Zimbabwe News and Internet Radio

Univern duped ZINARA out of US$2 million in supply of motor graders

By Nyashadzashe Ndoro

The Zimbabwe National Roads Administration (ZINARA) was allegedly defrauded of US$2 251 200 by Univern Enterprises during the purchase of 40 motor graders for the Department of Roads and District Development Fund (DDF) between 2012 and 2013.

Auditor General Mrs Mildred Chiri
Auditor General Mrs Mildred Chiri

According to the Auditor-General’s Report covering years between December 2017 and 2019, the ZINARA Board made a resolution for the purchase of 40 Motor Graders for the DDF on 23 March 2012. The invitation to tender closed on 21 August 2012 and 39 bids were received.

On 17 September 2012, Mr Frank Chitukutuku wrote a letter to the State Procurement Board (SPB) making their recommendations for the supply and delivery of forty (40) motor graders.

Top of the list was Univern Enterprises which undertook to supply 40 JLS 220 graders, to be delivered within eight weeks at a price of USD $201 020 per grader.

On 19 October 2012, the SPB awarded the tender for the supply and delivery of 40 graders at a total cost of USD $8 040 800 through the Procurement Board Resolution (PBR 1854) and on 19th November 2012, ZINARA entered into a contract with Univern.

According to the report, Mr Chitukutuku the ZINARA CEO signed on behalf of ZINARA, witnessed by Mr. Kaschula and Mr. Kassim. Mr. Kasere signed on behalf of Univern with Mr. P. Murove strangely signing as a witness for Univern.

The tender documents issued by the State Procurement Board provided for the following material terms:

“the goods would be delivered within eight (8) weeks; the purchase price would be paid within seven (7) days from the date of delivery; delay of the delivery of the product would result in a penalty fee of 1% of the total cost of the contract, per week up to a maximum of six weeks, upon which the contract would be cancelled.

“Contrary to the above ZINARA and Univern signed a contract that in Clause 7(4) provided that 30% of the total purchase price, in the sum of USD $2 412 240 would be paid up front,” read the report.

“Firstly, the agreement was clearly a variation of the tender conditions set and defined by the SPB. Secondly, it lacked any provisions to protect ZINARA. Missing provisions found in any standard capital expenditure (Capex) agreement included the following:

“Warranties by the supplier in respect of the fitness of the product sold;
Delivery frameworks including termination provisions in the event of the supplier’s default; and
Penalty clauses for delayed or defective performance,” the AG’s report added.

The Auditor General discovered that contrary to the agreement and tender documents, the forty (40) graders were delivered seven months later on 14 June 2013, yet ZINARA had been paying to Univern’s various accounts the total sum of USD $9 515 240 leading to an overpayment of USD $1 223 640.

The report says ZINARA was again entailed to a 1% penalty up to a maximum of six weeks and thereafter the agreement would be cancelled hence in this case ZINARA would have been entitled to a penalty fee of USD $80 400 per week which total comes to USD $2 251 200 over seven months.

“Meanwhile, between 10 December 2012 and 21 May 2013, ZINARA had been paying to Univern’s various accounts held at Nedbank, CBZ, NMB, POSB, ZABG the total sum of USD $9 515 240.

“The agreement was not cancelled and had the penalty clause been enforced for the seven months delay in performance then ZINARA would have been entitled to a penalty fee of USD $80 400 per week which total comes to USD $2 251 200 over seven months.

It was also established that the motor graders so supplied developed serious technical problems and the unanswered question is whether or not the Sany SJLS 200C model supplied was better than the SJLS 220 tendered for. Nehanda Radio