…Authority exceeding 2.5% threshold
…Pushes for Zimra to collect toll fees
The treasury has called the Zimbabwe National Road Administration (Zinara) to order after it emerged the parastatal is spending more than the prescribed threshold of revenue collected amid moves for the Zimbabwe Revenue Authority (Zimra) to collect toll fees.
Under the Road Administration Act, Zinara is supposed to retain 2.5% of the revenue collected.
The violation of the law by the roads administrator has riled the Treasury which is accusing Zinara of embarking on extravagant spending such as splashing cash on hiring vehicles for its top executives.
There are reported tensions between top Treasury officials and Zinara board chairman Mike Madanha who has strongly resisted the move.
A well-placed source said the Cabinet is also divided with some ministers pushing for the return of Zimra as the sole revenue collector for the country to improve transparency and accountability.
“Government is divided over Zinara’s continued collection of revenue citing duplication of roles between the revenue collection agencies.
There is an argument that the country at the moment cannot afford two revenue collection agencies duplicating roles,” a source said.
Madanha confirmed that the roads administrator has been exceeding the prescribed threshold, adding that a lot has changed since Zinara was appointed to administer the roads. He said the 2.5% prescribed in the Road Administration Act was only for administrative fees but roles have since changed when Zimra and local authorities stopped collecting fees.
“When Zinara came in, it was Zimra that was collecting money for tollgates revenue for a commission and Zinara was only getting 2.5% for administrative fees.
Therefore, when Zimra and local authorities stopped collecting that meant Zinara assumed all those roles,” Madanha said.
“Therefore, what Zinara is now getting has increased to around 6% and the 50% being talked about is a lie.
We feel that 2.5% prescribed in the Act has actually gone down looking at the prevailing exchange rate.”
Madanha said he was not aware of a push to come up with a single revenue collector.
Last year, Zinara splurged close to US$2m on hiring luxury vehicles for its top management and board members. Business Times is informed that the current executive has allegedly been milking the road fund administrator despite the dismissal of previous top executives over corruption allegations and gross funds mismanagement.
An audit report for Zinara exposed massive financial abuse in which ZWL$142m was paid to illegally hire road maintenance contractors.
The audit done by Grant Thornton, covered the period between 2011 and 2016 when Zinara was being led by former chief executive Frank Chitukutuku.
The report exposed abuse of funds by the roads administrator where during the period under review, between 2011 to march 2016, Zinara collected US$589.2m and only disbursed US$160m (27.3%) and gobbled close to US$428.4m (72.7%).
Zinara of late has been subject to massive scrutiny. It is alleged that the parastatal spent about 12 months paying full salary and benefits concurrently for two chief executives – then suspended Nancy MasiyiwaChamisa and acting Mathlene Mujokoro.
The audit report presented to Parliament’s Public Accounts Committee by the Auditor-General shows that Zinara spent US$60,000 on the female managers’ hairstyles, including a payment of US$25,000 to one hair salon.
A further US$4,000 was used to buy and install gym equipment at the senior executives’ houses and also paid for executives’ food hampers and entertainment. In 2016, Grant Thornton also exposed a cocktail of irregularities such as weak internal controls on the road fund, which resulted in losses of millions of dollars involving scams where senior executives allegedly manipulated the parastatal’s more than 59 bank accounts to siphon public money for personal gain.
Similarly, another audit report for a period ending December 31, 2017 reported weak internal control systems, which resulted in Zinara disbursing millions of dollars to provinces through the parastatal’s employees’ personal bank accounts.
Chitukutuku, who is facing fraud allegations, has since been given an ultimatum to explain how he acquired assets worth over US$20m.
Critics say what is happening at Zinara is a tip of the iceberg as abuse of funds is rife in government departments and state owned enterprises and parastatals.