Airport robbery: runway deal inflated by $13mln, cars for CAAZ officials

Source: Airport robbery: runway deal inflated by $13mln, cars for CAAZ officials | The Source June 23, 2016

HARARE (The Source) – A deal for the construction of a new runway at Harare International Airport was inflated by $13 million without approval, the Auditor General has said in a new report that raises questions over the handling of airport tenders.

Two officials at the Civil Aviation Authority of Zimbabwe (CAAZ), the agency in charge of national airports, accepted vehicles from a contractor, while a truck meant for the Victoria Falls airport project turned up at a gold mine in Bindura.

According to an audit by the Auditor General, released on Wednesday, a contract awarded by CAAZ for the rehabilitation of the Harare International Airport runway was priced at $22 million in 2009. However, by 2015, the price had unaccountably risen to $35,7 million, a variation of $13,6 million. This increase in the tender cost had not been approved by the state tender board and there is no documented explanation for it, Auditor General, Mildred Chiri says in her report.

“I was not availed with documentary evidence to show that the State Procurement Board (SPB) had approved the contract price variation,” the report says.

The true value of the runway contract remains difficult to pin down.

In July last year, CAAZ general manager David Chaota told a parliamentary committee that the original cost of the project was $5 million, but that $11 million was now required to complete repairs on the runway, Africa’s third longest at 4,725 metres. At the time, Chaota said CAAZ was seeking a $2 million loan from FBC Bank for the project. Chaota had previously warned that the runway would be unusable within three years if no rehabilitation was done.

However, the 2012 national budget shows that government had set aside $7 million for the project.

On why the cost of the project had risen without SPB approval, CAAZ management, in its response to the auditor’s questions, responded: “Management will engage SPB for the approval of the variations as the project is still ongoing and we are hopeful that the approval will be granted before the completion of the project.”

No explanation is given on why the cost had ballooned by $13 million. However, CAAZ says the contractor and consultants on the project had requested for an additional $500,000 as “remobilisation fees”.

The Auditor General also pointed out shady dealings in a separate airport contract.

A project to build a new airport terminal at Victoria Falls was granted “national project status”, which meant all vehicles purchased for the project were granted tax rebates. However, the audit found a dump truck imported for the airport project being used at Timsite Mine in Bindura.

This was “in violation of rebate conditions that stipulate that the equipment should be used solely for the Victoria Falls project”, the report says. The truck also appeared to have changed owners, as its registration was changed from ACU 9493 to ABS 6729, suggesting the new ownership.

The AG’s report does not say who owns Timsite Mine. However, a search by The Source revealed its directors as Munyaradzi Banda, a former Zanu PF central committee member expelled from the party last year, as well as Leonard Chiketa, Yang Linhai, and Cheng Minglei. However, Timsite mine’s ownership appears to be disputed.

Last year, Chiketa was accused of kidnapping co-director Cheng Minglei, driving him to the airport and forcing him to leave for China. At the time, police were quoted as saying they were keen to interview Minister of State for Mashonaland Central Provincial Affairs Martin Tafara Dinha over the case.

The link between Timsite and China Jiangsu International, the contractor of the Victoria Falls airport, remains unclear.

The audit also found that two CAAZ official had received vehicles from China Jiangsu International. The two Toyota Hilux vehicles had been meant for the project at Victoria Falls, but were being used by the two CAAZ officials in Harare.

“The vehicles were being used in Harare and not Victoria Falls while the employees in question had their personal issue vehicles. The circumstanced leading to the allocation of the vehicles to the employees were no documented and I could not verify whether the allocation was appropriately authorised,” the Auditor General reports.

CAAZ admitted that the officials had received the cars from the contractor. CAAZ says: “The vehicles have since been withdrawn from the two individuals and the authority is investigating the circumstances under which they were issued the vehicles by the contractor.”

According to the audit, CAAZ’s financial losses widened in 2014 to $21,4 million in 2014, from the $14,8 million loss it made in the previous year.