MP’s firm bilks $1m Zinara funds

via MP’s firm bilks $1m Zinara funds | The Herald July 20, 2015

CHAIRMAN of the Parliamentary Portfolio Committee on Transport and Infrastructure Development and Chegutu West legislator, Cde Dexter Nduna, has been sucked into a million-dollar Zinara road rehabilitation scandal after his company got a contract, but failed to deliver despite being paid.

Documents in The Herald’s possession show that Cde Nduna’s company, Badon Enterprises, was hand-picked by Chegutu Rural District Council to repair the 28km Musengezi-Makwiro gravel road in Mashonaland West Province.

“The council was awarded funding under the periodic disbursement category. Records show that the council entered into a contract with Badon Enterprises on 22-10-10 for the rehabilitation of Musengezi-Makwiro Road (20km) which was later extended by a further eight kilometres,” reads an audit report prepared by Zinara.

The audit was carried out in November last year.

“The following exceptions were noted — the following information was not availed to audit — bidding documents of competing contractors and resolutions detailing appointment of contractor, Badon Enterprises Pvt (Ltd), and the consulting engineer, Dande Civil Projects,” noted the report.

The contract was also overvalued.

“The consulting engineer had originally recommended in his tender evaluation report that the contract for the rehabilitation of the 20km stretch be awarded to Badon Investments (Pvt) Ltd at a cost of $681 100. However, the contract entered shows that Badon Enterprises (Pvt) Ltd was awarded at $828 451.25,” it said.

The audit report notes that the absence of bidding and resolution documentation created a gap as to full compliance of tender regulations “that specifically requires the evidence of such documentation to ensure transparency and achievement of value for money objective”.

The audit also observed that while the contract had a 10 percent provision for contingency budget overruns, that threshold was surpassed.

The budget overrun (overpayment) shows that Badon Enterprises was paid $828 481.25 for 20km and $450 000.00 for the additional 8km, translating to $1 278 848.25.

The audit notes that $2 212 508. 52 was paid as “ledger amount” signalling an overpayment of $933 660. 27.

All in all Badon Enterprises was paid $2 212 508 52 for the 28km road stretch repair work.

“The unjustified increase of $147 351.25 bid amount and contract amount has the implications that the adjudication process was not fairly done. The figure recommended by consulting engineers was $681 100 on the justification of being the low cost bidder. The contract was however entered into for $828 451. 25. This effectively defeats the issue of having a consultant,” reads the audit report.

It recommended that Chegutu Rural District Council provides the bidding and resolution documentation to expedite completion of the audit report.

“Justification is required on why the recommended bid price was adjusted by $147 351. 25. Reasons for such justification should have been well documented within the contract or minutes.”

In its response, the Chegutu Rural District Council said it was not involved in the road maintenance deal.

Council’s management said it was not involved by Zinara in the road works carried by Badon Enterprises during the rehabilitation of Musengezi-Makwiro. The road was not completed and bridges were swept away by rains.

Chegutu Rural District Council further stated that it “was not involved in the direct payments of the contractor, Zinara can answer better”.

Zinara went on to suspend Chegutu Rural District Council from receiving funding from the road administrator until it avails all information around the rehabilitation of Musengezi-Makwiro road.

“Due to the above mentioned limitations compounded by the fact that council failed to avail the documentation as promised within the given timeframe, audit recommends that the Road Authority be suspended from receiving any further funding from Zinara until all promised information is received,” reads the audit report.

In an interview, Cde Nduna said his hands were clean and that if there was a problem, council was answerable.

He denied that his company failed to complete the rehabilitation of Musengezi-Makwiro road as per contract and also justified the payment for the 28 km road stretch.

“We carried out all the work and the amount ballooned because it included such structures as bridges,” he said.