Ministers caused Zesa rot: Audit
©️ A DAMNING forensic audit report by PricewaterhouseCoopers Advisory Services has revealed that the rot at Zesa Holdings was caused by interference from former Energy ministers which disrupted the smooth running of the country’s power utility, the Daily News on Sunday can report.
The report revealed that former ministers Elton Mangoma, Dzikamai Mavhaire and Samuel Undenge would give directives to Zesa officials and, as a result, the company lost huge amounts of money.
The report said Mavhaire instructed officials to cancel a tender for power aggregators and ordered them to directly appoint Powertel as the aggregator.
Mangoma is also alleged to have verbally directed the Zimbabwe Electricity Distribution Company (ZETDC) to appoint OK Zimbabwe as the sole electricity prepaid vendor.
“Such appointments could have resulted in financial prejudice to ZETDC,” the report said.
The report further said Undenge directed officials to make a payment to Intratrek without a bank guarantee in place.
“We held discussions with (Powertel managing director Samuel) Maminimini, (finance director Powertel Marceline) Tshabalala and Mukarati (head of information technology, Zesa Holdings). We gathered from the discussions that a tender was floated for aggregators and Powertel was one of the respondents to the RFP.
“ZETDC revenue assurance manager (Engineer Wilfred) Shereni, in our interview with him, further indicated that former minister Mavhaire directed that Powertel be appointed. He further stated that on December 13, 2013, after the directive, the adjudication committee sat and documented that the tender had not been evaluated following a decision to cancel the tender.
“We also noted a letter dated February 8, 2016 written by the GCEO (group chief executive officer) addressed to the Clerk of Parliament wherein the GCEO confirmed that Powertel’s appointment was a directive from the ‘shareholder’. (ZETDC managing director Julian) Chinembiri then wrote to the State Procurement Board (SPB) on December 13, 2013 (based on the letter from SPB dated January 2, 2014 (Annexure C3.4)) requesting approval to cancel the tender ‘due to technical irregularities’,” the report reads.
Due to the cancellation of the tender, the country’s power utility lost US$900 million.
“We then had sight of a letter dated January 20, 2014 in which the then Permanent Secretary in the Energy ministry, Partson Mbiriri, stated that the ministry did not have objections to the appointment of Powertel as the aggregator.
“In the said letter, Mbriri also stated that the 238 electricity vending system should be anchored on State machinery/State enterprises for Powertel to benefit from the programme and to advance the cause of mutual support, indigenisation and employment creation (Annexure C3.5).
In another scandal, former minister Mangoma appointed OK Zimbabwe as the sole prepaid electricity vendor —pilot phase 6552.
“During the investigation, we also gathered from … Mukarati that before Powertel was appointed as the aggregator for the sale of prepaid electricity, OK Zimbabwe was appointed as the sole electricity vendor of prepaid electricity by Zetdc.
“We then followed up with Shereni on the appointment of OK Zimbabwe and he informed us that OK Zimbabwe was appointed under the pilot project for the sale of prepaid electricity. We also gathered from Shereni that OK Zimbabwe was appointed as a result of a verbal directive which was issued by former minister Mangoma during his time as Energy minister.”
According to the report, ZETDC incurred irregular expenditure in the form of commission paid to OK Zimbabwe with a value of US$518 174,28 in relation to the unprocedural appointment of OK Zimbabwe.
However, the court had cleared Mangoma on the matter.
In another incident, Undenge and his former permanent secretary Mbiriri were given cars which were not found in the books of the power company.
In an audit report, the two were given VW Amarok vehicles by Zesa.
“We requested vehicle asset registers for the four Zesa Holdings subsidiaries (ZETDC, ZPC, ZENT and Zesa Holdings) from the accounts department for the period 2012 to 2018. From each asset provided, we inspected for the vehicle makes and the allocated personnel and did not identify vehicles of the make VW Amarok allocated to former minister. . . Undenge and permanent secretary . . . Mbiriri.
“We then inquired with J Mapillar on whether there were any vehicles of the make VW Amarok acquired on behalf of staff or other personnel, we gathered that the only VW Amarok allocated to a staff member belonged to G Churu (group legal advisor) in the year 2014 at an acquisition value of US$70 000.”
The audit report reveals that companies which were supplying cars to Zesa are not specialised in the distributorship of vehicles.
“We requested for the motor vehicle suppliers’ list and payment history to all the motor vehicle suppliers.
“From a list of motor suppliers that supply Zesa Holdings and its subsidiaries, we noted that the bulk of the suppliers did not deal in car supplies.”
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