2 May 2014

Zimbabwe: Banks, Energy Minister in Showdown

DISGRUNTLED companies are considering legal action against Energy minister Dzikamai Mavhaire after he ignored their demands to reverse the decision by the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to contract PowerTel to sell prepaid electricity on its behalf without going to tender.

The controversy has also extended to ZETDC and PowerTel's choice of distribution networks with banks crying foul at perceived bias towards a few government-linked banks.

CBZ, ZB and Agribank were chosen along with Zimpost, NetOne, Petrotrade and Tel-One -- a development that has left other banks fuming at being left out of a potentially lucrative deal.

The four companies Weph Commercial Agencies, Energy and Information Logistics, Aura Group and Comm Shop gave Mavhaire a seven-day ultimatum to reverse the ZETDC-PowerTel deal which was controversially sealed after the Statement Procurement Board twice cancelled the tender citing irregularities.

"Our clients have discovered that ZETDC has contracted PowerTel without going to tender and has asked PowerTel to sell electricity on its behalf," wrote Atherstone and Cook, the law firm representing the aggrieved companies, in a letter dated April 9.

"It is therefore clear that what ZETDC has done and what PowerTel is doing is clearly unlawful and as such must stop. We bring this to your attention in your capacity as the responsible minister with the hope and confidence that you will use your influence to immediately ensure that this illegal practice is stopped forthwith."

The companies warned of court action "if we do not get confirmation within the next seven days that your good offices will act responsibly".

New Bankers Association of Zimbabwe (Baz) president Somkhosi Malaba, who is also the CEO of Agribank, declined to comment yesterday referring all questions to Baz CEO Sijabuliso Biyam who said he had "not received any complaints" from the banks.

Mavahaire also refused to comment yesterday, saying he is in rural areas.

"This is discriminatory and it is against the spirit of competition. We have communicated our position to ZETDC and the chosen banks."

New Bankers Association of Zimbabwe (Baz) president Somkhosi Malaba, who is also the CEO of Agribank, declined to comment on the matter yesterday referring all questions to Baz CEO Sijabuliso Biyam who said he had "not received any complaints" from the banks.

Mavahaire refused to speak to the Zimbabwe Independent yesterday, saying "I am in the rural arrears for the holiday, sorry but thank you for calling".

But two weeks ago, he said there was nothing amiss about the deal, stating PowerTel is a competent subsidiary of Zesa Holdings which is up to the task of e-vending.

"The policy position is that whatever government is able to do we can do it for ourselves and not look outside," said Mavhaire then.

Zesa Holdings also said in a press release, PowerTel has the "technical competence... to ensure that systems between ZETDC and third party vendors are efficiently working to meet the needs of consumers."

This has however been disputed by sources within the aggrieved companies who said "while the initial tender had stipulated a one-month deadline for rolling out the vending platform to a nationwide distribution network, it has been three months since the appointment of PowerTel and it has failed to make a substantial impact on the market".

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