Zinara, Univern ties raise stink

Harare–Former Zimbabwe National Roads Administration (Zinara) CEO, Frank Chitukutuku, left his post in a huff in 2014.
His contract was due to expire in March 2015 but he offered to leave by December 31 2014 to “pursue personal business”. 
by Veneranda Langa/Obey Manayiti

by Veneranda Langa/Obey Manayiti

Potholes

Potholes

Investigations conducted by The Standard in partnership with Information for Development Trust (IDT), a local non-profit organisation promoting access to information on governance, established that Chitukutuku, indeed, subsequently took up a post as CEO of Farm Pride, a local business entity.

Farm Pride was registered in June 2015 under company number 4954/2015 and is an upmarket venture running a number of businesses that include fresh vegetables and passion fruit exports, tractor sales, land development, properties, general wholesale, retail and transport hiring.

The company directors are Chitukutuku and his wife, Nyasha, while the listed shareholders are Christopher Kavumbura (50%) and Livingstone Nyabani (50%).

It is not yet clear why Chitukutuku, who once worked as an internal auditor at the Air Force of Zimbabwe (AFZ) for 12 years, could not wait until the expiry of his contract.

What cannot be doubted, though, is that, during his tenure as CEO from September 2008, Zinara was dogged by a series of corruption-related scandals.

Zimbabwe has been among the worst performers on the Transparency International (TI) Corruption Perceptions Index (CPI) and other trans-border governance barometers for a long time.

For instance, it was the 19th most corrupt country in the world in 2013, then 18th the following year and 17th in 2015, according to TI.

Part of this poor ranking is driven by reports and evidence of corruption within State Enterprises and Parastatals (SEPs).

Zinara, which was established in 2002 in terms of the Roads Act to enhance the management, maintenance and development of national road networks, features high among these SEPs for reported tender procedures violations and financial leakages.

The investigating team went out to reconstruct the corruption narrative at Zinara, raking out fresh evidence to build on existing information and seeking to establish what action was taken to redress the graft alleged in the procurement of road graders for use by local authorities.

The Office of the Auditor General (OAG), in a 2014 audit report, condemned the manner in which the institution flouted state procurement procedures regarding the purchase of 40 extra graders at a cost of $8 040 800.

In November 2012, Zinara bought 40-motorised graders worth $8 040 800 after going through the correct State Procurement Board (SPB) tender procedures.

The contract was awarded to a company called Univern Enterprises (Pvt) Ltd, a Zimbabwean-registered firm which began operating in 1996. This bit is already in the public domain.

Its directors are listed at the company registry as Laurence Neil Sher and Sherice Sher who seem to have both South African and Zimbabwean citizenship, in addition to Musekiwa Kumbula, who has done consultancy work for the ruling Zanu PF before.

Its CEO is named as Serge Levy and he took up the position in 2014.

Zinara then went further to acquire another batch of 40 additional motorised graders in 2013 from Univern at the same cost as the first tranche.

The graders were meant to service roads in local authorities’ jurisdictions.

In the second instance, Zinara sought permission to acquire more graders from the Transport ministry, which gave the administration the nod but emphasised that proper procedures must be followed.

But Zinara did not heed that advice. Instead of going through the SPB as required, the roads utility just used the same tender number, which investigations revealed as Zinara/01/12, to order the second batch, riding on that contract’s specifications and price of $8 040 800.

There were concerns that local authorities were not consulted, resulting in Zinara procuring, from China’s Sany company and through Univern, graders with snow ploughs which were reportedly unsuitable for Zimbabwe’s sub- tropical climate and turned out to be fuel guzzlers.

The graders from Univern were delivered at $174 800 before value added tax (VAT) and the final cost was $201 000 each, while the same graders in countries like South Africa cost around $130 000.

Despite the controversy surrounding the second procurement, all 80 graders were supplied.

In Zimbabwe, there are two principal legal tools governing public procurement, the State Procurement Board Act Chapter 22:14 and its subsidiary regulation, the Procurement Regulations (2002, S.I 171).

All procurements above $500 000 (Section 30 of the SPB Act) are the responsibility of the SPB, while all tenders below that figure are delegated to accounting officers with the exception of limited tenders.

When a storm kicked up over the acquisition of the second batch of graders, the then SPB boss, Charles Kuwaza, told Parliament that the second procurement must have gone to tender and Moses Juma, who replaced Chitukutuku in an acting capacity, said “there was an omission on our part”, and apologised to a parliamentary committee.

Univern, on its part, insists that it did nothing wrong. It agreed to a tour of its promises by the investigating team and Laurence Neil Sher, one of Univern’s directors, said it was not prudent to question them why Zinara was ordering an additional 40 graders without following proper tender procedures because all they were interested in were business deals.

“We delivered the 40 graders and Zinara then ordered an additional 40 graders which we also provided. The additional 40 were not tendered for, but they used the same SPB number Zinara/01/12 to order them.

“To us as Univern, if you add the number to a tender and you do not change the price and specifications, then the tender is transparent and valid. It was above board,” Sher said. “Every single one of our contracts with Zinara is regularised.”

Yet, as Kuwaza and the OAG pointed out, the additional graders were supposed to be subjected to a new tender and, because the value exceeded $500 000, Zinara should have gone back to the SPB.

Commercial incest

When Juma appeared before the parliamentary committee in August 2014 after taking over from Chitukutuku, he described the anomalous procurement of the 40 extra graders as an “oversight”. That gave the impression that Zinara had, somehow, acted out of naive negligence.

In October 2015, Albert Mugabe, the Zinara board chairperson, described their relationship with Univern as “one of the best public-private partnership arrangements” during a nationwide familiarisation tour by the new Transport minister, Joram Gumbo, to assess the state of the country’s road network.

Facts on the ground, however, seem to contradict that. During the tour granted by Univern, the investigating team made a hitherto unpronounced discovery that betrayed an incestuous relationship between Zinara and Univern.

It was discovered that the Univern premises at Number 77, Coventry Road in Workington — an industrial area on the outskirts of Harare — houses the Zinara call centre.

The 24-hour National Complaints and Information Centre is a state-of the-art facility that houses tolling management and vehicle licensing systems.

Univern uses the space to store graders and other equipment for sale, but a whole fleet of Zinara-branded vehicles was parked there, turning the place into more than just a call centre for the national roads entity.

Tellingly, in 2013, Zinara gifted Univern another deal, which also did not go to tender, for vehicle licensing software valued at $54 million.

The OAG said in a report that the cost of the software was initially not supplied but Zinara would pay Univern 18,5% of its total revenue for 10 years.

Records show that, by end of 2013, Univern had already been paid $21 million, nine years before the expiry of the deal!

Univern, also trading as Southern Region Trading Company (SRTC), was a contributor to the supply of vehicle number plates to the Central Vehicle Registry which falls under the transport ministry.

This is in addition to Univern partnering Zinara in administering toll gates that fall under the roads authority’s mandate.

Mildred Chiri, the auditor-general, in the 2014 audit report, indicated that Zinara had weak control mechanisms, and, among numerous transgressions, also awarded Chitukutuku a monthly salary and representation allowance increases that were above what his contract stipulated.

In January 2016, Gumbo voiced concern over the questionable relationship between Zinara and Univern during a tour of the administration’s offices.

“Government is gravely concerned at the intricate contractual relationship that now exists between Zinara and Univern,” he told the administration’s management.

Univern’s Sher, in an interview during the tour, confirmed they housed Zinara.

“We own the premises where we house the Zinara call centre. We have been on these premises since 1998,” said Sher.

He saw nothing wrong with housing the Zinara call centre, arguing that this was necessitated by the fact that his organisation was running the vehicle licensing system for the roads utility, and the arrangement thus made it easier to co-ordinate operations.

Zinara has its own offices and there was no convincing explanation why the call centre could not be accommodated there.

The roads utility and its board chairperson, Mugabe, failed to respond to questions despite repeated attempts for over two months.

But the obscure relationship between Zinara and Univern dates back to the time when the contract for the supply of the first batch of graders was made in November 2012. Precious Murove, the Zinara director of administration, signed the contract on behalf of Univern while Chitukutuku did so for the roads administration and former board members, Abdul Kassim and Ben Kaschula, witnessed.

It was not clear why Murove signed for Univern, but this raises questions about the legality of the contract since a Zinara official was not supposed to sign on behalf of the company that had been awarded the tender.

 

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