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Airport Road Deal: Special Investigations Report exposes Augur Investments’ corrupt deeds with authorities

 

By Investigations Reporter

 

A SPECIAL INVESTIGATIONS COMMITTEE’S REPORT ON CITY OF HARARE’S LAND SALES, LEASES AND EXCHANGES FROM THE PERIOD of OCTOBER 2004 TO DECEMBER 2009 exposed a shoddy deal entered between City of Harare and Augur Investments. The report is clear in exposing the then Minister of Local Governments Ignatius Chombo, Ken Sharpe the Chief Principal of Augur Investments, the former Town Clerk  Tendai Mahachi.

The report was presented by Harare City Council’s Chairperson of the Special Committee,  Councilor W. Dumba in 2010.

The report states that these principals signed Memorandum of Understanding in June 2007, followed by Shareholders Agreement September 2007 and other documents which were signed thereby paving way for the development of a Joint Venture.

It is from these meetings that Augur Investments was illegally awarded the tender to construct the dualisation of the Airport Road and was to receive land in Harare as a form of payment. The construction failed to take place.

As the events were unfolding, a number of irregularities were sighted. These included M. Mahachi, an appointed Councilor who was now doubling as a Project Manager for Augur Investments before parceling out land to it.  The Special Investigations Committee sighted this as an irregularity and conflict of interests.

“The September 2008 Meeting held at 2 Denmark Avenue, Milton Park and present were K. Sharpe, M. Van Blerk, T. Mahachi, P. Chiwanga, I. Mbiriri, S. Demos, A. Gibson. At this meeting, M.Mahachi (Appointed Councillor) – gave feedback on Council land he had identified for payment to Augur. NB M. Mahachi the custodian of Council land as a Councillor but now Project Manager for Augur and identifying land for his new bosses (Conflict of interest) 4 the October 2008 Addendum to Memorandum of Agreement showing schedules A, B, and C with a total area of 733,9ha at a total cost of US$52 320, 777,00. The November 2008 The steering committees held its first meeting in the Ninth floor of the Ministry of Local Government, Public Works and Urban Development offices. Members present included P. Mbiriri (Ministry of Local Government, Public Works and Urban Development), G. Mlilo (Ministry of Transport and Communications), M. Van Blerk, S. Demos, M. Mahachi (Project Manager) A. Chatora (Classic Project Management)”

 

The interviews held by the Special Investigations Committee with Directors Pfukwa, Chiwanga, Eng Munyonga, Town Clerk and Chamber Secretary revealed all elements of corruption done by Augur investments and authorities.

 

Findings from the interviews

The Report clearly states that Augur Investments was illegally awarded the Airport Road without going to tender and there was no progress recorded on the purported construction.

 

“No tenders for the Airport Road project were floated. No proper valuation of equities was undertaken. Power Construction was sub-contracted by Augur to do the preliminary construction work for the Airport Road in total breach of the agreement.US$3 990 129 for mobilisation fees including other preliminary works was signed for by the Director Engineer Pfukwa without Council approval or the Mayor’s consent (Ref. Service Certificate No. 1 dated 27 February 2009).(see Appendix T) It was discovered that work on the project was stopped not because of Council resolution but due to arrears of US$500 000 to be paid by Council to the Environmental Management Agency. Council failed to ascertain the cost of the Airport Road project resulting in a trip to a South African Company (Power Construction) by Engineer Munyonga to enquire on the possible cost of the project. The Engineer ascertained that the project would cost around US$60 – US$67 million and Power Construction SA would be sub-contracted to do the job. NB The project is now officially quoted at US$87 million. No progress updates were made to Council on the project.”

 

According to the report, prior the progress on the construction of the road lacked transparency and accountability. This went a long way in exposing the authority’s failure in enhancing good corporate governance.

The interviews contained in the report revealed that Stand 812 was hurriedly transferred to Augur Investments. The Mahachi led Care Taker Commission that dealt with Augur Investments was illegal.

 

 

“Stand 812 was hurriedly transferred as payment to Augur before being brought to Council for consideration.The Committee noted that at the time the Augur deal started (22 June 2007) the then Caretaker Commission was illegal (Ref: Appendix H) Legal documentation dated 10 February 2010 from High Court and Supreme Court Ruling).10) It was noted that there was personal interest and conflict of interest on the part of the Chairperson of the illegal Caretaker Council (M. Mahachi) as confirmed from documentation on meetings held at Augur.”

 

Augur Investments breached the contract after dismally failed to deliver on the construction of the Airport Road where it also chose to hire the services of another contractor. As a result Augur Investments received 93, 0993 ha pieces of land for the work that was not done. Amid all this, all the processes lacked transparency and accountability.

 

“Augur Investments breached the Agreement (4.2.1.) which states that the parties agree that Augur shall provide an initial list of equipment for duty free import but instead chose to hire a contractor (Power Construction) to do the preliminary works. This was not communicated to Council. Ninty three comma zoro nine (93, 0993) ha pieces of land were transferred to the below mentioned shelf companies which had no evidence of legal links with Augur as payment for the preliminary work done on the road:-

Yellow Seat – Stand 19345 HTL, Home Day Properties – Stand 19609 HTL, Ice Class – Stand 19610 HTL, Doorex – Stand 19672 HTL, Electro – Stand 19673 HTL, Express – Stand 19674 HTL, Home Villa – Stand 19675 HTL, Total Area – 93, 0993 ha.”

The same procession on the transfer of land is also contained in the ‘DEED OF SETTLEMENT between Augur Investments and City of Harare.

In the midst of investigations it was discovered that some files containing crucial information were missing and this possibly had an effect on the course of investigations.

“NB The Committee noted that the file for stand 19673 allocated to Electro Company could not be found. Some of the files provided to this committee had most of the information pulled out to dupe the investigation team.”

All meetings were secretly held at Minister Chombo’s Local Government Offices, Augur’s Milton Park Offices and Classic Offices outside the knowledge of the council.

“All meetings of Airport Road project were held at Augur’s Milton Park Offices, Ministry of Local Government, and Classic Offices without informing Council.The Chamber Secretary was advised not to be involved in the Airport Road project by the Minister (I.Chombo) but her subordinate, (Chief Legal Officer) was to be the Council’s legal representative in the project.”

The shoddy deal had seen the evasion of tax payments were the government was also robbed of its revenue

“There was no evidence to show that tax was remitted to Government after Council made its payments to Augur. According to statements made by the Town Clerk, the City of Harare’s role on Airport Road project was regulatory whilst Augur’s obligation was that of completing the road and hand it over to Council. The machinery and equipment used during construction was also supposed to be handed over to Council. NB The handing over of the equipment was the integral part of the agreement but this was not done since Augur brought no machinery and equipment as agreed.

A site visit to the Airport Road by the Special Committee revealed that no progress had been made and no machinery equipment had been either hired or purchased.

“The Special Committee also carried a site visit of the Airport Road

Project and noted that–

(1) Operations at the Airport had since stopped.

(2) There was no machinery and equipment on site.

 

 

 

Staff Reporter
the authorStaff Reporter