At least four Harare City Council officials and 13 councillors are facing arrest over allegations of attempting to siphon millions of dollars in a dubious US$868 million Chinese loan deal.
The Special Anti-Corruption Unit in the Office of the President (Sacu) is probing suspended town clerk Hosea Chisango, acting chamber secretary, Charles Kandemiri, acting finance director Stanley Ndemera and acting Harare water director Mabhena Moyo.
Councillors under investigation include Kudzai Kadzombe, Stewart Mutizwa and Luckson Mukunguma.
Documents at hand show that councillors sat jointly as the Environment Management Committee and the Finance Committee to endorse an alleged fraudulent report from the town clerk's office.
"The report had false information. It stated that Sinohydro was still at a prefeasibility study yet he (town clerk) had completed detailed studies, designs and priced BOQs (and) it had inflated prices," part of the documents gleaned by the Zimbabwe Independent read.
Sacu could not immediately comment saying it was still investigating the shady water deals.
The US$868 million deals were meant to address the Harare water crisis but Chisango and officials in the water section allegedly allocated the contracts to Sino Hydro, China Gezhouba Group Company (CGGC), China Geo-Engineering Company (CGEC) and China Machinery and Engineering Company (CEMC), without following proper tender procedures.
A report sent to the Zimbabwe Anti-Corruption Commission (Zacc) showed that Harare was likely to be prejudiced of US$100 million in the US$237 million deal with a Chinese firm to refurbish Lyndhurst water plant.
"Armed with commercial contracts, the Chinese are now entitled to the US$237 million. Any cancellation will result in the employer paying huge costs," a whistleblower's report reads.
"The residents of greater Harare (Harare, Ruwa, Norton, Epworth, Chitungwiza and New City) were committed to such an exorbitant loan and the best way out is to delete institutional memory, by dismissing the some employees."
Sources said there was a problem over how Chisango engaged a Chinese firm to Lyndhurst and Crowborough Sewage Treatment Plant.
"During the negotiations with the Chinese company at a lodge to get a loan for the construction of the two sewage plants; the first conflict between the Chinese Company with council workers was the designs of the sewage treatment plants and selection of treatment process.
"Council experts noted that Lyndhurst did not need that expensive design and process system simply because it receives predominantly domestic sewage. The second conflict was that the cost of the two sewage plants was too exorbitant with comparison to the international market rates.
"On average the two sewage plants were at a cost of US$1 million per megalitre which was a unit cost price when the technology was first introduced 40 years ago. The current unit rate has reduced to US$0,5 to US$0,7 million per megalitre due to market competition and technological improvements, thus the Chinese company was supposed to push down their bid by that margin. This means the cost of the sewage plants would be reduced from US$120 million to US$84 million."
Another conflict in the department of water, it emerged, involved the attempts by council to re-engage Sidal Engineering and ERAC (Pvt) Ltd without going to tender.
"The other major conflict prevailing is that the City of Harare wanted council officials to re-engage Sidal Engineering and ERAC (Pvt) Ltd in terms of Urban Councils Act (Chapter 29:15) Section 211 (10) (a) without inviting public tenders," an investigative report handed over to Zacc reads.