.. SA firm outfoxes local dealer
TINASHE MAKICHI
INVESTIGATIONS EDITOR
The Rural Electrification Agency (REA) has provoked a potentially damaging confrontation with a local supplier which was allegedly muscled out of a multi-million United States dollar deal by a South African company, Business Times can reveal.
It is understood that the local supplier, Garget Electrical, was over the past two years awarded two tenders -No.REF/COMP/37/09/2018 and REF/COMP/04/02/2019-to supply various line materials to REA.
The contracts were, however, terminated last year after it had part delivered some of the materials.
Garget is now claiming more than US$1.4m as compensation for the cancelled deal.
Garget Electrical is claiming that REA kicked it out of the deal at the last minute only to realise that REF had behind its back engaged another supplier, Afritek, a South African firm.
Afritek has been a major supplier of Garget’s electric materials for years.
It is also understood that the REA deal with Afritek was not subjected to the Procurement Regulatory of Zimbabwe (PRAZ) for scrutiny and authorisation since the amount was higher than the US$250,000 required to be procured by a procuring entity without referring it to PRAZ.
Business Times can report that Garget has since taken the matter to PRAZ and the Ministry of Energy and Power Development.
Garget is claiming deliberate frustration citing that it was muscled out of the deal in a clandestine manner.
It is also alleging connivance between REA top procurement bosses, the South African supplier and other local companies.
A letter dated November 20, 2019, written by Garget Electrical managing director Garland Mutendereki to the head of REA public relations department, expressed disquiet over the manner some of REA’s procurement officers conducted themselves over the matter.
“The public officer clearly showed he is an interested party and we have not been afforded fair treatment as we have reservations as to how the public officer handled our first delivery. We are now pleading through your office to have an internal resolve into the matter,” Mutendereki said.
In another letter addressed to REA chief executive officer, Joshua Mashamba, dated November 11, 2020, Mutendereki claimed losses from the cancellation of the orders and also demanded payment for the orders.
“We need to make good our financial standing and image by proceeding with procurement so as to beat Christmas shutdown and the pending Chinese New Year. The Christmas break is coming and there are also challenges globally because of Covid-19restrictions,” Mutendereki said.
“The revenue we expected to earn from the tenders was in excess of US$1.4m excluding loss of income caused by the order cancellation. We therefore present our financial claim of US$1m as a once off payment or with our payment plan or otherwise your better offer yet to be disclosed to us.”
He added: “We look forward to the payment towards invoice GE0267 with interest at the current prescribed rates.”
Afritec representative Maxwell Banda confirmed getting an order from Garget but did not supply the said products.
“We were given the order by Garget but we never supplied it because they failed to pay before we delivered and we cancelled the order. It is Garget that is quoted and whenever quoted directly to REA,” Banda said.
In a response letter seen by Business Times, REA said Garget’s claims lacked any legally sound basis and cannot be considered at all.
REA said it was the aggrieved part in this matter since Garget failed to deliver the goods even after being offered a longer delivery period.
“Besides making threadbare financial claims, your submissions have not shown how REA’s actions, if any, have directly hindered you from performing during the +6 months’ period the contracts (orders) were left open.
Our rural electrification projects can only be driven by serious bidders who see the need to perform within agreed time frames,” read part of REA’s response.
“We have made it clear to you that the purchase orders issued to you constituted valid contracts. This explains why you affected part deliveries of 155 out of 7,895 stay rods units on the order of Stay Rods 5/8 to our Central Stores on April 17, 2019 (against the purchase orders) though they were rejected after quality inspection.”
REA further said it reserved the right to terminate the contracts or orders since Garget had defaulted on delivery.
According to REA the decision to terminate the orders was neither illegal nor unreasonable.
