Chivhayo in fresh energy scandal

Chivhayo in fresh energy scandal
Published: 14 June 2019
Controversial businessman Wicknell Chivhayo is in the eye of a storm as it emerged this week he could have misled the Zimbabwe Power Company (ZPC) into making payments for earthmoving equipment worth US$800 000 to a non-existent US firm, it has been learnt.

The ZPC is a unit of the country's state-owned power utility.

The revelations brings a new twist to the saga in which  Chivhayo's Intratrek Zimbabwe Private Ltd was awarded the tender to construct a 100 megawatts (MW) solar power plant at Gwanda with Chint Electric Company Limited of China as its technical partner. He was paid about US$6m but failed to deliver.

But a report submitted to the Ministry of Energy and Power Development, some payment of funds to Chivhayo stinks to high heaven despite his acquittal by the High Court on charges of defrauding the power utility.

According to the report, on April 26 2016, Intratrek got central bank authority to load US$849,475 on their VISA card for purported purchase of earth moving equipment from a USA based equipment supplier, Pietznack Plant and Earthmoving Services.

"A Google search on the supplier revealed that the address on the invoice for the earthmoving equipment was an unoccupied block of residential flats," the report said.

"These advance payments were made to the contractor without the knowledge of the company secretary's office which administers all contracts. The board was also not aware that Intratrek had been paid without an Advance Payment Guarantee."

The report said the payments were made in small weekly amounts which were within the managing director Noah Gwariro's threshold and thus did not need board approval.

According to the report, at the instigation of Intratrek, a desktop feasibility study was completed by Shanghai Electric Power Design Institute of China in November 2015. The due diligence for the project was done in March 2016; again well after the contract had been signed by the parties.

ZPC paid a total of US$5,6m for designs and feasibility study, and pre-commencement works and in terms of the contract, Intratrek was obligated to provide an Advance Payment Guarantee (APG) against advance payments made by ZPC and this was not done.

On February 3, 2016 Intratrek submitted a request for employer advance for pre commencement (construction) activities proposing four monthly installments of US$1,2m (totalling US$4,877,907) payable on the 10th of each month from February 10 to 10 May 2016.

Thereafter the projects and technical director Robson Chikuri, committed to pay Intratrek up to US$200 000 per week and the un-securitised advance payments were authorised through Payment Release Certificates (PRCs) that were signed by the managing director, projects and technical director and the finance director.

"Ironically there was no progress at the project site against which the Payment Release Certificates were made that is the certificates were fictitious," reads the report.

Chivhayo dismissed the report.

"That's why the High Court acquitted me on 22 March and granted specific performance on 18 December. No one travelled to America to visit that company. It was mere speculation and conjecture," he said.

The Engineering, Procurement and Construction (EPC) contract for the Gwanda Solar Power Project was signed in October 2015, at a cost of about US$172m (excluding duties and taxes).

After winning the tender, Intratrek embarked on per-commencement activities in June of 2016 in terms of Schedule 11 of the EPC contract and the per-commencement activities were topographical surveys, site establishment, geotechnical surveys, perimeter fencing, access road construction, temporary site accommodation and offices and ground
- businesstimes
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