Source: Parly stops shady power plant deal | The Herald April 27, 2016
Lloyd Gumbo Senior Reporter
Parliament has stopped the implementation of the 120 megawatt emergency Mutare Power Peaking Plant after it emerged that the State Procurement Board awarded the tender to a company that had failed to meet technical specifications stated by the Zimbabwe Power Company (ZPC).
The SPB unilaterally awarded the tender to technically non-compliant Helcraw Electrical (Pvt) Ltd because it charged $92 million against a recommendation by ZPC to award the tender to technically- compliant Pito Investments that had charged $120 million for the emergency diesel power plant.
Pito Investments is owned by Mr Alexio Chideme, while Mr Farai Jere is the proprietor of Helcraw Electrical.
The technical requirements were that the winning bidder must build at least three units with at least 30MW to 40MW per unit to ensure that when one of the units is down, the power plant would remain with 80MW running.
ZPC management and Pito Investments representatives told the Parliamentary Portfolio Committee on Mines and Energy yesterday that the SPB proceeded to award the tender to Helcraw Electrical, whose bid had two units of 58MW each, contrary to a ZPC recommendation of Pito Investments that met the technical requirements of at least three units of between 30 and 40MW.
But the committee chaired by Zanu-PF MP for Masvingo Urban, Cde Daniel Shumba, took the ZPC to task on why it did not disqualify Helcrow Electrical after realising that they did not meet the technical specifications.
ZPC operations director, Engineer Joshua Chirikutsi, who represented managing director Mr Noah Gwariro, told the committee: “ZPC adjudication recommended the award of the tender to Pito Investments at $120 million, which was then reviewed by State Procurement Board who awarded the tender to Helcraw at a price of $92 million.
“Due diligence was then carried out by ZPC on Helcrow and its technical partners. After the due diligence we then sought a waiver from our ministry through Zesa Holdings and we got a response to proceed to the contract signing as awarded by State Procurement Board. The contract was duly signed on the 31st of December 2015.”
ZPC project manager, Mr Peter Mapfumo, also admitted to the committee that Helcrow Electrical did not meet the technical specifications hence their decision to award the tender to Pito Investments.
He said after making their recommendation to SPB, they then got an SPB resolution “telling us to go Helcraw way”.
However, legislators queried how Helcraw Electrical’s name made it to the SPB when they should have been disqualified by virtue of failing to meet the technical requirements.
Cde Shumba demanded to know how ZPC forwarded Helcrow Electrical’s name to the SPB when they failed to meet the technical requirements.
“From your evaluation here, the reason you scored Helcraw less than Pito was purely on technical,” he said.
“It’s here and even the tender board confirms it. You only scored Helcrow higher on price because their price was $92 million yet they were not bidding for the same thing.
“In terms of process, once you got the commercial envelop, you should have set aside the non-compliant bids so that you invest in the adjudication of compliant bids. Be that as it may, you proceeded to evaluate all the bids and sent to the tender board the non-compliant bid and then the tender board reversed your recommendation and went for the non-compliant. But you opened that window by evaluating further a non-compliant bid.”
Cde Shumba said Helcraw Electrical documents that the ZPC presented to the committee indicated they proposed to build two units of 58MW each making it impossible for the plant to have 80MW running in the event of one plant failing.
“What was your motivation in including something that violated your own technical specifications, your RFP specifications and your board approval? Why did you proceed to waste company resources?
“You must remember that you travelled all the way to India to look at these non-compliant technical units and still proceeded to sign a contract for things you knew were not consistent with your technical specifications.
“Your technical visit to India to look at the wrong items, you used State money, State resources and came back and still concluded a contract that is in violation of specifications, technical recommendations and board approval,” said Cde Shumba.
Zanu-PF MP for Mashonaland West, Cde Jennifer Mhlanga, also demanded to know why the ZPC proceeded to evaluate Helcraw Electrical’s bid when they had failed to comply at the technical level.
“Why did they proceed to include Helcrow when in the first instance it did not meet the specifications? If they had thrown Helcraw bid away because it didn’t meet the specifications, we wouldn’t be discussing about this,” she said.
Added MDC-T MP for Bulawayo East, Ms Tabitha Khumalo: “What then made you come up with a decision that Helcrow qualifies after realising that the financial envelop is proving otherwise? Technically already they have failed and should be disqualified. Then why did you score them in the first place after realising that the funding was wrong?”
Manicaland MP, Ms Fanny Chirisa and Musikavanhu MP Mr Prosper Mutseyami (MDC-T), said ZPC was complicit in the irregularity by forwarding Helcrow Electrical’s bid to SPB.
But ZPC supply chain manager, Mr Alfred Maunganidze, said the ZPC told the SPB the reasons why they did not recommend Helcraw Electrical.
“In our response we told them that Helcraw’s total capacity of the generators offered were less than the requirement of 120MW.
“In the commercial envelop, Helcraw clearly indicated that they will provide two units against a requirement of tender document of at least three modular units. Helcraw technical proposal also clearly states that the units will be AE63.4A ,which would provide the gross output of 58MW each unit as indicated in the document that we gave them,” said Mr Maunganidze.
However, Cde Shumba concluded: “For the purposes of noting, we don’t want to close the stables when the horses have already bolted. You are aware now that this issue is before this committee up to the end when we have concluded this process.
“We do not expect that you shall be in violation of Parliament procedures or in contempt of Parliament by proceeding and further complicating this bid which we are sure you are going to hold at the stage that it is at both financially, technically and legally until such time that you implement our final report. You aware that Parliament is one of the three pillars of the State and we are seized with this matter. We don’t expect you to circumvent us it has got consequences to you and your corporate.”