Cottco in half a million tender storm; Parliament Committee on Agric to engage ZACC for thorough investigations

By Reason Razao | Senior Reporter

UNDERFIRE Cotton Company of Zimbabwe (Cottco) is in the eye of a corruption scandal after the textile firm allegedly contracted a cotton ginning service provider without going to tender and following procurement procedures, it has emerged.

Cottco which was summoned by the Parliamentary Portfolio Committee on Lands, Agriculture, Fisheries, Water and Rural Development last week was represented by the Chief Executive Officer Priscilla Mutembwa, Financial Manager Jacqueline Dube and the group’s Chairperson Sifelani Jabangwe.

The textile firm which recently made headlines for failing to pay its employees and farmers revealed that as part of cost-cutting, the company had opted to contract cotton ginners that were close to the farmers contrary to statutes contained in the Procurement Act.

For 5000 Mt tonnes of cotton seed, Cottco is charged 10c per kg which translates to US$ 500 000.

Committee chairperson Saul Maburutse queried Cottco over the number of ginneries saying: “How many ginneries do you have at Cottco who are other people you are subcontracting and how do you do it, do you float a tender?”

In response, Jabangwe said Cottco has six ginneries adding that in the past two years, the company had been able to gin themselves.

“We have six ginneries and I think in the past year or two we have only been ginning ourselves. But previously when there was a lot more cotton, there would be tall ginning including maybe this year.

“There is a recommendation to do tall ginning because the crop in Mutare, which would normally be genned in Chiredzi is currently behind to the extent that we can’t take the crop to Mutare and the recommendation that we have is to tall gin at the nearest ginnery,” Jabangwe revealed.

Cottco CEO said the move was justified based on a cost-benefit analysis the company conducted.

“Because the cotton is close to that ginnery, so we have to think of transportation cost, and as you are aware we are already struggling,” said Mutembwa.

“So that was the only gennery in the area that we could use and we want the cotton to be collected and transported to the nearest because we are suffering for not having enough money to pay for transport. So that had to be taken into account,” she added.

In response, Maburutse criticised Cottco’s decision to forgo the procurement process.

“So you do not do tendering, you just decide that you want to go to this one because it is the nearest and then that’s it. US$ 500 000 which you decide on your own.

“If this committee is to report you to PRAZ to say that they have ignored the procurement procedures, that’s corruption and we can easily advise the Zimbabwe Anti-Corruption Commission to visit you. We will engage ZACC to come and look into it” said Maburutse.

Following the revelations, the committee chairperson quizzed Jabangwe over the management systems at Cottco; “Board chair if this committee says you have a serious management crisis at Cottco will you deny it? If your management could decide without going to tender .”

Jabangwe in response said the recommendation had come from the management.

“At the moment that’s what management was recommending. But in terms of a service, this is procurement of a service that ought to go to tender.

“If they decide to do that without going to tender, they know there are procurement procedures because one of the things that we have been working on is ensuring that they align all procurement with the Procurement Act,” said Jabangwe.