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Roundup Bulletin No. 22 - 2012
Southern African Parliamentary Support Trust
June 01, 2012
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.
Committee on Industry and Commerce
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.
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.
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.
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.
Committee on Budget Finance and Investment Promotion
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
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.
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
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.
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
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.
Committee on Small and Medium Enterprises
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.
Committee on Human Rights
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.
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.
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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