SENIOR STAFF WRITER
Government is in a dilemma on whether to retain or pay US$2 million to Drax SAGL International for the supply and delivery of medicines and consumables as part of a US$20 million contract it later cancelled citing over pricing, the Daily News reports.
This comes as Drax has suggested that the two parties go for arbitration — having sued the government over its cancellation of a US$20 million contract — under which it had already supplied an assortment of goods worth US$2 million.
In an interview with the national broadcatser ZBC, permanent secretary in the ministry of Finance, George Guvamatanga, said the government was in the process of managing how to deal with the US$2 million conundrum as it sought closure to the saga.
“Drax delivered goods worth US$2 million and US$2 million was paid, but there was some complication in terms of the normal know your customer anti-money laundering rules and regulations and even as we speak that money has not been transferred to the supplier and we have ongoing processes to see how it can be managed.
“It might end up with the supplier or it might even come back to us and we might have to engage the supplier in terms of our contract,” Guvamatanga said.
The government had released US$2 million payment for the goods supplied by Drax but payment was withheld by the bank when it queried why it had been released accompanied by a red flag.
Drax is now seeking its payment and has since sued government drugs procurer, NatPharm, over the cancellation of the US$20 million deal under which it supplied goods for US$2 million.
Drax has since proposed two retired judges Justices Moses Chinhengo, Ahmed M Ebrahim and lawyer Advocate Firoz Girach to mediate in the dispute with the government.
In a letter to NatPharm dated August 4, Drax’s lawyers, Samukange, Hungwe Attorneys in line with the general conditions of contract, clause 18.2, the number of arbitrators shall be three and that the seat of arbitration shall be Harare.
Drax was accused of irregularly winning contracts to deliver medical supplies — leading to several arrests, including that of its representative in Zimbabwe, Delish Nguwaya — as well as then Health minister Obadiah Moyo.