Council in US$57m tender storm

KUDAKWASHE CHIBVURI

The City of Harare is embroiled in a tender storm and trying to evade procurement processes to sneak in a company to provide the Enterprise Resource Planning (ERP) for an inflated figure of US$57m against the advice of both government and the Procurement Regulatory Authority of Zimbabwe (PRAZ), it has emerged.

Council is losing millions of dollars due to a porous billing system necessitated by the absence of the ERP which is critical for managing city properties, financial records, contracts, and business entities.

The existing system has reportedly been manipulated to facilitate widespread corruption.

According to the Auditor General’s report in 2022, council had lost over US$200m while observers also claim that over a billion dollars has been lost over the years due to the porous system prone to leakages.

In the ensuing melee, government and PRAZ have teamed up to blast the Mayor Jacob Mafume-led council, accusing them of corruption that has led to Harare being labelled rotten and “corrupt.”

Council also accuses PRAZ of delaying the process to acquire the ERP while the procurement authority insists the manoeuvres by Harare to acquire a system for over US$57m stinks of high level corruption.

PRAZ CEO, Clever Ruswa, yesterday told Business Times how the city officials have for years tried to manipulate the procurement processes for personal gains saying the procurement authority has since engaged the government to intervene.

“Since 2019, when they tried to switch service providers, we provided a bridging gap for almost a year. They returned after two years, claiming they conducted a procurement process to award another service provider a contract worth about US$57m,” said.

“We questioned why they cancelled a previous tender that cost between US$75,000 and US$100,000, only to seek a new contract for US$57m. They eventually negotiated down to $51m, but we found no value for money,” he added.

The PRAZ boss highlighted procedural irregularities noting that a five-member delegation travelled to South Africa for “due diligence”, allegedly funded by a supplier, an action he deemed inappropriate under public procurement laws.

 “There were many grey areas, leading to a council resolution last May to proceed with a supplier for almost five years under unfavourable contractual terms.”

“When faced with that now, that’s when we formally now brought to the Ministry of Local Government using the provisions of Section 24 of our Act now to assume the responsibility of overseeing the procurement of tax services because the back and forth was not good for the general citizenry. So we recommended that the Ministry take charge of that procurement and we have since written to them and I think they are coordinating issues from that effect.”

Local Government Minister, Daniel Garwe, confirmed knowledge of the ERP scandal and that the government was dealing with the issue.

Garwe indicated that he was awaiting findings of a commission of inquiry to address the rampant corruption in the metropolis.

“The city has rotten to the core (and) led by corrupt leaders who want to manipulate the ERP system,” Garwe said.

However, Mafume has on several occasions blamed PRAZ for delaying the procurement processes claiming there was a lot of corruption and the state-owned entity.

“The thievery around the ERP issue is of biblical proportions,” he asserted, accusing PRAZ officials of corruption.

According to minutes of a council meeting in August last year, Mafume reported that he had met with the PRAZ executive over the contract between the City of Harare and Quill Associates for the re-engagement of the BIQ ERP System.

In his report, Mafume said the city had contracted Quill Associates and had then sought condonation from the procurement authority.

“The Mayor expressed concern that PRAZ had taken a long time to respond to the City’s request and that the latter institution was expected to assist the City in acquiring an ERP System as detailed in the meeting to enable it to implement a system to curb suspected theft of Council money and assets,” the minutes reads in part.

Council, according to the minutes, was mulling engaging the courts.

Despite Mafume’s counter-accusations, Princess Mahari, Managing Director of Groupville Technologies, a local partner of Quill Associates, nailed council for its alleged corrupt tendencies on the issue of the ERP.

Mahari was testifying before the Commission of Inquiry set up by President Emmerson Mnangagwa to probe the financial situation in Harare where she said there was resistance from council officials and the Mayor.

Groupville began its collaboration with the Harare City Council in 2005, implementing an ERP system designed to streamline procurement and financial processes.

Despite the system’s clear benefits, city officials stalled its implementation.

“With the Harare system offline, the city’s operations deteriorated. We warned them that this would create opportunities for fraud. Internal reports soon revealed alarming discrepancies, including transactions conducted outside the system and payments executed without proper oversight,” Mahari said.

“Without a unified system, discrepancies went unnoticed, and funds vanished,” she noted.

“We had ongoing discussions with city officials about missing revenue streams but they ignored our warnings,” Mahari added.  “It was as if they preferred the chaos that allowed them to operate without oversight.”

A council official, Alfred Guni, who is the acting Head of Revenue Collection for the Harare City Council, testified to the commission about the pervasive nature of corruption within the council.

He implicated Mafume, suspended Town Clerk Engineer Hosiah Chisango, Acting ICT director and financial director accusing them of deliberately delaying the process and wanting the status quo to remain to enable looting.

“A significant amount of council money has found its way into private pockets,” Guni said.

“I approached several officials with recommendations to prevent the looting of funds, but the moment you raise these issues, they start to fight back.”

He detailed the existence of various cartels within the council, including those involved in markets, traffic, and gravel

Reuben Akili, director of the Combined Harare Residents Association, expressed concern about the council’s inability to implement an ERP system, which he believes has enabled massive looting.

 “The absence of a functional ERP has led to serious revenue losses as funds have been misappropriated,” he said.

“The local authority’s lack of a functional ERP system has led to significant irregularities within the council. The billing system, which should be integrated within the ERP, is currently flawed. Some residents pay their bills but do not see the deductions reflected, while others continue to receive bills despite having made payments.”

“The absence of an ERP system has resulted in serious revenue losses for local authorities, with funds reportedly finding their way into officials’ pockets. The ERP issue has become a long-standing legacy problem for the council.”

Residents have lost confidence in the financial transparency of the City of Harare, leading many to refrain from paying their bills, effectively turning the billing system into a “bottomless pit.”