13 April 2018

Zimbabwe: Of Corrupt Tender Deals and Elite Enrichment

opinion

Case of Beitbridge - Chirundu Highway scandal

The withdrawal, this week, by the Emmerson Mnanagwa government of the tender awarded to Geiger International for the dualisation of the Beitbridge-Harare-Chirundu Highway, reveals shocking levels of corruption by the Zimbabwean authorities, which awarded the tender to an undeserving company in the first place. The US $2.7 billion tender was awarded to Geiger International in 2016 and close to three years later, no construction has started. The government has cited lack of progress on the project, as the reason for the cancellation of the tender, while the contractor has remained mum. But what could be the reasons for the lack of progress?

On its website, Geiger International, describes itself as "a leading supplier of security products, vehicular equipment, textile and housing products" adding that it "has successfully been manufacturing, under license, military goods in its own factories in mainland China for over two decades". On construction projects, the company website states that "our regional head offices in Shanghai, China, run significant construction projects with some very competent and very powerful companies as joint partners in the following sectors... ". It relies on subcontracting other players in the construction sector. With no competency of its own, the company has built a syndicate of Chinese companies, which it subcontracts for various projects that may entail inflating the costs. A Google search on the road construction projects carried out by Geiger International shows only one project - the stillbirth Beitbridge - Harare - Chirundu Highway!

When the government announced the estimated cost of the Beitbridge - Chirundu Highway dualisation project, there was an outcry from Zimbabweans who argued that the price was inflated. It was also revealed that local contractors would receive a 40 percent share of the first phase of the project, valued at US $400 million. There was no criterion on how the local players were going to be selected. The fusion of fraudulent Austrian-Chinese companies with local "tenderpreneurs", equally without capacity, meant the project was primarily for the self-aggrandisement of the negotiators. Predictably, when the underhand deals failed to materialise, the project fell through. It would be interesting if Geiger International would issue a statement on why it defaulted on the project. Demand for bribes, corruption and nepotism will top the list of grievances.

The Chinese connection

The government has repeatedly stated that Geiger International is an Austrian company. While its administrative office is based in Feldkirch, a medieval city in the western Austrian state of Vorarlberg, Geiger International moved to Asia and established its regional headquarters in Shanghai in the early 1990s. It claims on its website to be operating in China but using European standards. This is why the company has maintained that it is headquartered in Austria, ranked 16th on the Transparency International corruption perception index, to disguise its opaque operations. Geiger International has been part of China's crusade to plunder Africa through negotiating corrupt deals with ruling elites on the continent. It is therefore no surprise that the tender was jointly awarded to Geiger International and China Harbour Engineering Company. This gave an impression of two international companies, one from Asia and the other from Europe, when in reality these are both Chinese companies of the same syndicate.

In 2017, legislator Eddie Cross quizzed Transport Minister Joram Gumbo over the award of the tender to Geiger International, arguing that it is a very small company headquartered in a small Austrian Village with no capacity to carry out such a big project: "...I cannot find any record of it in Austria and all, none at all. It has an address in a small Austrian village but that is the only thing I can find", said Hon Cross. Minister Gumbo defended Geiger International as "a very big company" with the capacity to deliver.

In 2011, the World Bank blacklisted Geiger International's Chinese partner, China Harbour Engineering Company alongside ten other Chinese companies for fraud and corruption. By the time the Beitbridge - Chirundu Highway award was made in 2016, information over the blacklisting of this company was now in the public domain. In awarding such a contract, or any contract for that matter, due diligence is a prerequisite. This means the government, in particular the Minister of Transport, Joram Gumbo, was well aware they were engaging with criminals. Minister Gumbo is also embroiled in yet another US $33 million tender scandal involving the Civil Aviation Authority of Zimbabwe, according to The Zimbabwe Independent.

This is not the first time Zimbabwe has chosen Chinese investors without any proven track record for the job they are contracted to do. In 2006, a multi-billion alluvial diamond field was discovered in Marange, eastern Zimbabwe. Instead of allowing locals, who had discovered the diamonds in the first place, and the Zimbabwe Mining Development Corporation to extract the resource, the government deployed troops and massacred over 400 artisanal miners and awarded the lucrative fields to dubious Lebanese, South African and Chinese syndicates who had no history of diamond mining. One of the investors was a Chinese mafia king, Sam Pa, who has eight aliases and corresponding passports. He is also known as Antonio Famtosonghiu Sampo Menezes, Samo, Sam King, Sa Muxu, Tsui King Wah, Xu Songhua, Xu Jinghua, Ghui Ka Leung- is the head of the Hong Kong based 88 Queensway Syndicate which has brokered lucrative deals for China on five continents.

Three Chinese companies - Sam Pa's Sino Zimbabwe, Anjin Invetsments, and Jinan licensed to extract Marange diamonds. In 2016, former President Robert Mugabe announced that the diamond mining firms had robbed Zimbabwe of more than US $15 billion in potential revenues.

Time to take a stand against corruption

Parliament in Zimbabwe has not been able to carry out its oversight role, especially where tenders are involved. For instance, when Geiger International was summoned to appear before the Transport and Infrastructure Development Parliamentary Portfolio Committee, it didn't show up and nothing happened to them. Former Minister of Mines Obert Mpofu was also summoned to give evidence on the missing US $15 billion and he refused to speak, an act that made him seemingly untouchable. Most of the corrupt deals are done by ministers and their principals. If parliament is allowed to play its oversight role, corrupt deals will be exposed and nipped in the bud and will prevent a national disgrace. It must be legislated that all deals of US $100 million and above must be approved by parliament to safeguard the national interests.

The anti-corruption commission must be fully mandated to handle matters of high-level corruption and be empowered to impose prison sentences on offending public officials. Unless and until corrupt officials are sent to prison and forced to pay back the proceeds of corruption, Zimbabwe will remain handicapped by corruption.

Above all, Zimbabweans must hold office holders accountable by organising demonstrations and various forms of protests against corruption. Regarding the Geiger International case, the citizens must organise themselves and demand the resignation of Transport Minister Joram Gumbo and call on the president to institute an inquiry into the scandal.

Farai Maguwu is Director of Centre for Natural Resource Governance. He writes in his personal capacity. 

Zimbabwe

Mnangagwa Tossed U.S.$2,000 at Armed Renamo Bandit During Escape - Son

President Emmerson Mnangagwa tossed a US$2,000 bribe into the hands of a Renamo bandit who had pointed an AK rifle on… Read more »

See What Everyone is Watching

Copyright © 2018 Fahamu. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.