The Herald (Harare)

21 April 2014

Zimbabwe: Zesa's Pre-Paid Meter Dilemma

Zesa Holdings is sitting on thousands of prepaid meters as contractors cannot fix them because of the way the State Procurement Board structured their contracts, it has emerged.

Over 100 000 households in Harare, Bulawayo and other areas are yet to get the pre-paid meters as the company contracted to install them, Solahart, is failing to meet demand.

Two companies, Finmark and Nyamazela both of South Africa were contracted to cover other regions and finished installations, but cannot move into areas with shortfalls because of procurement procedures.

For the companies to move into areas with shortfalls, according to procurement regulations, the contracts have to be varied with SPB approval.

Zesa Holdings, through its subsidiary the Zimbabwe Electricity Transmission and Distribution Company, has written to the SPB seeking variation of the contracts.

Zesa spokesperson Mr Fullard Gwasira said last week they were still waiting for a positive response from the SPB.

SPB chairman Mr Charles Kuwaza said according to Section 26 of the Procurement Regulations no-one should vary a contract without the procurement body's approval, which reads: "In a contract for a fixed supply or service, the quantity of the supply or the extend of the service shall not be varied without the approval of the Board."

Mr Kuwaza said Zesa's reasons for varying the contracts were unsatisfactory.

"These delays were caused solely because ZETDC varied contracts without seeking necessary approval from the SPB," he said. "The explanations for violation of Section 26 of the regulations were unsatisfactory, leading to lengthy correspondences between ourselves and the (ZETDC) accounting officer. Clearly, it is not illegal to vary contracts, but that must be properly authorised."

Initially, there were four companies contracted to install 500 000 prepaid meters countrywide, but ZTE's services were withdrawn as they allegedly supplied faulty meters.

Just over 400 000 meters have been installed since August 2012.

Mr Kuwaza said the SPB held several meetings with ZEDTC management to "summarise" the problems besetting contractors.

"At one point, the ZETDC asked the board (SPB) to increase quantities of meters on the ZTE contract, yet at the same time they were telling us that the ZTE meters were failing to meet the tender specifications. That was absurd.

"The ZETDC also told us that they had cancelled the contract with ZTE, but when we wrote to ZTE, they refuted this assertion. We demanded explanations for these contradictions.

"While we deal with urgent matters promptly, these can only be finalised if the questions we pose are answered satisfactorily."

Mr Gwasira said Zesa wanted to deploy excess meters to deficit areas.

"As Zesa, our paramount objective is to realise the pre-paid metering project in full in the shortest possible time. Consequently, if there is any excess capacity in any of our contractors, who have finished their prescribed areas, we want to deploy that capacity elsewhere."

Zesa sources said had it not been for bickering between the SPB and the power utility, installation of pre-paid meters would have been complete.

"We are still to install 100 000 in Harare and the Western regions and this cannot happen because of the way the contract was structured," said one source.

"The Zim-Asset target base has 800 000 meters, but we have 500 000 prepaid meters meaning the other 300 000 are going to be smart meters."

The smart units, being installed at a cost of more than US$100 million, are being introduced to curb tampering which has seen Zesa losing US$10 million monthly.

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