BY HARRIET CHIKANDIWA FINANCE and Economic Development permanent secretary George Guvamatanga has revealed that many companies are fleecing government by overpricing their goods and services.
“At the moment, we have an issue of overpricing by service providers and contractors, some of you members might not have been too happy with me over hotels’ pricing. I am not happy with the way most hotels are charging government,” Guvamatanga told Parliament’s Public Accounts Committee (PAC).
“The pricing that has been given to government is extortion, we should not accept these extortionate prices. It should come to a stop, our budget as government is not in parallel market pricing. Charge us fairly.”
Guvamatanga made the remarks yesterday when he appeared before the committee to explain the Public Procurement and Disposal of Public Assets Act in light of non-delivery of commodities by some suppliers resulting in government losing a lot of money.
“The Public Procurement and Disposal of Public Assets Act stipulates that when necessary to enable effective implementation of the contract, a procurement contract may provide for the procuring entity to make advance payment of the price. The total amount of advance payment made under the procurement contract shall not exceed the prescribed percentage of the total contract price.
“Unless otherwise stipulated in the contract, an advance payment shall not be made unless the contractor furnishes an advance payment guarantee covering the amount of the advance payment and satisfies any other terms set out in the bidding documents,” Guvamatanga explained.
He then gave an example of one Harare hotel where MPs were last Friday charged $168 000 per night for a US$120 room. The hotel was reportedly using a rate of US$1:$1 400.
“At this rate, one would ask for an advance payment of at least 30%. If that person goes at the auction and gets money, the advance payment given to him/her covers all of his/her costs, meaning that any other remaining balance is now profit and that money will easily be taken to the parallel market. So over and above issues that were arising from these service providers and contractors demanding advance payment is creating problems of non-delivery, we have stopped doing advance payment for other service providers such computers, cars, toners. Most of them do not do due diligence. We are now trying to be more efficient and effective in our procurement processes,” Guvamatanga added.
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He also indicated that the Finance ministry was considering further mechanisms to protect public finances.
PAC chairperson Brian Dube then asked Guvamatanga to explain what his ministry has done to ensure the US$10 billion over-expenditure by government from 2015 to 2018 is audited by Auditor-General Mildred Chiri’s office.
“We engaged Treasury to arrange for the submission of appropriation accounts for validation by the AG, with such submissions to be made through Parliament. The required appropriation account amendments will be submitted to Parliament in two batches — 15 under minutes dated April 14, 2021, and a further 11 under cover of our May 31, 2021 minutes.
“The outstanding submissions relating to the then Ministry of Small and Medium Enterprises was availed to the AG’s Office together with the second batch of submissions made to Parliament, which the former (SMEs ministry) indicated had not been passed on to them,” Guvamatanga said.
Legislators then warned him against shunning Parliament business, after he said he failed to turn up to give oral evidence last week due to other commitments.