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Lloyd Gumbo Senior Reporter—
Bickering between Zesa Holdings and the State Procurement Board has stalled the installation of prepaid meters that are supposed to be mounted on poles to curb meter tempering and power theft.
It also emerged that the Chief Secretary to the President and Cabinet Dr Misheck Sibanda had requested a list of problematic tenders as part of the programme of action on the Zimbabwe Agenda for Sustainable Socio-Economic Transforma- tion.
Meter tempering has resulted in Zesa losing at least US$10 million monthly in potential revenue.
To stop the vice, Zesa in August last year requested variation of the tender so that prepaid meters would be mounted on poles than on houses.
The power utility accuses the SPB of stalling the variation while the latter says the former had breached procurement regulations by varying terms of the tender without seeking authority from the board.
A Chinese firm, ZTE Corporation is at the centre of the controversy after Zesa cancelled its tender for allegedly supplying “poor” quality meters.
Zesa accused the SPB of protecting ZTE Corporation’s interests by insisting that the power utility must conclude its case with the Chinese firm despite the fact that the two parties had signed a contract terminating agreement.
But the SPB has not yet approved the request claiming the power utility was failing to justify its request and has since given Zesa up to this Thursday to justify the variation, failing which would see the request being rejected.
To that end, Zesa officials accused the SPB of interfering with its operations by seeking to protect the interests of ZTE Corporation.
In correspondences between Zesa and SPB seen by The Herald, the former indicated that it acted above board when it terminated the tender.
“ZTE’s contract was cancelled after they failed to remedy the situation and the cancellation was communicated to them in writing,” said Zimbabwe Electricity Transmission and Distribution Company managing director Engineer Julian Chinembiri in a letter dated September 18, 2013.
“In subsequent contract termination meetings, conditions of contract termination were discussed and agreed on, refer to “contract variation form”.
“Letter of contract cancellation and minutes of meeting with ZTE on contract cancellation, are attached under annexure 111.”
But on February 10, this year, SPB principal officer, Mr Cledwin Nyanhete said: “At the last meeting of February 4, 2014, your officials undertook to provide documentary evidence on the cancellation and/ or termination of contract with ZTE P/L.
“Please provide the details including copies of correspondence with the contractor, minutes of meetings with the contractor or such other evidence in support of the conclusive position.
“For the record, ZTE was awarded Lot C for Item 3 (BS-Type Three Phase Meter) only which had 2000 units. Under the allegedly cancelled contract with ZTE P/L for which proof is still awaited, the board noted that, contrary to your assertions, the contractor appeared to be against the cancellation after further examination of correspondence between the contractor and ZETDC.”
Mr Nyanhete added that ZETDC’s request had “dilated to include new ideas, in the process, ignoring critical areas that require a logical approach and explanation regarding processes and procedures that are necessary”.
Mr Nyanhete said failure by the ZETDC to respond to the questions by Thursday would see the board rejecting the request for lack of merit.
But ZETDC responded on February 19, 2014: “ZETDC is surprised by the assertions by ZTE that the contract was not cancelled when the contractor signed the contract termination agreement. “Copy attached for cease of reference).
Zesa deputy spokesperson, Mr Shepherd Mandizvidza, last week told The Herald that the tender for ZTE had been cancelled after their meters exhibited high failure rate that saw some of them dispensing power for free after credit in the meter was exhausted.
“ZTE was informed of the failure but failed to take effective corrective action. The contract was terminated and ZTE was requested to replace all 3623 meters that had already been installed from the defective batch of 5400. The warranty period was extended from 15 to 24 months and all failures were to be replaced by ZTE. The State Procurement Board (SPB) was formally advised of the decision by ZETDC to terminate the contract with ZTE.
“The SPB appreciates the importance of pole mounting of prepaid electricity meters as it is a security measure for customers to avoid tampering with them. However, we appreciate that procedures have to be followed for the power utility to implement the pole mounting system as it is in the best interests of the nation. Curbing power thefts is an issue that is being approached with a variety of strategies of which pole mounting is one of them. When all the due processes are finalized by the SPB, it will add a leaf to our solutions.”
But SPB board chairperson, Mr Charles Kuwaza, accused the ZETDC of varying the terms of the tender without seeking authority from his board as required by Section 26 of the Procurement Regulations.
“Clearly, it is not illegal to vary contracts, but that must be properly authorized. In trying to seek answers to these questions, many meetings have been held between our staff and ZETDC management resulting in a long letter summarizing the problems which are besotting the contracts with the original suppliers (Finmark, Nyamazela, Solarhart and ZTE).
“At one point, the ZETDC asked the board to increase quantities of meters on the ZTE contract, yet at the same time they were telling us that the ZTE meters were failing to meet the tender specifications. That was absurd.
“ZETDC also told us that they had cancelled the contract with ZTE, but when we wrote to ZTE, they refuted this assertion. We demanded explanations for these contradictions. While we deal with urgent matters promptly, these can only be finalised if the questions we pose are answered satisfactorily,” said Mr Kuwaza.
He said there were many other problems including the actual number of meters and the types required for the whole country.
“That figure has shifted and we are seeking answers to get to the bottom of these inconsistencies. Just last week, as part of the programme of action on Zim Asset, the Chief Secretary to the President and Cabinet asked for the list of problematic tenders and we reported in depth on this very matter,” said Mr Kuwaza.
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