via Zent transformers saga rages on | The Herald July 23, 2014 by Golden Sibanda
Indian firm PME Transformers will have to meet the cost of storage for transformers it unprocedurally supplied to Zesa Holdings unit Zent Enterprises until the electrical equipment has been fully accounted for.
Zent had been losing millions of dollars in insurance and storage fees for about $16 million worth of transformers received from PME without placing an order.
The value has since been reduced to between $4 million and $5 million after a compromise to use some equipment from the lot, that Zent needed.
Fears abound that there could have been connivance between officials from PME, Zesa Holdings and its subsidiaries for delivery of equipment not requested.
Sources said management at Zent has directed PME to pay for the storage and insurance costs of the transformers until they have been accounted for.
“PME has been told to rent space. They were given warehouse space and should pay rent until the equipment has been accounted for by those responsible,” a source said.
“Zent raised orders for some of the equipment that it wanted to use, but for the other lot it was not possible due to ratings and prices,” the source added.
Efforts to get comment from Zent managing director Mr Tererai Mutasa were futile as his mobile phone went unanswered.
Normally, Zent would raise orders with the Indian supplier depending on the specifications of the equipment it required. Officials from PME would also visit without invitation, with Zent meeting the cost of travel and lodgings.
Zent entered a technological transfer agreement with PME for an exclusive right to manufacture, repair, use and sell power and distribution transformers.
The initial technology transfer agreement was for a period of five years, effective from January 1, 2006 to December 31, 2010. As this agreement was about to expire, another one was signed in November, 2010 for five years.
The irregularities in the deal were also picked up by the comptroller and auditor general in her 2012 annual report submitted to Parliament in March.
The report indicated that as of December 2011 Zent had excess transformers worth US$11 million in stock it had not ordered, but paid the storage costs.
Goods worth US$4,2 million were once delivered to the Manica container depot in Harare without orders, and Zent lost US$34 000 in demurrage costs.
Energy and Power Development Minister Dzikamai Mavhaire had sight of some of the unsolicited equipment when he toured the company in April this year.
Auditor and Comptroller General Ms Mildred Chiri recommended that Zent should engage PME regarding the excess equipment held as consignment stock to offset demurrage and insurance costs incurred against amount balance to PME.
Zent oversees Zesa’s investments in land development, manufacture of electricity end-use equipment and development of IT products and regional markets.