MPs probe US$9 000 a laptop scandal
ON Monday, Parliament’s Public Accounts Committee, chaired by Willias Madzimure, received evidence from Blinart (Private) Limited, the company that won a tender to supply 173 laptops to the legislature at over US$9 000 each.
Elizabeth Muchenje, the managing director, appeared on behalf of the company and justified the prices. She however clashed with legislators who felt she was dodging questions. Below is an excerpt of the session.
In the committee meeting, members of Parliament, Temba Mliswa, Dexter Nduna, Chalton Hwende, Nyasha Masoka and Marko Raidza contributed to the discussion:
Madzimure: Welcome, Miss Muchenje, we would like you to tell us about the laptops tender, mari yamanga makataura kuti izosvikawo ipapo yainge yakatarisawo zvipi mozotiudzawo masuppliers aikusupplier kwaibva zvinhu zvacho. How did you arrive at the pricing and may you tell us who your suppliers were?
Muchenje: Thank you, sir. Parliament flighted a tender, we responded from The Sunday Mail; actually we sent an email requesting the bid document, and then we tendered. When we put up the bid after a few months we received an award letter to say that we had won the tender, I have the letter with me right here. The laptops were going for nine thousand . . . Madzimure: So, you are free to leave the letter as you go through the letter, munogona kutisiirawo tsamba yacho handiti (you can leave the letter, right?)
Muchenje: Okay ndokusiirai (I will leave it), so the unit price for the laptop was US$9 264. Mliswa: Sorry chair, may she just pass around the letter. Muchenje: The award letter? Mliswa: Yes. Muchenje: So, the laptops were US$9 264.49 each payable in RTGS at the prevailing rate on the date of payment.
Madzimure: But this 9 000 was US dollar.
Muchenje: Yes, and I have a document here from the internet, we printed everything and we put the cost build-up, so I can pass it round also. Muchenje: It was a high-end laptop and with seven other accessories with it. Hwende: Seven accessories?
Muchenje: It was HP Spectra 32 GB, there was a laptop stand, laptop back-up, laptop pouch type C-to-HDMI adapter, four-port USB adapter, wireless mouse HP, MS professional office 2019 and antivirus. Thank you sir. The cost amounted to US$5 176.36, that was the cost for everything here, then when I put the Zimra 14.5% and the courier charges, hotel and tickets it came to US$6 026.12 then mark-up 35%, we came to US$2 191 for mark-up, then VAT . . .
Hwende: Two thousand and what? Muchenje: US$2 191.99. mark-up per laptop. Hwende: Heyyy!
Muchenje: Then the grand total was US$9 314.87, you can actually have a look at the document, the costing. Everything is there, thank you sir.
Madzimure: OK honourable members as we peruse the document, you can raise any question to Miss Muchenje.
Nduna: Yes, can I.
Nduna: Thank you honourable chair. Sorry I am unable to connect, but I just want you to clarify according to you the forward pricing that you put up, was it according to the rates that you anticipated would fit, say, the US dollar RTGS the time you get paid one? Secondly the issue of hotel, was it per each computer or were you disintegrating in the form? Were you going to collect per each computer outside the country? Etiquette pay each computer or you group them to come up with this US$2000 that you’re talking about?
Muchenje: Thank you sir. Actually, that rate that we used was the prevailing rate, the rate that we used towards the average rate is that time when we quoted it, that’s the one that we used and then for the hotel, air tickets, and everything we grouped it in three so we were going to supply these three times, like in three batches.
Nduna: Any reason why?
Muchenje: Because of the quantity. Nduna: Why? Muchenje: That’s how we operate. That’s how we agreed.
Nduna: So, you were going to go with the e-ticket and go to the hotel three times so this is how you came up with $2 000?
Muchenje: No, OK maybe can you give me back my paper? Hwende: You mean this one?
Muchenje: Yeah, can you circulate it and bring, I want to use it? Mliswa: OK, well that paper is coming, you spoke about the prevailing rate. If you talk about the prevailing rate, you’re talking about the black market? Muchenje: No, it’s the official rate.
Mliswa: So you were supposed to say official rate not what you said, prevailing rate. Muchenje: No, it’s the official prevailing rate. Mliswa: No, I am trying to help you.
Muchenje: Oh, thank you.
Mliswa: You were supposed to say prevailing official rates.
Muchenje: Actually, it’s in writing sir, it’s in black-and-white, see ‘official prevailing market rate’. Sorry about that sir.
Madzimure: Sorry honourable members, can you come through the chair? Nduna: Chair, now that she has gotten the documentation, I just wanted to reiterate my question.
Madzimure: Honourable Hwende, let’s concentrate so that we do not miss something important.
Nduna: I am just repeating my question, honourable chair. May you please confirm that you went on the plane three times, went and stayed in the hotel three times in order to bring in the whole, the whole amount of the number of laptops that you were asked to supply?
Muchenje: I did sir, sorry point of correction. Nduna: Just wait for terms. Muchenje: We didn’t go, I said it was supposed to be three times.
Nduna: OK, so yes you put in the price sheet based on going out of the country three times staying in the hotel three times and then also paying for incidentals and otherwise to come up with a figure of $2 000. Muchenje: No, sir, you missed it. $2 000. Nduna: Yes, I will.
Muchenje: It’s $39. Nduna: You are free to answer.
Muchenje: OK $39 that’s the cost, $39 on each.
Nduna: We want the breakdown of how you came up with this figure. Muchenje: It’s there, sir. I gave you this (paper). Hwende: I will (check the paper), but you said you have the document then you take it. We expect you to also know the figure from your head.
Muchenje: OK sir, no problem. Let me take a photo of it.
Nduna: Take your time just get the question, internalise and then answer. Muchenje: Ok sir. Nduna: Yes, we are not chasing you.
Madzimure: Mai Muchenje. Muchenje: Yes. Madzimure: This committee of Parliament is different from any other meeting that you may have attended. The responsibility that we have is huge. There is a lot of expectations of people like yourselves out there, who may want to understand why some of the things did happen. Therefore, the line of questioning might not be to your expectation, but I beg you to indulge in trying to answer the questions. We are not rushing you, take your time, answer the questions.
Muchenje: Thank you sir.
Nduna: So, I want to know the three times that you were going to go out, you were going to pay your ticket, accommodation and incidentals and this is what came up to US$2 000 profit over and above the US$5 000 that you spoke about. This is where your profit is derived from and you go on further to say it was US$39 per computer. This is what you would’ve had as expenses on the supply, the importation and the supply, the air tickets, the food, the hotel $39 per computer. In your adjudications after you have said exactly the amount, do you think it is fair both to yourself and to government to go and spend three blocks? It’s how many computers per each block?
Muchenje: Can I answer you? I think you missed the point. I need to answer. Nduna: I want to know how many computers you were asked to supply.
Nduna: So, three blocks would mean about 60, so it’s $39 for each computer.
Muchenje: But you missed something $39 is for hotel and ticket per computer. It’s per computer.
Nduna: 60×39, and which hotel in my view would charge you about 600 or US$1 000.
Muchenje: I think you’re missing something sir. Can you please have a look at my costing. Hwende: Explain. Can you explain?
Muchenje: No, I want him, sir, honourable to check my costing first before you answer before you ask because you’re missing everything.
Nduna: Just answer what I have asked.
Muchenje: No, no because that’s not true. What you’re saying is not true sir. Hwende: Yeah, but make us understand.
Muchenje: What do you want to understand? Can you just take the?
Madzimure: Honourable Nduna can you pose the question you want her to answer.
Muchenje: What do you want to understand? Can you give me the question, ask me, to make you understand. Hwende: No, honourable chair, I think the conduct of your witness I do not think we expect this. This is Parliament.
Muchenje: Can you ask me whatever you want to know? Hwende: No, you don’t ask questions, we called you here you must answer our questions.
Madzimure: Order, honourable Hwende. Hwende: No, no, chair but your witness is out of order you know, this is an honourable Parliament. You can’t address as like you’re in a shebeen we are asking questions.
Muchenje: Sir, I do not take that insult sir. Hwende: No no no.
Muchenje: That’s so wrong. Madzimure: Sorry, honourable Hwende, can you allow her a chance to respond? Honourable Hwende.
Muchenje: I’m sorry sir.
Madzimure: Mai Nyakudya, sorry Mai Muchenje, I want you to . . . That’s why I have said take your time. Mrs Muchenje I have said to you the responsibility that we have is big and when I say it’s big, it’s big kumunhu wese (to everyone) to the extent that we expect any witness, who comes and appears before this committee, will not challenge this committee, because the consequences of challenging this committee is beyond what you may think.
We have had very big people coming to sit in that chair as witnesses and they have thought that this committee will, I don’t know what sometimes people think. Let me be blunt, vanofunga kuti vakatsika somewhere (they think they are untouchable). With this committee there is nothing like that because patakatsika takasiyana siyana (we all have back-up), but, that is not the issue here.
The issue before you here is to explain to this committee ‘how did you manage to build up your cost to what you said it is? If you say it cost me accommodation $39 a laptop, we will then ask is that reasonable? Can that happen? Where did it happen?
Because it’s not only you whom we are dealing with. You saw another team that got out, there is another team and another team, there are a lot of people who are affected by this thing. It’s not a very small thing, I just want you to take your time, explain. You don’t need to go toe-to-toe with a member. Simply calm down, explain what you want to explain and that is it.
Masoka: Chairman through you, let me help you, Ms Muchenje, what the honourable member is asking: On your costing, you said per laptop, I think you broke it down, you absorbed it, to $39.19 so that means per laptop, right? So, what we are simply doing here is we are saying $39.19 by 174 laptops it comes to $6 819, that is your hotel cost and he asked how many batches were you going to bring in, you said three, so we divide that by three.
It means every visit or every hotel stay that you are going to go and bring 60 laptops or so you were going to be charged $2 263.02. We are saying is that feasible?
Muchenje: Yes, it’s feasible. Do you know how much it is, the air ticket? Nduna: That’s fine. Masoka: That is fine.
Hwende: Haangatiudze zvema air ticket panapa (She cannot tell us about air tickets here).
Raidza: On a point of order, chair. My point of order is for us not to deliberate. I think we just need to get whatever that she is saying then we make a finding as a committee.. Hwende: No, no, no, she must answer.
Raidza: Whether what she is saying, she is lying, whether what she is saying is correct, then we make a finding as a committee to say she was telling us the truth or she was lying. So that at least we can progress because I do not think she is here to tell us what we want to hear, she is here to give us evidence and whatever she is here to tell us we have to make a finding as a committee whether she was lying to us or telling us the truth.
All the numbers were unjustified. I think that is why we are saying she must give us a breakdown, then after she gives us a breakdown we interrogate, then after that we make a finding, that’s my submission.
Mliswa: Chairman, if I could just. . .
Madzimure: Honourable member, you heard what honourable Raidza said. According to our standing rules, we are there to get the information and we will then sit and deliberate on the information, so let’s concentrate on questions and we get the answers.
Yes, honourable Masoka has broken it down, he has divided by three trips and accommodation is coming to two thousand and something [US dollars]. It is up to us to say, yes accommodation and ticket, it is now up to us to say to those who are accepted the bid, was this reasonable or not?
Mliswa: I think what is critical for me is not saying whether she stays in a star hotel or not. It’s neither here nor there, but because it’s taxpayers’ money can you show us the receipt, honourable chair and of the air tickets.
Muchenje: Yes, sir. Hwende: And how much was it?
Mliswa: The reason we are doing that is that it is taxpayers’ money. Secondly you spoke about official prevailing rate and you access money from the auction, would you provide us with information, especially so you bought these computers?
Muchenje: Sorry, point of correction. I didn’t buy, I didn’t buy them.
Mliswa: No I am asking you questions and the questions that I am asking are critical.
Mliswa: . . . in us looking for value for money, you have asked for this money in RTGS, were you already paid?
Mliswa: No. I need to get somewhere, so you spoke about accessing money from the forex auction, so how then could you access money from the auction before being paid?
Muchenje: I think sir, you didn’t get me right. This was cancelled so there is nothing that happened here, no transaction happened. We actually apply for money when there is need, right?
Mliswa: The question that I am asking is how often have you dealt with this Parliament in terms of supplying?
Muchenje: This was the first time sir, nothing, no transaction. Mliswa: So which other organisation have you supplied?
Muchenje: Parastatals and government departments, private NGOs, everything. I am a businessperson. From January to September we did 94 tenders, out of the 94 tenders we managed to get four. Sir, we do business I am in business. I am very serious.
Nduna: Which companies are those? Muchenje: I can provide the companies if you want, there is a breakdown. Nduna: Only for the four.
Muchenje: For the four? Okay.
Mliswa: What we are worried with is that from 94 you got three and so forth or four were wanted and you used the official exchange rate, so do you get paid or you go to the auction and apply for money because you have money already and then when this payment comes, it does cover? How do you mitigate inflation for the auction rate and so forth, how do you stay afloat as a business?
Muchenje: I didn’t get that one.
Mliswa: What I am trying to say to you, of the four companies that you were awarded tenders you already supplied? Muchenje: Yes.
Mliswa: So, were you paid in advance or after supply? Muchenje: After supply.
Mliswa: So, you got the foreign currency from the auction?
Muchenje: Yes? Mliswa: for the four companies that you supplied?
Muchenje: No, I will have to confirm that, I will check, but, we get money from the Reserve Bank. That’s very true, we get money from the Reserve Bank.
Mliswa: What I want to establish is that you get money from the Reserve Bank.
Muchenje: I didn’t bring that information about the others. Hwende: But this kind of behaviour . . . she must answer. Mliswa: What I am trying to say to you, I want you to be calm. Muchenje: I am very calm, it’s just that I am loud, naturally I am loud.
Madzimure: Honourable Mliswa you speak through the chair, one, two, let’s just put our questions straight.
Mliswa: Chair I am putting the question and she is not understanding, so I am being forced to break down slowly. The issue that I am getting to is simple, the viability of business. If you are not getting money from auction, in US dollars so how then do you remain viable?
That’s the question I am asking, and two, proof of moneys she has gotten from the auction to buy computers. We need the invoice which was put at the Reserve Bank. We need to look at the supplier. This is where I am getting to at the end of the day. In terms of how then . . . I don’t know do you understand where I am coming from? Okay zvandiri kuedza kutaura ndeizvi, handizvo here, honourable members?
Let me ask, makahwinha matender four, mahwinha matender mukabvuma kuti munowana mari kubva kuauction, handizvo here? (What I am saying, is you won four tenders and after winning the tenders, did you get forex from the auction?)
Madzimure: Honourable Hwende Hwende: You said your profit per laptop was going to be $2 109, am I correct?
Muchenje: Uhm I have to (check), it was 35% so if it’s coming up to $2 000 then . . . Hwende: But, this is a figure that you have mentioned before.
Muchenje: It’s 35% mark-up sir, because I do not have the paper with me . Hwende: But, you have . .
Muchenje: But you have the paper.
Hwende: Where is the paper? Raidza: Here. Hwende: So what is the point of asking her, if she is going to refer everything to us?
Muchenje: It’s 35%. Hwende: It’s coming to 35% the $2 109, the reasonable profit for a laptop in US dollars.
Muchenje: I’m lost now, this is US dollars payable in RTGS.
Hwende: I did a search on Google for the specifications that you mentioned. The last time that we had a meeting here, it was coming to US$1 300 and I have just confirmed, the same laptop in South Africa is $1 300, but yours was already $5 000.
Initially I thought most of the money was on the accessories, but you can see even the accessories themselves. It’s just $1 600, that question you do not need to answer. Then also the reason why you had to split the procurement, was it because you did not have the enough capital to procure once because procuring once was going to save a lot of money on the taxpayers.
What was the reason for splitting the order in three and do you really have to go back every time as if you are going to bring them in your handbag to come here or it’s enough to just go at the first meeting and you check and confirm your supplier and you agree the price, then the supplier will deliver in batches?
He can still send while you are here. Hwende: Where did you get the laptops?
Muchenje: In Dubai sir. Hwende: What is the name of the (supplier)?
Muchenje: We hadn’t finalised which company to use. Hwende: No, the one that you sought a quotation from, which you then used.
Muchenje: We used the internet sir, when we quoted, we were using the internet. Hwende: Yes, but, when you are searching . . .
Muchenje: Because it gives us plus or minus, average. Hwende: Yeah, I just want one name of a company that you used.
Muchenje: That I used here? Hwende: That you used to get the average price in Dubai, because when you are searching for a price you are also worried about the suppliers, so you search like, for instance now, I have just searched in South Africa, I know I am doing a random search, but the name of the company is there, Frist Shop. A computer, latest one, with more specs than yours, 4 000 rands. So, that is what I am asking, just one.
Muchenje: On this one, I have to go back to the (office) because I do not do the tender, but I can supply you as soon as I can. Hwende: But do you normally buy there, from the supplier in Dubai?
Muchenje: Yes sir.
Hwende: So you know them?
Muchenje: Because of the issue of availability, we could not just pinpoint one client because of availability so let me check how they did it and come back to you on that one, but we actually have suppliers. We have about five suppliers outside so I will still come back to you.
Madzimure: So are you going to give us the names of the suppliers?
Madzimure: When can we expect them?
Muchenje: Today, I can give you today.
Nduna: Honourable chair, you have made the job very easy for me. You have already supplied three entities already, government institutions, you have?
Nduna: How quickly can we have the information for the supply of those four entities? Muchenje: But, it’s not laptops sir. I think it’s not about laptops.
Nduna: Say that again. Madzimure: She said it’s not laptops. Whatever business you have done.
Muchenje: Yes, I will give you. Nduna: When can we have this information? Muchenje: Later today.
Nduna: Later today? Take your time.
Nduna: I need to find out the issues of the importation, so that we find the duty that has been paid, if there is duty, surtax duty. So that we get to the end part, after going to the companies, the mark-up and such like in particular where government payments are concerned.
Madzimure: Thank you very much.
Muchenje: Let’s say tomorrow, because, this is 1(pm).
Nduna: Is it not too early?
Muchenje: I don’t know sir, it’s up to you sir. I think let’s just do it and finish, yeah tomorrow is okay.
Madzimure: Okay, just one minute.
Masoka: I want to supplement that, coupled with the auction rate bids or applications or whatever.
Madzimure: Honourable Bushu.
Bushu: I just wanted to find out, when you were advised about the cancellation of your order?
Muchenje: The date? Bushu: You remember the date?
Muchenje: Yes sir.
Bushu: When was that?
Madzimure: If we can have that letter yecancellation, because we already have that one ye award.
Muchenje: It was on 22 September.
Bushu: 22 September? Okay, that’s all I wanted to know.
Madzimure: Thank you very much.
Raidza: The last one before she leaves, (George) Guvamatanga said you had to be blacklisted.
Muchenje: I don’t know about that. Raidza: You don’t know about that?
Muchenje: Remember I said sir, I can’t talk about hearsay, I am waiting for the official (communication), and chair may I ask, is it possible for me to see the list of bidders who were above us. I just want to know how much they charged and see how they arrived at their cost.