Chinese firms bungling tender awards

Chinese firms bungling tender awards – DailyNews Live 30 June 2014 by John Kachembere

HARARE – Energy minister Dzikamai Mavhaire’s decision to cancel a $1,3 billion Hwange thermal power generation tender awarded to China Machinery and Engineering Company (CMEC), has underscored the growing controversy surrounding the awarding of contracts to Chinese firms in Zimbabwe.

Early this month, government also cancelled the $400 million tender for the construction of Kunzvi Dam, which was awarded to a Chinese firm in 2007.

Zimbabwe awarded the multi-million dollar tender for the construction of the long-overdue Kunzvi Dam to China Jiangxi International Corporation (China Jiangxi) on May 12, 2007 ahead of five local bidders without giving any reasons.

Local firms that had applied for the tender include former Zanu PF MP Oliver Chidawu’s Kuchi Builders, Zhombe MP Daniel Mackenzie-Ncube’s Ncube Burrow, Hydro Utilities, Release Power Investment and Inter-consult.

But in 2012, the project was taken over by Kunzvi Water Development Corporation, a consortium headed by businessman John Mapondera, before it was cancelled this month for, among other reasons, speculative purposes and alleged flouting of tender processes.

Jiangxi International also won a tender to construct Marovanyati Dam in Buhera district in 2003 and was expected to complete it in 2009, but failed to complete the project citing funding constraints.

The dam was earmarked to be a source of livelihood for hundreds of households in the district suffering due to the perennial drought caused by poor rains.

Despite its apparent failures to fulfil its obligations in the country, Jiangxi International was recently awarded to build a 100-megawatt solar plant in Gwanda.

Meanwhile, Zimbabwe has officially awarded the $1,3 billion Hwange Power Station (HPS) expansion tender to Sino Hydro Corporation (SHC) after cancelling an initial offer to CMEC.

This confirms an earlier report by the Daily News that President Robert Mugabe had given an executive order for the replacement of CMEC at Hwange.

Mavhaire confirmed the development last week saying CMEC failed to conclude the contract within the stipulated time frame agreed with government and the Zimbabwe Power Company.

“Sino Hydro were the second highest bidders of the project. We would like to assure the nation that the HPS expansion project remains one  of the major priorities,” Mavhaire said.

CMEC’s tender was terminated last month. It has been more than a year after it had won the rights to rehabilitate the thermal power station.

Government is under pressure to improve supplies of power as it is one of the key services needed in turning around the economy.

According to sources, CMEC was struggling to secure funding.

“Since last year, you would know that these guys (CMEC) have been given more time to execute the engineering, procurement and construction (EPC) contract, but nothing has materialised,” said the source.

Political commentator Francis Mukora said it was highly probable that the Chinese companies do not have the capacity to deliver.

“In which case one wonders how then they could have been awarded those tenders in the first place,” he said.

Mukora noted that there was need to reform the State Procurement Board and the public tendering process.

“The whole tendering process stinks of corruption, which is the easiest line of thinking to pursue given recent disclosures of tenders corruptly awarded to entities that have never bothered to deliver,” he said.

Economist John Robertson said the tender system was at fault and needs to be aligned with international best practices.

“The curious case about Zimbabwe is that we give people contracts to do the work and we also expect them to look for funding,” he said.

“Securing of funding should be an obligation of the government and not companies.

“I don’t think these Chinese companies are at fault.

“As a country we should be able to raise money on our own and pay the contractors to do the job.”