Harare bigwig under probe over $5m deal
HARARE City Council (HCC) acting finance director Godfrey Kusangaya is among top officials at the local authority facing investigations over a US$5,4 million water treatment contract, which was awarded to South African-based Nanotech Water Solutions.
In 2020, HCC contracted Nanotech to install a chlorine dioxide water treatment plant at Morton Jaffray, but allegedly registered it wrongly with the Reserve Bank of Zimbabwe as part of efforts to scuttle the deal in favour of a rival firm.
Kusangaya is now under investigation by the Zimbabwe Anti-corruption Commission (Zacc) over allegations that he deliberately registered the deal at the central bank as a supplies contract instead of a services contract which has stalled its implementation.
If implemented, the deal could save the capital an estimated US$300 000 monthly from the US$3 million it currently spends to procure water treatment chemicals, according to documents seen by the Zimbabwe Independent.
Reserve Bank of Zimbabwe (RBZ) exchange control guidelines state that a firm holding a supplies contract is expected to submit acquittals for the material it has supplied periodically, while a company that entered into a services contract is bound to do the same upon completion of the project it is undertaking.
e discrepancy was pointed out by Nanotech, which alleged that it was a ploy by Kusangaya and other high-ranking city officials to revoke its contract in favour of a company identified as Acumen.
To date, Harare has paid US$1,1 million to Nanotech, which has started work on the project, but the central bank has stopped
disbursing funds citing the anomaly. This has left Nanotech struggling to complete the project.
In a letter dated June 28 this year, Nanotech director Benson Mukombo wrote to the chairperson of Harare’s technical committee on water, Hodson Makurira noting that Kusangaya objected to correctly registering the company’s contract when the anomaly was pointed out.
The Makurira-led committee was appointed last year by President Emmerson Mnangagwa to proffer lasting solutions to Harare’s protracted water crisis, which has seen most of the city’s suburbs go without water for decades.
“We were called to attend a tripartite meeting on the 26th of June 2024, involving City of Harare, Ban-cABC and our company (Nanotech), which we thought was meant to deal with the issue of acquittals as per your recommendations,” reads Mukombo’s letter, which was also copied to town clerk Phakamile Mabhena Moyo.
“In the meeting a representative from the bank acknowledged that the contract between the City of Harare (and our company) is by nature a services contract and the bank was willing to assist in getting the contract registered the correct way so that the project can go ahead.
“The finance director, however, objected to the registration of the contract as a service contract… What we are now worried about is that it was the same…director who made the mistake of registering it as a supplies contract and the same director is hiding behind this mistake, in the process acting as the judge and jury in this case.”
Kusangaya had not responded to questions from the Independent at the time of going to print.
This publication sought to understand the party which was responsible for registering the contract with the central bank.
Coupled with that, the Independent also wanted to find out how HCC was addressing the wrongly registered contract and implications arising from that.
Documents show that prior to Mukombo’s letter, Zacc on June 7 demanded several documents from the town clerk, including the Nanotech contract under a warrant of search and seizure issued by the courts.
“It is, therefore, directed that the town clerk or some other person in authority at Town House…provide the following documents, records and articles …
“Proof of payments to Nanotech, bill of entries for the goods delivered by Nanotech…and acquittals for the US$1 068 000 000 paid to Nanotech,” part of the warrant and seizure order reads.
In a series of documents read by the Independent, Nanotech proceeded to write to Zacc on June 24, raising grievances which include alleged abuse of the anti-graft body by top HCC officials to scuttle the firm’s running contract.
Nanotech’s letter reads: “As a foreign company trying to execute a project in your country, we are extremely concerned by events of the recent past, which have compelled us to write to you seeking … you to carry out a proper investigation of the motives and actions of individuals who make baseless allegations against us as well as the potential abuse of your offices by these same elements.
“The same people, who are trying to get our contract cancelled are behind the promotion and encouragement of a company called Acumen, which they want to corruptly take over this project. Their plan is centred on making false allegations against us with the hope that these allegations will … stick and get our contract cancelled and awarded to Acumen.
“The main point in their allegations is that Nanotech did not do RBZ acquittals for the money that was disbursed to it.”
In the same letter, Nanotech implored Zacc to engage Makurira’s technical committee assembled by Mnangagwa to understand what was hampering the water treatment project.
“It will be extremely helpful for your commission to reach out to the 19-member technical committee on Harare water so that you can find out from them what problems they found out and who are the people behind the problems.
“I am sure that there are a lot more irregularities which they have so far discovered and most of them have nothing to do with this project but are being done by the same people,” the letter reads.
Zacc spokesperson Thandiwe Mlobane confirmed that the body was probing the matter, but declined to disclose details
Makurira told the Independent that Harare should embrace Nanotech’s water treatment method.
He said: “We want the technology. Harare must ensure that it migrates to the new technology so that it supplies its residents with clean water.”