PUBLIC Service, Labour and Social Welfare minister Paul Mavima and National Social Security Authority (Nssa) top executives are entangled in a murky ZW$400 million (US$4.8 million) National Building Society (NBS) tender for the construction of 500 housing units in Harare’s Dzivaresekwa suburb, The NewsHawks have established.
The involvement of Mavima – who oversees the statutory pension fund which manages over US$1 billion – and Nssa senior officials, including general manager Arthur Manase, casts a long shadow of corruption over the Dzivaresekwa Housing Project.
The tender has become a tug-of-war between the minister and Nssa on one side and NBS management on the other. So far the minister’s team is winning. The minister’s side has managed to weaken the opposing team by forcing out NBS board chair Stanley Kudenga and suspending the building society’s acting managing director John Mapiye.
However, this could explode on their faces with disastrous consequences.
Confidential documents obtained by The NewsHawks show that those caught up in the messy fight include the minister, Nssa, NBS, Procurement Regulatory Authority of Zimbabwe (Praz) and the Reserve Bank of Zimbabwe (RBZ).
Nssa owns NBS 100%, hence its involvement in the building society’s affairs. NBS is managing the tender process.
The RBZ is only involved as a banking sector regulator. Praz monitors the application of relevant laws, regulations, policies and procedures to ensure transparency and accountability in public procurement, although in this case its role is dubious.
Already, the brutal tender battle has claimed the scalp of Mapiye and Kudenga. Mapiye was on 21 May suspended for a month without any wrongdoing. Sources say the action is illegal.
In a letter dated 21 May, NBS new board chair Shingai Mutumbwa, who replaced Kudenga, vaguely says Mapiye – who was resisting interference by Nssa – should go home for a month to facilitate investigations into the procurement process, but claims he is not on suspension.
This is meant to cover their tracks on the illegal move, which they call “paid leave”.
“As you are aware the board is seized with investigations into the procurement processes connected with the Dzivaresekwa Housing Project,” Mutumbwa writes.
“In order to facilitate this process, it has been resolved that you go on 30 days paid leave with effect from 22 May 2021 to 22 June 2021. You are not on suspension and you may be called back to work at any time. You are therefore advised to be available at short notice.”
Mapiye was told to cooperate with the illegal investigation and not interfere with parties involved. This is being done in the middle of the tender process, hence unlawful. It also raises questions as to why the minister and Nssa bosses were snooping on the process and anxious to know who would win the tender.
The dirty fight has left in its trail a litany of illegalities, mutual suspicions, underlying currents of corruption and bitterness. Laws, regulations and ethics, as well as corporate governance tenets, have been broken with reckless abandon and impunity.
All the parties involved suspect each other of being motivated by corruption and self-interest.
However, Mavima and Nssa executives’ aggressive interference and retribution against those resisting their actions show the stakes are high. They want their pound of flesh.
Alternatively, the minister and Nssa bosses want the company that won the tender to remain in the deal and then bring in another participant as a smokescreen to justify involving their own preferred bidder.
The story so far
Documents obtained by The NewsHawks from Praz and other deep sources are revealing.
NBS’s procurement department flighted a tender in the government gazette and The Herald on 22 January. The tender was due to close on 23 February.
All prospective bidders were invited for a site visit on 5 February to assess the scope of work to be done. After the tender closed, bids were opened on 1 March and opening results were shared with bidders.
A preliminary evaluation was undertaken by NBS’s Procurement Management Unit (PMU) and compliance checks were conducted. NBS’s Tender Evaluation Committee (Tec) was invited to carry out a detailed evaluation on 12 March.
NBS’s Tec comprises: Namatirai Mutambasere (PMU), Tinashe Dani (PMU), Natasha Chikoti (PMU), Raymond Mudehwe (Housing Projects), Desire Mupande (housing projects), Belinda Mavela (housing projects), Hazvinei Bhaureni (legal), Sifiso Mahlangu (retail banking), Jonathan Muwanga (ICT) and Alfred Chaavure (finance). The meeting was chaired by Jonathan Muwanga (ICT).
Tec recommended site visits on previous projects done by bidders as part of due diligence. This was done between 16-17 March.
It then compiled technical (including site visits) and financial evaluation reports. Eventually it recommended that the contract be awarded to Reegul which had scored the highest mark with 83.44%. It also had the highest level of quality of units and capacity.
The other shortlisted bidders included Exodus and Company, Blainesworld and Nengo Builders. After the due diligence, technical and financial evaluations, Reegul won with the “lowest technically competitive bid” scoring 83.44%. Its financial offer was ZW$405 353 131.56.
Blainesworld came second with 82.85% at ZW$285 581 271.30, Nengo third with 80.02% at ZW$390 934 160.30 and Exodus fourth with 60.30% at 758 324 121.73.
The evaluation report said Reegul offered the best deal overall. This was then forwarded to Mapiye as NBS acting managing director, thus to the accounting officer in terms of the law. Mapiye agreed the report should be forwarded to Praz for further evaluation in terms of the Public Procurement and Disposal of Public Assets Act Ch 22:23.
This was done on 24 March.
Undue interference
After NBS submitted recommendations to Praz and, while awaiting its response, Mapiye received a phone call from David Makwara, Nssa director commercial services and former NBS board member, asking questions over the tender.
“Makwara claimed he was receiving complaints that the tender was not being handled properly. He did not reveal the nature of the complaints, neither did he disclose who the complainants were,” the document says.
“Mapiye responded, saying the tender was still under adjudication and no communication had been made to any bidder or anyone for that matter, therefore he wondered who was complaining and why, suggesting it was insiders with vested personal interests, not bidders or professionals.”
After that, events moved rapidly and the fight escalated, with meetings coming thick and fast in quick succession.
On 21 April, Praz wrote, objecting to site visits, saying those were not part of the Request For Proposals.
It demanded a re-evaluation without a site visits scoresheet. The letter was sent to NBS procurement manager Namatirai Mutambasere and Mapiye.
Surprisingly, barely two to three hours after the letter was dispatched, Mapiye received a WhatsApp message from Nssa chief investments officer Isaac Isaki with an attachment of the same letter.
This showed Praz was working in cahoots with Nssa and the minister whose name was later cited in meetings and other exchanges.
Isaki told Mapiye that Manase wanted an explanation as to why Praz had rejected the NBS recommendation on the winning bidder.
Two days later, on 23 April, Mapiye was summoned by Manase for a meeting at Nssa, with Isaki and Makwara. Nssa bosses claimed they were worried about the tender as there were “corruption allegations coming from higher offices”.
Mapiye asked who was complaining since the tender process was still on and, in any case, how they had known the winner before the conclusion. All the same, he said he was going by Praz recommendations. He also reminded them that what they were doing, even as the sole shareholder, was illegal in terms of the Public Procurement and Disposal of Public Assets Act, specifically Sec 53 (a-b) which refers to confidentiality around public tenders.
It later turned out by “higher offices”, Nssa bosses meant the minister.
On 26 April, Mapiye formally responded to Praz saying NBS was re-evaluating the tender.
Meanwhile, on 22 April, the RBZ wrote a letter to NBS board chairman Kudenga, before he was booted out, approving additional board members, namely Munhamu Ivan Murambiwa, Isaki and Itayi Walter Chirume.
“In that same letter, RBZ noted the resignation of Mr David Makwara from the board with effect from 2 April 2021. It also noted Mr Kudenga, the then chairman of the board, was not independent since Nssa holds 13% shareholding in Zimre Holdings where he is the CEO. This therefore meant that Mr Kudenga could no longer continue as NBS board chairman. “
Mr Kudenga subsequently resigned. This letter was also copied to Mr Arthur Manase, something unusual when RBZ writes letters to shareholders of banks,” documents say.
A litany of illegalities
After Kudenga was forced out, things more dramatic and got worse.
On 27 April, Nssa descended on NBS, demanding an immediate audit – another illegality. Legally, NBS only has internal and external auditors, not arbitrary and ambush auditors.
Nssa auditors had a letter from Manase. Mapiye responded to it, saying he was not willing to cooperate with an illegal process, even if it was demanded by the shareholder.
Manase reacted via email to Kudenga, before he was removed, saying: “The Honourable Minister (Mavima) received a number of complaints with respect to how this tender was handled and has mandated Nssa to carry out an in-depth enquiry into the same.”
Now the cat was out of the bag.
Mavima was the complainant and Nssa was carrying out his orders. They had their preferred bidder – Nengo Builders.
Kudenga responded, saying that the request for an audit should be directed to the NBS board audit committee and must comply with the board audit charter.
On the 29 April, Mapiye noted that two days earlier, on 27 April, the Nssa audit team had summoned NBS Tec staff, seized their computers, as well as their back-up data. They were also grilled over the tender.
However, Mapiye insisted he was bound by provisions of the Public Procurement and Disposal of Public Assets Act Chapter 22.23 and would not engage in illegal deals.
“As things deteriorated, Mapiye argued that Section 53 (a-b) of the Act stipulates that a running tender should remain confidential until completion. An audit of a running tender was in breach of Section 53 and will taint the integrity of the process,” documents say.
“He also noted that he was not against scrutiny, indicating an audit could be done when the tender had been finalised in line with the NBS audit charter. He also stated that he was empowered by Section 16 of the Act not to comply with orders to breach the law.”
As the stand-off and fallout exacerbated, NBS held a special audit committee meeting on 29 April attended by new board chair Tome, David Mutemachani (member), Chipendo, Alfred Chaavure (finance director), Victor Manyowa (Nssa representative ) and Andrew Nyakonda (Nssa internal audit).
The meeting resolved to give in to Manase’s demand of an audit of NBS while the tendering process was still running – which is unlawful. This was calculated to stop the process and impose the minister and Nssa’s preferred bidder.
“The resolution of the board audit committee was shocking. The board resolved to allow the Nssa team to audit a running tender in contravention of the Public Procurement and Disposal of Public Assets Act as well as the board audit charter. They authorised a bush and ambush audit (arbitrary Nssa audit) to have access to all information they required for their personal interests and to interrogate NBS staff, further violating provisions of law (even though they did acknowledge in the same letter that they were indeed violating the Act and thus the law.) They also resolved that an audit by Nssa was just as good as an internal audit for NBS – another shocking resolution and irregularity. NBS is owned by Nssa, but they have separate corporate structures and management.”
The battles intensifies
While Nssa proceeded with the illegal audit, NBS continued with the tender re-evaluation as per the Praz recommendation. NBS re-submitted the evaluation report to Praz on 4 May.
Prior to that on 3 May 2021, Clara Sibindi (senior Nssa auditor) had written an email to NBS demanding minutes of the tender re-evaluation process. This was another clear breach of Section 53 of the Act.
Ten days later, on 13 May 2021, Mapiye was called to a meeting by Mutumbwa, NBS chair.
Besides Mutumbwa and Mapiye, the meeting was also attended by Tome and Chipendo. In the meeting, Mapiye was instructed to cancel the tender and recommend to Praz that it should be awarded to the top three bidders – Reegul (which came top), Nengo Builders (the minister and Nssa’s preferred bidder) and Blainesworld (the cheapest bidder after the re-evaluation).
At that stage, it became apparent that Nengo was supposed to be accommodated at all costs.
This was even more irregular as Mapiye was still waiting for a response from Praz on the re-evaluated tender process. Mapiye asked about the legality of such a move. He was, however, told that this was a board instruction to protect the shareholder’s interests. He was also told to work with Nssa and NBS to urgently draft and send a letter to Praz telling them about the need to award the tender to three companies, which was also unlawful.
After consultations with colleagues, Mapiye was told that Mutumbwa and Tome’s instruction was illegal.
He went back to Mutumbwa and advised him in the presence of both Nssa and NBS officials that cancelling the tender and awarding it to the top three bidders was unlawful. But Mutumbwa insisted that Mapiye should cancel it and seek a closed bid within a short period of time.
The audit was completed and submitted to Nssa bosses and the NBS board, but the building society’s management was not asked for comments and did not see the report.
On 19 May, the NBS board audit committee met to consider the audit report, but management was not invited.
The following day, on 20 May, the NBS board and its human resources committee sat over the same matter. Again management was excluded.
On 21 May, Mapiye was suspended for 30 days – until 22 June – to allow the minister and his Nssa proxies to seize control of the process and give the tender to their preferred bidder.
Denouement
The witch-hunt, removal of Kudenga and Mapiye, riding roughshod over the process and trampling on the law – brazen and aggressive interference – was meant to trigger a crisis and cancel the tender. And then, under new circumstances, the tender would then be awarded to the minister and Nssa executives’ preferred bidder – Nengo Builders.
