Home » Governance » ’Harare Water Loan Entrusted to Incompetent People’

THE US$144,4 million loan extended to the City of Harare by the Export and Import Bank of China (EximBank) for water and sewer plant refurbishments is open to abuse as it was entrusted to incompetent people, a report commissioned by the city fathers into the usage of the facility has revealed. Council in May appointed a five-member team to investigate allegations that city bosses blew over US$2 million of the loan on personal top-of-the- range vehicles.

The purchase of the vehicles raised speculation that the city bosses were feasting on the loan and this led to council initiating an investigation into the performance of the facility. Although the report says there was nothing wrong in the purchase of project vehicles, it questioned the competence of the members of the project team steering the water and sewer reticulation project.

As part of its investigations, the probe team, led by Greendale councillor, Stewart Musarurwa Mutizwa, interviewed five members of the project team except for Town Clerk, Tendai Mahachi who did not turn up for the scheduled interview on the grounds he was not feeling well.

Mahachi spent the entire investigations period on sick leave and only returned to work recently.

It is Mahachi, in his capacity as the project executive, who appointed the project team which comprises water engineer Christopher Zvobgo, supply chain manager Never Murerwa, finance manager Stanley Ndemera, legal aisor Jane Mawunga and chief of sewage works Engineer Mabhena Moyo. In its investigations, the probe team made a startling discovery that the project team members appointed lacked experience and did not have the required competency to manage a project of that magnitude. It singled out legal aisor Mawunga and the logistics manager, Moyo.

“The interviews conducted revealed that some of the project team members lack the required competencies and experience to deliver on this project, in particular the legal aisor and the logistics management,” reads part of the report.

“There seems to be lack of adequate co-ordination among the project team members. There is no demonstrable ownership and accountability of the project by the team which is attributed to lack of management skills and experience by the team members, very few of whom have project exposure. There are inadequate legal, commercial, contract, management, logistics, procurement or finance skills.”

Mawunga is being blamed for not giving council sound legal aice in the drafting of the loan agreement as the contract shows ‘glaring clauses heavily staked in favour of the contractor (the Chinese bank) that are open to abuse. “It is recommended that council outsources commercial contract law experts in order to guide council on project management, losses and risk aversion. The in-house legal minds do not have expertise in specific commercial contracts including the one in question,” reads the report.

The probe team visited the water and sewer reticulation plants such as Morton Jaffray Water Works, Firle sewerage treatment plant and Borrowdale Brooke Pump Station where they discovered that there was very little to justify the US$84 million which has so far been spent. This amounts to 58 percent of the loan which has so far been disbursed yet the project is still in its infancy and according to the report, it is 25 days behind schedule. The whole project was supposed to take 36 days.

Some of the equipment, the report says, was still under manufacture in China which means it is still a long way before it arrives. “From the sites that were visited, there is nothing of significance that was seen in terms of project works. It points to an inordinately large percentage of the loan which has been disbursed. As stated earlier (in the report, no works have started),” the reports continues.

The report suggests that the incongruence in the work on the ground and the money disbursed for it could be attributed to the bloated costs of some of the equipment, a situation which further serves to indicate the gross incompetence of the logistics side of the project team. Investigations revealed that in some cases, the contract prices were four times higher than the actual prices of the equipment so far procured.

“No net present value computations were performed to support the decision to go for this project at the given cost using funds borrowed offshore. The failure to perform these financial viability computations carries the high risk of embarking on a project which results in increasing the cash flow burden on the City of Harare and ultimately the ratepayers and residents,” reads the report.

According to the investigating team’s report, the city bosses gave priority to purchasing personal cars ahead of service vehicles like tractors and trucks which was against the stated bill of quantities. According to the report, the bosses bought 21 vehicles against the 15 project team members. The vehicles include three Discovery 4 vehicles, three VW Amaroks, four Ford Rangers, five Isuzu KB250s and six Toyota Hilux double cabs at a total cost of close to US$2 million.

The probe team also decried lack of coordination between council and City of Harare management saying it was fuelling wanton behaviour by the latter. “The investigation team is of the view that council must take practical and effective ownership of the project and ensure that management submits regular progress reports to council.”

Harare mayor Bernard Manyenyeni, who commissioned the probe team, said he was still digesting the contents of the report after which he would give his opinion. “I am not offering an opinion at the moment. I am still digesting its (the report’s) contents and I will meet with the investigation committee chairman on Saturday morning after which I will be able to comment. Councillors’ committees will be tasked to implement all the recommendations,” Manyenyeni said.

In an interview with the Financial Gazette, Harare Residents Trust director, Precious Shumba, condemned council management for entrusting the project to incompetent officials. “This shows poor decision-making whereby one appoints an incompetent person to run a big project that needs expertise to bring out positive outcomes in due time. The failure to address the concerns of the ordinary citizens and concentrate on the protection of incompetent administrators is costing ratepayers huge sums of money. Every citizen has a responsibility to ask the authorities why they are promoting this cruelty on the citizens of Harare,” he said.

The report also blamed the lack of a proper handover-takeover from former Harare mayor, Muchadeyi Masunda who signed for the loan on behalf of council in 2010, to successor mayor, Manyenyeni. This was said to have created the confusion surrounding the loan, including lack of clarity on dates, amounts, among other details, at the onset of the project.

Source : Financial Gazette