at the Harare City Council (HCC) after he allegedly directed the local authority to award a Netherlands-based company a €120 million (US$134 million) contract for the construction of a waste-to-energy plant at the Pomona dumpsite on the outskirts of the city without following tender procedures, it has emerged.

ANDREW KUNAMBURA/CHIPA GONDITI

The company — Integrated Energy B.V (IEBV) — signed a Memorandum of Understanding (MOU) with government, through the Local Government Ministry and council last month. This is despite the fact that the company did not participate in the tendering process, according to highly placed City of Harare sources. The sources said IEBV is not among three companies, which responded to a tender invitation for the project last year. Investigations by the Zimbabwe Independent also showed that IEBV was only officially registered in 2016 as a Dutch postbox company. The company is owned by a Dutch national called Klodian Zoto.

The Independent tried to find contacts of the company, but realised there are no official contact details, web address or emails except for a physical address, given as Hoogoorddreef, 15 1101 BA, Amsterdam.

According to the Procurement Act, any contracts exceeding one million dollars have to be awarded through a public tender.

Highly placed City of Harare sources said council initially issued an invitation to tender for the project in 2016, but did not award a successful bid. Documents further show that another tender invitation was issued in November last year, but before it was awarded, an MOU was signed between HCC, government and IEBV. Sources say that IEBV approached Moyo when the second invitation was issued and offered to construct the plant on a build, operate and transfer arrangement for an as yet to be specified period.

Moyo then directed council to consider IEBV for the project, notwithstanding the ongoing tendering process.

The tender scope entailed construction of a waste processing plant with energy recovery by producing electricity, which would be fed into the national grid.

“The original tender was issued by the City of Harare on the 23rd of August 2016. Twelve bidders submitted their proposals, but no award was made. Another tender invitation was issued on the 2nd of November 2018. Three bidders submitted their proposals in line with the Procurement Regulatory authority stipulations. No award has yet been made from those three companies. We were therefore surprised when we learnt that on the 7th of May, government and HCC had signed a Memorandum of Understanding with IEBV. All this came from the minister himself and we don’t know what his interests are,” the source said.

City of Harare spokesperson Michael Chideme confirmed that the tendering process was not completed.

“The 2016 tenders were adjudicated on and there was no winner. No company was successful. On the current tender, it is still under adjudication. There are investors which came through government and council management was mandated to speak to the investor regarding the proposals. Nothing has been awarded so far,” Chideme said.

Harare town clerk Hosiah Chisango said he was unaware of what transpired in the deal, but would inquire with the local authority’s supply chain manager. “I am now waiting for our supply chain manager to look at the documents so that I am able to provide the correct information,” he said.

However, according to minutes of a recent Joint Environment Management and Finance and Development Committee, Chisango persuaded councillors to approve the deal. He indicated to them that IBEV had already secured the necessary financial requirements for the project.

“Company capital of around €120 million (US$135 million), €5 million (US$5,63 million) bank loan and the rest would be financed through suppliers’ contracts and periodic payments by government,” Chisango said, according to the minutes.

The joint committee then debated the matter and enquired whether council was going to enter into a separate MoU with the proposed partner, to which Chisango said a separate agreement would be signed. He also told the committee that he would ensure that the partner adhered strictly to specific timeframes stated in the MoU.

On the strength of his recommendations, an HCC full council meeting held three weeks ago resolved that the local authority should enter into negotiations with IEBV for the development of a waste to energy plant in Harare and report to council once the deal was finalised.

Moyo told the Independent he did not know the company, although he supports the deal in principle. He also said he was not involved in awarding the company the tender.

“I do not know anything about this company and I have never had any dealings with them, neither do I know of the arrangement they had with City of Harare. However, from an environmental point of view, we do actually encourage it because it is offering a renewable source of energy that is clean and easy to manage,” Moyo said.

“I will get in touch with my people, so that they brief me on this company because we encourage such sustainable development.”

Investigations showed that IEBV was also blacklisted in Albania, where it was controversially awarded a tender to construct a waste incinerator in the country’s capital city, Tirana, in 2017, in a deal in which it would have managed the project for 30 years. Again, the deal was entered into without following tender procedures.

According to the Albanian press, IEBV was the only company which that took part in the tender, making an offer of around €128 million (US$143,4 million). The Albanian press also reported that its proposal to build the incinerator in Tirana was sent to that country’s ministry of environment just three months before it officially existed as company.

After reviewing the unrequested offer, the council of ministers decided to open a tender procedure on December 7, 2016, making sure that IEBV received a bonus of 8%, basically guaranteeing that it would receive the concession.

The deal led to huge street protests in Verri, a suburb adjacent to the waste incinerator outside the Balkan nation’s capital Tirana in January last year. The protesters were brutally assaulted by police. Protesters wanted the deal to be cancelled, arguing that the company was being paid huge amounts of money despite doing a shoddy job, according to the Albanian Daily News.

Just on December 27 last year, Albanian Prime Minister Edi Rama sacked half his cabinet (14 ministers) in response to the massive protests. They included the country’s former finance minister Arben Ahmetaj, who was identified by the press as having influenced the deal because he was Zoto’s friend.

The deal has since become a huge political issue in the country, with its opposition party leader, Jorida Tabaku, releasing documents indicating that IEBV was paid 33 billion Albanian Lakes, an equivalent of US$291 million, despite the fact that the incinerator is yet to be completed.