New Zimbabwe.com

Audit reveals massive rot at ZESA, managers evaded tender processes

By Leopold Munhende

STATE power utility, ZESA paid some US$396,000 to companies that supplied it with fuel, cars and insurance in 2015 without going to tender as required by law, an audit by Price Waterhouse Coopers (PWC) has revealed.

The report fingers former top managers and directors who include those suspended late last year and details irregularities in ZESA Enterprise (ZENT) procurements.

ZESA flouted regulations by evading the State Procurement Board (SPB) in a series of payments worth US$396,794, 84 it made to Cell Insurance, Total Zimbabwe (Pvt) Ltd and car supplier Quest Motor Corporation in 2015.

“Cell Insurance were awarded a contract to provide insurance services to ZENT without going to tender. As the ZESA Group owns a combined 44.28% shareholding in Cell Insurance, the company is an Associate of the ZESA Group.

“Cell Insurance was supposed to have been appointed via an informal tender process. Tender documents and quotes from other insurers were not on file,” further reads the report.

“As a result of the appointment of Cell Insurance without following the correct informal tender process, ZENT incurred costs amounting to US$243,141.42 for insurance services.

“Mr. (Tererai) Mutasa and Mr. (Norman) Chengeta breached Section 5(3) of the SI 171 of 2002 by selecting Cell Insurance without following informal tender procedures.”

Also implicated in the report is former ZENT Finance Director Farai Tichawangana in the deals.

Mutasa and Chengeta are part of the 16 top ZENT bosses who were suspended late last year at the height of investigations by PWC.

Cell Insurance received seven payments ranging between US$23,941.51 and US$52,816.44 without going to tender.

After invoicing US$123,400, ZENT paid US$103,500 to Quest Motors for the supply of four JMC vehicles without going through the SPB.

To conceal the act, ZENT approached the SPB for approval a month after paying a US$50,000 deposit on 21 August 2015.

Total Zimbabwe received just over US$50,000 to supply fuel to ZENT only because they could offer a smart card facility.

ZESA is battling to deal with a power crisis that has threatened to leave the whole country in a blackout.

Energy Minister Fortune Chasi has blamed consumers’ failure to pay bills as the major reason the parastatal is failing in its mandate to supply electricity.

Some consumers who recently spoke to NewZimbabwe.com have pointed out ZESA management’s opulence and corruption as the reason behind the recent crisis.