MUTARE– City fathers have all but conceded defeat in their recovery efforts of US$330 000 paid to a supplier of pipes for the city’s water reservoir project that were never delivered.
The development is one of many instances where local authorities across the country have lost huge sums of money due to failure to conduct due diligence on their suppliers when procuring.
Speaking during a virtual Zimbabwe Coalition on Debt and Development (ZIMCODD) Public Finance Management constituency indaba, Mutare mayor councilor Blessing Tandi said efforts to recover the debt are hitting a brick wall.
Tandi said, the company in question Shitazburg Enterprises was indeed paid US$ 330 000 in 2010 but failed to deliver the pipes in question.
Despite a Mutare magistrate court finding the company guilty of fraud in the tender deal and ordering restitution council has still not recovered anything.
“We are hitting a brickwall in terms of recovering the money from that company. The director of the company Mr Mwashita even wanted to sue our late Town Clerk, Mr Joshua Maligwa may his soul rest in peace, for stating through the Manica Post that council wanted to recover its money.
“Our hands are tied but we are leaving no stone unturned in order to recover this money which council is owed, but this is not as easy,” said Tandi.
Mayor Tandi also revealed that in spite of receiving this payment, Shitazburg Enterprises director Mr Anderson Mwashita has threatened legal action against council for defamation against his company.
Initially in 2009, the Ministry of Finance advanced a US$3 million loan to Mutare City Council to finance water and sewer systems in high density areas, from which it paid US$330 000 to Shitazburg Enterprises as deposit for a US$660 000 tender.
After receiving the loan, which in part was earmarked to upgrade the Dangamvura high density area water infrastructure, the company has failed to replace the pipes, neither has it refunded the US$330 000 paid as deposit.
Since 2015 Attorney General Mildred Chiri has been pointing at financial discrepancies, payment of goods without supporting documentation for transactions and unreconciled accounts among councils in the country.
Mutare city was also fingered in gross financial mismanagement in the AG Local Authorities report which led, the then Town Clerk, to resign under pressure from stakeholders.
Similarly, the 2021 AG report on local authorities also state that Mutare City is using water disconnections as a revenue raising strategy, while it is still owed the US$ 330 000 for undelivered water pipes.
ZIMCODD programs officer Angellah Mandoremba challenged council to instead channel the same energy to recover money from the botched tender deal. She said residents need to be attune to the AG audit reports to demand that councils implement recommendations as well as attending to matters raised.
Mandoremba bemoaned the gaps in the public procurement system.
“We need to understand the challenge whether it’s from the Central Bank, or procurement authorities. We need to, as residents, ensure that there is an energized follow up on these issues residents must hold council to account, with clear follow up plan to demand answers from the council basing on the AG reports.
“Such oversights compromise of service delivery of water, for example the unfinished water project, in some areas of Dangamvura it’s been 23 years without access to water in violation of the right to access portable water, but council is failing to follow up on these debts,” she said.
Mandoremba called for introspection among local authorities in the context of the devolution framework, which places a duty for council to develop capacity to make independent financial decisions.
“How prepared is the council when there is so much financial mismanagement. This is a wakeup call for council to put up sound financial systems, produce periodic reports so that when devolution comes they will be at a good footing to autonomously run their affairs.
“Local authorities in general and Mutare city in particular should clearly deliver their mandate and put in place measure that ensure good governance in their operations,” said Mandoremba.
In her 2018 report, the AG Chiri also noted that service delivery is compromised by Mutare city council as it was financing its operations with an overdraft facility, among a host of anomalies including unreconciled expenditure.
Another notable issue raised includes benefits for staff which are bypassing the payroll system, given as allowances to top management, an error which attracts fines from the Zimbabwe Revenue Authority (ZIMRA) and result in financial loss to council.
David Mutambirwa, programs coordinator for Mutare Residents and Ratepayers Association (MURRA) urged council to conduct its affairs above board and avoid recurrence of financial mismanagement in their affairs.
“There has to be transparency and accountability in the procurement processes to ensure that all relevant stakeholders are made aware of all procurement issues. Procurement has been taking place yet this has been shrouded in corruption,” he said.
