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Parliamentary Roundup Bulletin No. 22 - 2012
Southern African Parliamentary Support Trust
June 01, 2012

Introduction

The Minister of Industry and Commerce, Professor Welshman Ncube appeared before the Portfolio Committee on Industry and Commerce on Monday 28 May 2012 to clarify to the Committee the technical hitches holding back the implementation of the ESSAR deal, despite its signing a couple of months back. The Budget Finance and Investment Promotion Committee conducted public hearings in Bulawayo and Harare on the State Procurement Board’s service delivery. The meeting between the Thematic Committee on Human Rights and the Joint Monitoring and Implementation Committee (JOMIC), which was scheduled for Thursday 31 May 2012, was deferred to a later date.

Portfolio Committee on Industry and Commerce

The Committee received oral evidence from the Industry and Commerce Professor Welshman Ncube on the progress made towards the implementation of the ESSAR deal. The Mines and Mining Development Hon. Obert Mpofu was also scheduled to testify before the Committee, but he did not turn up for the meeting as he was said to be committed elsewhere.

Professor Welshman Ncube detailed the background to the deal and indicated that the deal had certain precedent conditions that were supposed to be fulfilled before it could be implemented. These included agreements between ESSAR and the line ministries such as Finance, Mines, Transport Energy and Water Resources among others. The Minister informed the Committee that all the other ministries involved in the deal had signed the agreements with ESSAR except the Ministry of Mines and Mining Development which was still to sign an agreement to transfer iron ore mining claims, namely Buchwa Mine, Ripple Creek, and Mwanezi to ESSAR. Thus the Minister of Industry and Commerce said this was the only snag holding back the implementation of the deal. The Minister informed the Committee that of the three groups of claims that were the subject of the deal, Buchwa Mine and Ripple Creek were not in dispute. However, part of the Mwanezi claim was in dispute as the ownership of the claim was being contested in the Supreme Court by Mr. Rodrick Mumbire, a former BIMCO employee who once managed ZISCO and BIMCO’s claims.

Because of the unresolved impasse between the Ministry of Industry and Commerce and the Mines Ministry ESSAR decided to stop making the voluntary salary payments it had been making to former ZISCO Steel employees.

The Industry Minister informed the Committee that the impasse over the Mwanezi claim was debated in the last Cabinet meeting and Cabinet resolved that the undisputed Mwanezi claim should be transferred to ESSAR while the disputed claims would be held in abeyance until the Supreme Court decides on them.

The Minister also testified that in his opinion, Rodrick Mumbire’s actions were criminal under the Prevention of Corruption Act, but the Ministry and ESSAR would wait for and respect the Supreme Court’s pending decision on the matter. In addition, the Minister dismissed reports that ESSAR intended to lay a slurry line or build a railway line to Beira for purposes of exporting iron ore. The Minister indicated that neither of those things were part of the deal and the government was looking at value addition in Zimbabwe. Should ESSAR intend to export iron and/or steel, ESSAR would have to seek the necessary permission from government.

Portfolio Committee on Budget Finance and Investment Promotion

The Portfolio Committee on Budget, Finance and Investment Promotion held public hearings in Bulawayo and Harare on the operations of the State Procurement Board (SPB). The Committee was prompted to conduct the public hearings on this issue mainly in response to public out-cry over poor service delivery by the SPB. The Chairperson of the Budget Committee, Hon. Paddy Zhanda, is also on record criticizing the State Procurement Board for unnecessarily awarding tenders to foreign companies who bring the bulk of employees and raw materials from their home countries, thereby worsening the country’s Balance of Payment (BOP) position, as foreign currency is repatriated to the companies’ country of origin.

The main purpose of the public hearings by the Committee was, therefore, to afford the general public and local suppliers the opportunity to express their views on how the state procurement system and procedures could be democratized and made transparent so as to benefit the local industry by creating jobs and increasing capacity utilization.

Prospective bidders alleged lack of transparency in the State Procurement Board (SPB), saying it was bringing companies from Harare to take up tenders in Bulawayo yet there would be many other bidders meeting specifications. The committee was informed that the SPB was using criteria of awarding tenders to the lowest bidder, which in essence does not mean the company is comprehensive in terms of capacity to perform. The problem reportedly emerges when such bidders fail to deliver or provide sub-standard service.

The public in Bulawayo complained that it was costly for the non-Harare residents to access tender documents as they have to incur transport costs, as well as the normal charges for the tender documents. They recommended State Procurement Board to decentralize by opening offices in major towns and cities of Zimbabwe.

The Tender Board was accused of deliberately delaying to respond to losing bidders so that they do not contest the outcome, which they should challenge within 15 days. The Committee was informed that SPB was inordinately delaying the approval process for tenders and in some cases approving incompetent companies that did not have the necessary capacity to carry out work on government projects. The State Procurement Board was urged to set up a website that will ensure accessibility of tender documents, list of bidders, and the results of the adjudication process. This will assist in keeping the public well informed on the tender processes and thus enhance transparency and accountability.

There has been a concern by different universities in Zimbabwe for being regulated like other industries in the tender process. Their issue was that most of the publishing houses in Zimbabwe did not have capacity to produce books used at these tertiary institutes. As such, they resorted to providers such as the Peri-Programme Enhancement of Research Material Institute, making it difficult for the universities to source three quotations as required by SPB when buying textbooks. They recommended that regulations in the publishing industry be relaxed to cater for the universities.

The public was also concerned with the increase in the non-completion of projects and poor service provisions by the winning bidders. The SPB was urged to carry out due diligence on the capacity, skills and ability to complete projects before awarding tenders. The SPB was also advised to consider the recommendations given by the consultants concerned in the particular industry to curb corruption and ensure efficient use of tax payers’ money.

Local entrepreneurs accused the SPB of breaching provisions of Statutory Instrument 171 of 1993, which states that a minimum of 10% of total tenders should be awarded to the local companies. They noted that awarding tenders to foreign companies has been on the rise, which has a negative impact on economic development. Most of these foreign companies bring in their own employees and repatriate the proceeds of the tender thereby contributing to liquidity challenges in the country. They also noted that the current system did not encourage skills transfer to the locals.

SPB was urged to give 30% of Government business to locals, which will in turn boost their capacity in future tenders. CZI representative buttressed the point by adding that the local companies should be manufacturers and not traders. It was recommended that 25% of Government business should be awarded to local pharmaceutical companies. They also recommended that in a case where a foreign bidder wins the tender, 15-90% of the labour force should be contracted locally to reduce unemployment and poverty.

The Budget Committee is still to meet with the State Procurement Board, after which they will come up with a report to be tabled in Parliament.

Portfolio Committee on Small and Medium Enterprises

The Committee was briefed by the Zimbabwe National Cooperatives Federation (ZNCF) on its operations and the challenges its members were facing. While ZNCF appreciated government’s general support they noted that lack of comprehensive legal framework that catered for the different needs of cooperatives was a major stumbling block to the operations of cooperatives in the country. They also argued that the current set-up where they have been placed under the administration of the Ministry of Small and Medium Enterprises left them at a disadvantage as the ministry tends to pay more attention to the small and medium enterprises at the expense of cooperatives. ZNCF urged government to establish a Ministry of Cooperatives, which will dedicate its focus and resources entirely on cooperatives.

ZNCF also told the Committee that its members were facing challenges in accessing bank loans as most of its members did not meet bank requirements for collateral security. The Committee also heard that some cooperatives were not registered and that such bogus cooperatives were prone to manipulation by politicians for their own political interests.

Thematic Committee on Human Rights

The Thematic Committee on Human Rights was scheduled to meet members of the Joint Monitoring and Implementation Committee (JOMIC) as represented by Minister Elton Mangoma (MDC-T), Minister Priscilla Misihairabwi-Mushonga (MDC) and Minister Nicholas Goche (ZANU PF) on Thursday 31 May 2012. However, the 3 Ministers did not turn up for the meeting, the reason being that it was difficult to secure a date from the 3 Ministers to appear together before the Committee because of their busy schedules.

The Committee wanted to hear an update from JOMIC regarding its operations. The meeting was deferred to a later date when the 3 Ministers were available to appear the Committee together.

Resumption of Parliament Sittings

The House of Assembly will resume its sitting on Tuesday 5 June 2012 whereas the Senate is set to resume its sitting the following week on Tuesday 12 June 2012.

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