GMB faces US$1m lawsuit

the contract to mill 30 000 tonnes of wheat or face litigation for damages and breach of contract.
The lawyers said Mylo Foods was not to blame for the  poor quality flour as GMB had supplied low-grade wheat to the milling company.
“Our client was surprised when you unlawfully terminated the contract, alleging that our client had failed to produce wheat consistent with the quality specifications,” the lawyers wrote.
“As you are aware, this fact is seriously disputed for the following reasons:
(i) The wheat supplied was not of good quality.
(ii) You had your supervisor who approved the specification that had been produced in line with the poor quality wheat that had been delivered.
(iii) The production supervisor did not at all blame our client for the flour that had been produced as he was aware of the poor quality wheat that had been delivered.
“It is therefore not proper for the Grain Marketing Board to blame our client and more so to cancel the contract.”
GMB is still to respond to the letter.
Mylo Foods and GMB signed an agreement on July 23, 2012 for the former to mill 30 000 tonnes of wheat at its Workington plant in Harare under tender number GMB/INFOR/37/05/12 which attracted bids from five other companies.
GMB awarded the tender to Mylo Foods on the basis that the company fully met the tender requirements and had the lowest charge compared with other bids from Blue Ribbon Foods, Victoria Foods, Nulenty Enterprises and Alpha Grain.
A sixth bidder, Mugandani Enterprises, was disqualified for late submission of tender documents.
On August 20, Mylo Foods wrote to the GMB complaining about the poor quality of the wheat the parastatal was supplying for milling.
But the company received no response until September 26, when the GMB wrote back to say the tender had been cancelled.
Before the cancellation of the tender, indigenisation lobby groups had protested furiously at the awarding of the tender to Mylo Foods, whose directors are of Pakistani origin.
The protesters said GMB had violated indigenisation laws under which the milling of grain was one of the 14 economic sub-sectors reserved for locals.
Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere expressed dismay at the sidelining of indigenous millers, saying: “If the GMB has done that, it is in violation of the law.
“We expect everyone to comply with the law and those with grievances must direct them to my office.”
GMB general manager Mr Albert Mandizha denied that the cancellation of the tender was precipitated by  pressure from indigenisation lobby groups and Minister Kasukuwere.
Mr Mandizha insisted Mylo Foods had failed to produce flour of the expected quality, which the company is now contesting.