THE National Social Security Authority (Nssa) board chaired by Emmanuel Fundira is deeply divided over the revival of a controversial US$10 million ICT social security system tender involving local software company Twenty Third Century Systems (TTCS) (Pvt).
BRENNA MATENDERE
Information gathered by The NewsHawks shows the Nssa board is at odds over the tender which Fundira has directed to be restored with a further US$2 million paid to TTCS despite that the company was given US$10.4 million but failed to deliver.
High-level sources say Fundira has a pecuniary interest in the deal, which is why he is aggressively pushing for it. This has riled and mobilised board members to oppose the deal which has footprints of corruption.
Insiders say bringing back the TTCS system puts pensioners’ funds at further risk as the company might fail again to perform. This might result in Nssa paying US$20.8 million for the same system if the deal goes ahead.
Besides, if TTCS wins its court battle and claim against Nssa over the legal dispute arising between them, that might treble the amount of money lost in the process.
The situation has rattled the Nssa board, which includes Merjury Chinyemba, Tarusenga Chitemere, Shepherd Mundondo, Grace Mathe, Timothy Nherudzo, Chipo Ndudzo and Beatrice Ncube. Fundira is the chair.
Informed sources say Nssa board divisions are mainly along the lines of constituencies which directors represent and the brazenly corrupt nature of the deal at stake.
“The Nssa board is divided over the issue of the US$10.4 million tender which the chairman wants to revive with TTCS. To start with, it was not a board decision. It was the chairman’s action; which means his imposition. Most board members are saying this is immoral and corrupt. Why should Nssa give a contract to a company which was paid more than US$10 million, but failed to deliver?” a source said.
“The board comprises three representatives seconded by labour. The board members representing labour are Mathe, Chitemere and Mundondo. Business is represented by Ndudzo, Nherudzo and Ncube, while government representatives are Chinyemba and Fundira.
“What is happening now is that board members from labour are opposed to the deal. Business representatives are asking questions about it. This means the majority — six board members — are effectively opposed to the deal.
“Only two members seconded by government are supporting the revival of the dodgy contract, but then again it is unpopular and has no support. It’s only Fundira and Chinyemba supporting the deal. The contract will be dead on arrival, unless those behind it don’t care about corruption and being held accountable for it in the end.”
TTCS, which is based in Harare’s Newlands suburb, provides technology and software solutions.
It was linked to Germany multinational SAP, a market leader in enterprise software application, and South Africa’s EOH Holdings, a tech giant, until 2019.
Now they are at war with each other.
This resulted in Nssa taking legal action against TTCS and a counter lawsuit. Fundira wants the court cases to be hastily withdrawn and a new contract issued without responsibility and care for pensioners’ funds already sunk into the botched deal.
The abortive Nssa-TTCS tender was widely viewed and described as a grand heist.
Nssa paid over US$10 million for the dysfunctional system, but has nothing to show for it.
Documents show Fundira has used his power — through what is called “chairman’s action” — to pressure the board into reviving a deal in which the pension fund has already lost more than US$10 million.
He wants the contract restored at all costs and has been forcefully demanding that it be done urgently, suggesting a vested personal interest.
The issue has divided Nssa management and rattled government officials aware of the attempt to create further exposure for the US$1.2 billion pension fund through a contract which may fail again.
What is alarming, according to the documents, is that Fundira also wants Nssa to stop its court action against TTCS, while paying it more money.
Court papers show Nssa is arguing that the contract was invalid or alternatively there was a breach of the agreement signed on 31 October 2013, hence the invalidity. It wants US$10 million in damages for breach of contract plus interest at a rate of 5% per annum with effect from 31 December 2017.
For its part, TTCS is claiming US$7 369 326 against Nssa for maintenance fees and software licences.
The matter is at pre-trial conference stage.
Despite these two cases, which have been consolidated by the court due to similar cause of action by related parties, Fundira wants Nssa to revive the old deal and immediately pay TTCS about US$2 million extra to come back amid unresolved previous complaints of failure.
A ministry of Public Service official told The NewsHawks: “Basically, Fundira wants TTCS to be given a renewed contract even if they failed to deliver. Nssa paid above US$10 million, but must now pay again, with US$2 million immediately released to the same company which bungled the project. This is a brazenly corrupt deal.
“On 7 December 2023, the board met with TTCS representatives to discuss the SAP system that Nssa had acquired sometime in 2013 for a cost in excess of US$10 million. Nssa paid for the system in full. At the meeting, TTCS indicated they were ready to resuscitate the system at an estimated cost of US$1 880 000 and would require about 1 054 days to restore the system. The provision of annual maintenance would be 22% of the value of the software — which means about US$880 000.”
Further, Fundira wants Nssa to drop its legal action against his close associate Henry Chikova, a former director for benefits, schemes planning and research at the pension fund. Nssa was suing Chikova, who now works at the Public Service Commission, for deliberate misinformation, impropriety and gaslighting colleagues which led to the awarding of the tender to an undeserving supplier, TTCS, which had lost to another company, Integra, but later clawed back as it charged US$10.4 million as opposed to its competitor’s US$17.8 million.
Fundira wants charges against Chikova dropped so that he makes him Nssa general manager — the management boss — to implement his new US$10 million deal.
Nssa management has already been told to drop charges against Chikova in preparation for his return as the boss at the company where he left under a cloud of impropriety and corruption suspicions, costing the company millions.
The pension fund is due to recruit a new general manager next month to replace Arthur Manase who resigned last year facing over 30 charges of corruption. Applications closed on 31 March.
Nssa was constituted and established in terms of the Nssa Act of 1989, [Chapter 17]. It is a statutory corporate body tasked by government to provide social security.
The provision of social security can be defined as instituting public policy measures intended to protect an individual in life situations or conditions in which his/her livelihood and well-being may be threatened, such as those engendered by sickness, workplace injuries, unemployment, invalidity, old age, retirement and death.
It is based on the principle of social solidarity and pooling of resources and risks, involving drawing of savings from periods of employment, earnings and good health to provide for periods of unemployment, old age, invalidity and death.
At the moment, Nssa is administering two schemes: Pension and Other Benefits Scheme and Accident Prevention and Workers’ Compensation Scheme.
