Harare — The City of Harare has dragged itself into a procurement scandal after it hired a Ukrainian investment company to construct Joshua Mqabuko Nkomo Expressway, commonly known as Airport Road -- expected to chew US$100 million -- without going to tender and later appointed a company with links to key city authorities to manage the project.

The scandal scaled to new heights earlier this month when council rejected unsolicited bids from local construction companies and gave the main contractor, Augur Investments -- a Ukrainian company incorporated in Estonia -- the green light to sub-contract a South African company as project partner.

Through its project managers -- Classique Project Managers -- the city authorities, who jointly own the project with the government, advised local contractors that the Ukrainian company had already won the contract and was already negotiating a partnership deal with a sub-contractor of its own choice.

It is understood that Augur Investments has already concluded negotiations with a South African company called Power Construction as project partner.

Investigations by The Financial Gazette revealed a number of local contractors, including Costain, Murray & Roberts Zimbabwe and a consortium of local contractors, had written to the City of Harare to express interest in the project.

Although an official comment could not be obtained from the Construction Industry Council, members of the association are understood to have drawn out their daggers against the council demanding a reversal of the whole contract as it openly disregards the principle of transparency in public procurement as stipulated by international best practices.

"According to council policy, projects of that nature should be put to tender for the council to get the best possible deal by comparison," a source within the council confided with this paper. "A tender gives a project owner the opportunity to assess the bidders in terms of pricing and capacity. The way this one has been handled flouts council policy on outsourcing, especially for large-scale capital projects like the Airport Road."

Local contractors had pinned their hopes on the project -- the biggest in more than 10 years -- toget back on their feet after a protracted slack in business.

Statistics show that construction activity in the country contracted steeply in the last five years as there had not been any new building plan approval after 2003.

Others alleged that the backdoor deal might inflate the price of the project and prejudice the city council of thousands of United States dollars as it gives individual officials too much discretionary power and room to stitch up underhand dealings.

Sources say Michael Mahachi, the last chairman of the Harare Commission, which ran the City of Harare for over five years, "may have" used his influence and connections to have Classique Project Managers appointed as the project manager.

Classique Project Managers, where Mahachi is partner, is based at the former Harare commissioner's property known as Mahachi Quantum House along Nelson Mandela Avenue in Harare.

Audley Chatora, the managing partner of Classique, refused to comment on the decision to sub-contract a foreign company for a local project and referred all questions to Harare Town Clerk, Tendai Mahachi, who kept on saying he was locked up in a "long meeting with African Develop-ment Bank officials".

Sources say the City of Harare was introduced to the Ukrainian investment company by the government last year after a visit to the former Soviet state by President Robert Mugabe.

In a joint deal with government, the city council last year signed a partnership agreement with Augur Investments, under which the contractor would dualise, extend and develop the Airport Road into a highway with complex high rise motorways and road and rail subways.

The road, which stretches for 15 kilometres from the Harare International Airport to Dieppe Road in Braeside where it starts, will be dualised and extended up to the intersection of Robert Mugabe Road and Enterprise Road in the city.

Two complex bridges will be built over the Harare-Mutare railway lines, which will be reduced to a rail subway, and over Robert Mugabe Road after which the raised motorway will drop into Enterprise Road.

In return for committing funds into the large-scale capital project, Augur Investments, which has subsequently created a property development company called Sunshine Developments to implement the project, got large tracts of prime land in Harare.

The company got land in Waterfalls around the Boka Shopping Mall, some 50 hectares in the Mukuvisi woodlands stretching from Makro in Hillside up to Seke Road and part of the Warren Hills Golf Course where it is building a hotel and upmarket residential properties for sale.