BY MOSES MATENGA
THE perennial water crisis in Harare is most likely a result of corruption that has seen individuals within the local authority turning away good and well-meaning investors and opting for dubious firms for personal benefit.
An investigation by The Standard has revealed that council officials entered into deals with companies they would manipulate for personal gain and in doing so failed to follow correct tender processes.
Some of the deals are now being investigated by anti-corruption authorities including the police, the Special Anti-Corruption Unit in the Office of the President and the Zimbabwe Anti-Corruption Commission (Zacc).
These investigations, which sources say are almost complete have opened a can of worms at Town House. Council officials, who have raised the red flag over the multi-million dollar tender corruption are now being targeted for dismissal to “remove institutional memory” and prevent potential prosecution of senior officials, including suspended town clerk Hosea Chisango.
Chisango, suspended acting chamber secretary Charles Kandemiri, suspended acting finance director Stanley Ndemera, and acting Harare water director Mabhena Moyo, among others, allegedly pushed for the engagement of four Chinese companies without following tender processes in the 2018 US$868 million loan from the China Eximbank without going to tender.
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Documents at hand show that a report presented to a joint meeting of the environmental management committee that sat together with the finance committee in October 2019 authorised Chisango to engage the four Chinese companies based on a falsified report he had allegedly prepared and presented.
Sino Hydro, China Gezhouba Group Company (CGGC), China Geo-Engineering Company (CGEC) and China Machinery and Engineering Company (CEMC) were awarded the contracts that Town House sources say were improperly processed.
As part of the deal, the city contracted Sino Hydro to construct Lyndhurst Sewage Treatment Plant and expand Crowborough Sewage Treatment Plant at a cost of US$238 million, yet according to experts who gave advice to council, the same project could be have been completed for US$120 000.
The matter was reported to under Case Number RRB001125.
“Armed with the commercial contracts the Chinese are now entitled to US$237 million and any cancellation will result in the employer paying huge costs,” a document presented to Zacc and other investigators reads in part.
According to a loan amortisation programme availed to The Standard, had the loan sailed through, Harare would have started paying for the loan on January 1, 2023 for 22 years until January 1, 2045 with the first payment being US$3 343 292 at a total interest of US$39 983 692.78.
This probe seeks to establish circumstances surrounding the presentation by Chisango of the alleged false information to the councillors, who constituted the finance and development committee and the environment committee that resultantly blessed the deal.
“The report had false information,” documents reveal. “It stated that Sino Hydro was still at a pre-feasibility study yet he (the town clerk) had completed detailed studies, designs and priced BOQs (and) it had inflated prices.”
Harare acting mayor Stewart Mutizwa, however, only described the US$868 million deal as “just a shopping basket”.
“It was just a shopping basket.
“It was some kind of hunting,” Mutizwa said while unwittingly confirming that there was no due diligence done in the multi-million-dollar tender.
An expert who spoke to The Standard as part of the investigation said: “Check the cash flows up to 2045, is that a soft loan?
“That is cruelty. In other words, we will be paying US$550 000 every month for 22 years for Lyndhurst Sewage Works only, so it’s the same amount for Crowborough Sewage works, then for Morton Jaffray and reticulation.
“Why not going for BOT or BOOT that are cheaper?”
The investigators are also keen to interrogate the 2010 US$30 million Sidal Engineering and ERAC Pvt Ltd deal that council reportedly awarded for the Lyndhurst rehabilitation project without inviting public tenders.
Some of the documents that form part of the report submitted to Zacc read in part, “It should be noted that the estimated amount required to complete outstanding works for Sidal Engineering and ERAC projects; an estimated additional US$8 million, is required.
“In order to justify the need for such a huge amount the contractual obligations and justification on how the US$24 million and US$5.8 million was spent is required.”
One whistle-blower also pointed out that the project did not comply with Procurement Regulatory Authority of Zimbabwe regulations. Amid all the controversy, the Sidal Engineering deal was terminated without a proper audit, as requested by authorities.
Another scandal that authorities are pushing to further probe is the US$144 million Chinese loan for the refurbishment of the Morton Jaffray Waterworks that has been abandoned with no significant progress having been made.
The project was supposed to have been completed in 2016 according to council projections but underhand dealings, inflation of prices and corruption brought the project to a halt.
A visit to Morton Jaffray as part of the investigations revealed that the Chinese who had camped at the site have since left, following withholding by the Chinese government of the remainder of US$72 million.
The Chinese government cited corruption.
Senior council officials, including then town clerk Tendai Mahachi, former director of water, Christopher Zvobgo, and others were accused of inflating prices for personal gain.
They allegedly bought over 25 posh vehicles for themselves.
The vehicles included three Land Rover Discovery SUVs and Toyota Hilux trucks, among others.
It turned out the vehicles were never used on the project.
In fact, one of the vehicles is now allocated to the mayor’s office, while another is in the hands of former town clerk Josephine Ncube.
The Harare City Council is however, yet to pay back the US$72 million that was used on the project having only paid the interest part of it.
Ironically, Mutizwa said, Harare currently needs US$72 million to address the water crisis while over US$1.6 billion is needed to address all the water problems in the greater Harare area, including work on the Kunzvi and Musami dams.
Harare provincial development coordinator, Tafadzwa Muguti, said investigations on the water loans and deals in Harare were underway and would touch on several issues, including the water crisis.
“Let me say this categorically and boldly without fear,” Muguti said. “We are going to clean out corruption in all local authorities.
“We have so many projects we are probing now to establish how the money disappeared.”
Harare North Member of Parliament Rusty Markham, who was the council’s finance and development committee chairperson when the US$144 million Chinese deal was signed in 2014, said he resigned because council water reticulation deals wereshrouded in controversy.
“One of the issues was the huge loan of about US$144 million for revamping of the water system,” said Markham.
“It was a Chinese loan and was handled by the ministry through (then Local Government minister Ignatius) Chombo.
“Councillors had very little input on it and certainly, as chairman of the committee, I was very uncomfortable because we were not given any sight to the document, the agreement or the interest rate at all.
“l felt I could not take the responsibility of repaying the loan.”
He said a World Bank report after the deal revealed that there was overpricing of the equipment.
This publication established that a number of foreign and local organisations had proposed investment plans for the Harare water crisis but were turned down with authorities allegedly saying that officials favoured only those deals that they personally benefitted from.
A former Cabinet minister said of the water situation in Harare when asked to give his views on why the city had failed to address the problem for years: “lt was just caught up in corruption and mismanagement. There was lack of skill and desire to work.”
*The story is published under the Voluntary Media Council of Zimbabwe Investigative Journalism Fund with support from the European Union