via Zinara in $54m procurement scandal – NewsDay Zimbabwe July 13, 2015
The Zimbabwe National Road Administration (Zinara) is embroiled in a $54 million procurement scandal after it awarded a deal to buy a vehicle licensing software system to a local company without going to tender.
According to the 2014 Auditor-General’s report, the State-owned road authority handpicked Univern (Pvt) Ltd to supply vehicle-licensing software. The same company was in 2013 also awarded a contract to supply road graders without going to tender.
“Zinara entered into a concession with Univern in which the latter was engaged to develop a vehicle-licensing system without going to tender. The total cost for developing the software as at December 31, 2013 was $54 million, a figure that should have gone to tender,” part of Auditor-General Mildred Chiri’s report read.
“This was a contravention of procurement regulation. The cost of the software was not stated upfront, but the arrangement was that Zinara would pay $18,5% of the total revenue collected through the system for a period of 10 years,” the report added.
Zinara was in 2012 appointed the collector of vehicle licence fees after government ruled that local authorities were failing to put to good use funds they collected.
But Chiri stated in her report that Zinara exposed itself to financial loss “due to the purchases that are not at competitive prices”.
“The implications are . . . financial losses arising from penalties charged by the State Procurement Board for non-compliance,” Chiri said.
Besides the purchase of the licence software, Zinara is also accused of illegally buying a top-of-the-range vehicle and office equipment for an unnamed official at the Ministry of Transport.
Furthermore, the Auditor-General raised a red flag on the road administrator for allegedly making some payments to contractors without “proper documentation” to support such transactions.
“Zinara paid Badon Enterprises Civil Projects $1 238 000 and Bitumen Construction $133 979 without valid contracts and proof of tendering for the work carried out at VID depots countrywide,” the audit report read.
Badon Enterprise Civil projects are linked to Chegutu West MP Dexter Nduna (Zanu PF).
“The implications are financial loss due to irregular payment . . . Zinara should follow proper procurement process. Management should ensure that all payments made have relevant supporting documents. The administration should take measures to review and recover all payments that have been irregularly made,” Chiri stated in her report tabled before Parliament for perusal and action.
The Auditor-General also found Zinara wanting after it failed to deduct withholding tax for payments made to various suppliers, which could expose the institution to over $7 million fine by the government tax collector, Zimra.
Among the list of the suppliers who were paid, but not charged 10% withholding tax as they did not produce valid tax clearance certificates are Infralink, a joint venture company with Group Five, Badon Enterprises and Twalumba Civils, owned by the late Zanu PF benefactor Nkululeko Sibanda.