A Chinese multi-national, China Harbour Engineering Company (CHEC), has just signed a contract worth close to US$5 million to fix Zimbabwe’s troubled aviation air communication systems despite a flawed tender process and the supplier’s history of blacklists and bribery reports.
The Zimbabwean government, through the Office of the President and Cabinet (OPC) and following a Foreign Affairs ministry recommendation, imposed the tender on the Civil Aviation Authority of Zimbabwe (CAAZ) through a restricted bid that limited suitors to Chinese and Russian companies, it has been established.
The Foreign Affairs portfolio did not dismiss the allegation that it was involved in making recommendations for restricted bidding, but insisted that CAAZ must provide answers on the CHEC tender and contract.
A deputy director in the ministry, Livit Mugejo, said: “We are not involved in the tender processes. Each ministry has its own procurement management unit. CAAZ and the transport ministry are responsible for the tender. Even if we recommend any foreign bidder, the tendering process is still deferred to individual ministries.”
The restricted bid was meant to circumvent bidders from European suppliers which President Emmerson’s administration believes are hostile and also as a way to bust international economic restrictions imposed on the country by the bloc and the United States of America.
New Zimbabwe established in an investigation carried out in collaboration with Information for Development Trust (IDT)—a non-profit organisation supporting the media to probe corruption and bad governance—that CHEC got the contract even though reservations had been made on the tendering process as way back as late 2020.
In late March this year, the permanent secretary in the Transport and Infrastructure Development ministry, Thedius Chinyanga, was quoted by the local media confirming the awarding of the aviation communication tender to CHEC, adding that the concerned parties were finalising the contract.
The tender process was above board, the media quoted Chinyanga as recently saying.
Investigations have discovered, though, that, contrary to Chinyanga’s claims, the Civil Aviation Authority of Zimbabwe’s (CAAZ’s) accounting officer at that time—Margaret Mantiziba—flouted the law.
This revelation is contained in correspondence to Bertha Muzangaza, then CAAZ acting director general.
The letter is date-stamped 10 December 2020 and signed by Clever Ruswa, the acting chief executive officer at the Procurement Regulatory Authority of Zimbabwe (PRAZ).
Muzangaza is the aviation authority’s substantive corporate secretary and took over the acting director general’s post from Margaret Mantiziba, who held the position briefly after the expulsion of David Chawota in 2019 for alleged criminal abuse of office for which he has a pending case in court.
Tender initiation occurred during Mantiziba’s time while Muzangaza presided over the award to CHEC, investigations revealed.
Blessing Ngwarai, the director of Air Navigation and Technical Services, supervised contract negotiation which culminated in CHEC getting the job.
The contract, however, is being kept a closely guarded secret, with only the OPC, Transport minister and CHEC having been given signed copies, procurement authority sources revealed.
The negotiation stalled at one time, New Zimbabwe learnt, because CHEC was insisting to get its payment once it had delivered the specified communication products required to revamp the aviation system, while CAAZ argued that the Chinese company must install the equipment to ensure it worked, and this carried the day.
The contract entails that CHEC will supply and install air traffic control communication systems (US$4,810,177) and spares (US$87, 163), bringing the total to just under US$4.9 million.
China and Russia only
The letter, on reference number PRAZ/C/69, indicates that the Special Procurement Oversight Committee (SPOC), at a virtual meeting held on 3 December 2020, discussed the tender titled ZAAC/DANTS/International/01/2020 for the supply and installation of air traffic control communication systems for which CHEC recently signed the contract.
The SPOC members, according to the PRAZ letter, noted in the meeting that the restricted bid was advertised to the Russian and Chinese embassies in Harare “in order to avoid payment challenges due to sanctions” and also because China’s Exim Bank was financing the upgrading of the radar surveillance system at the Robert Gabriel Mugabe International Airport.
While the Transport ministry’s Chinyanga passed the tender process as clean, PRAZ noted otherwise and pointed out that the law had been broken when CAAZ invited bidders to express interest and advertised the tender without the knowledge of the SPOC, a committee which scrutinises procurement contracts for adherence to set regulations.
“The accounting officer (Mantiziba) concluded the expression of interest tender and shortlisted all the 3 (three) participating bidders without submitting to SPOC in violation of Section 54 of the Public Procurement and Disposal of Public Assets (PPDPA) Act Chapter 22:23 as read with Section 36 of the PPDPA (general) Regulations (sic),” reads the letter from the PRAZ boss.
Despite this violation, the SPOC, through a resolution number 0529 made on the day of the meeting, did not make any objections and resolved to award CHEC the tender for the supply and installation of air traffic control and communication systems.
Mantiziba has since left CAAZ after her five-year contract as substantive human resources director expired and the aviation authority did not renew it.
The CAAZ corporate secretary, Muzangaza, verbally promised to respond to questions sent to her via Whatsapp last Friday.
The message blue-ticked, showing that she read it but, after taking long to respond, a reminder was also sent to her four days later and she was not picking up calls.
Similar attempts to get comment from Ngwarai in his dual capacity as the current acting director general and substantive director in charge of aviation and technical services who negotiated the contract with CHEC drew blanks as he also ignored messages sent to him.
Documents at hand indicate that the expression of interest process ended on 31 July 2020 and the restricted bidding was done “as directed by the Zimbabwean government”.
Three bids were received from CHEC, Joint Venture of Beijing CSSCA Technology working with Nainjing Les Information Technology as well as JSC Azimut.
The tender closed on 27 October 2020 and CHEC emerged as the sole bidder since the other two lost the energy along the way and never returned, according to a source in the SPOC.
It was not immediately clear why the two other bidders did not complete the process despite being availed with bidding documents on 1 September 2020.
While SPOC recommended due diligence on pricing during tendering, it seems just about everyone ignored—conveniently or unknowingly—to check CHEC’s background, which, searches on open sources revealed, is littered with allegations of corruption and non-delivery.
The Beijing-based China Harbour says about itself that it focuses on basic infrastructure construction such as marine engineering, roads and bridges, airports and reclamation and prides itself for operating a US$10 billion business from 70 overseas branches and clients in 80 countries.
It is part of the China Communications Construction Company Ltd (CCCC) in which the Chinese government has a controlling stake.
Blacklists and bribery
In 2014, Ugandan president Yoweri Museveni, under mysterious circumstances, booted out China Civil Engineering Construction Corporation (CCECC) from the US2 billion Standard Gauge rail project and replaced it with CHEC.
Numerous legislators protested against the decision and complained that CHEC kept raising the price of the project, from an initial 6.7 billion Ugandan shillings to 11.4 billion.
There were also allegations that CHEC had paid a whopping US$200 million to officials in government, while it was on record that the CHEC executives made private visits to Museveni at his farm.
In 2018, CHEC came under the spotlight when it was accused of offering a bribe to the son of the Bangladesh prime minister, a top government official, so as to secure a highway construction tender, amid public reports of price inflation.
The son was sentenced to six years in prison for accepting the bribe.
Bangladesh proceeded to blacklist CHEC for the alleged bribery and banned the Chinese company from operating in that country in the middle of negotiations to expand the highway from Dhaka, the capital, to Sylhet in the northeast.
China Harbour’s parent company, CCCC and all its subsidiaries were blacklisted by the World Bank from 2011 to 2017 for all contracts related to road and bridge construction over what the multinational financier described as “fraudulent practices”.
In 2012, CHEC was among several companies that came under attack from the Jamaican government following a forensic audit report that “unearthed wanton disregard for the conventions and procedures established by the government of Jamaica for project implementation, administration and management”.
The report added that the flawed work had “drained precious budgetary resources and undermined the very foundation of public institutional integrity”.
A major port facility project that CHEC had been awarded by the Cayman Islands premier was stopped when the British government raised concerns over skewed procurement. The premier had fast-tracked the contract, raising suspicion of corruption.
Paper trail shared by procurement regulatory authority sources shows that attempts to get a company to fix the air traffic control communication system has repeatedly hit snags since 2014.
A document titled “Facts on the Tender for the Supply and Installation of Air Traffic Control (ATC) Communication Systems” indicates that several bids have been cancelled amid government interference and poor resources.
Trail of failures
In 2013, CAAZ floated a tender (CAAZ/DANTS/3/13), which closed on 25 March 2014, attracting bids from Indira Systemas, Narsco Holdings, CETC International Company, Avic International Holding Corporation, AME Air Traffic Management P/L and Sinogy International.
After adjudication and evaluation, AME, a South Africa-based outfit, won the tender at a cost of US$4.3 million on 22 May 2014 but CAAZ failed to implement the tender resolution (number PBR 0637) made by PRAZ’s predecessor, the Special Procurement Board (SPB) “due to funding constraints”.
CAAZ approached NMB Bank for a US$3 million loan but the financial institution encountered problems in raising the required foreign currency to bankroll the project, forcing CAAZ to trek to FBC Bank.
The civil aviation authority managed to get a US$3 million loan from FBC Bank in 2018 and proceeded to sign a contract with AME, which was asked to provide state of the art equipment not mentioned in the original bidding process.
The supplier promised to revert with required information, but did not come back, according to the document.
Despite engaging AME, a separate process dictated by the Office of the President and Cabinet had already started, in November 2017, to expand the bid to include radar surveillance, air navigational aids systems, and other ancillary services, in addition to air traffic communication systems.
“On 2 November 2017, the then State Procurement Board, acting on the directive of the Office of the President and Cabinet, issued a direct award of the tender (including the additional services) to Indra Systems”, a Spanish company, according to the document.
The government-imposed tender shot steeply to Euro 27.9 million, despite struggles to raise less thanUS$5 million in the AME tender case.
CAAZ was forced to sign a contract with Indira for the expanded air management systems on 20 December 2017.
This meant that the authority was put in a quandary regarding AME, and, on 30 April 2018, wrote to PRAZ requesting approval to cancel the contract with the South African supplier and replace it with the imposed Indira.
The procurement authority, through a letter dated 4 May 2018, advised CAAZ to cancel the AME contract. This was on the basis that AME had failed to deliver.
But Indira did not deliver either, resulting in a new tender for air communications being floated and CHEC winning it as a sole bidder.