The Sunday News
Tinomuda Chakanyuka, Senior Reporter
SENIOR officials at Bulawayo City Council have struck an out of arbitration settlement for controversial monies owed to a contractor who undertook works at Pumula South Phase 3, it has emerged.
Council sources told Sunday News that the out of arbitration agreement will see the local authority pay the contractor more than $100 000. Bulawayo City Council engaged the company (name withheld) for the servicing of 700 high-density stands in Pumula South Phase 3.
The local authority re-tendered the contract under controversial circumstances but also charged the company liquidated damages for failing to complete the job on time.
The contractor took the matter for arbitration, claiming $212 537 in respect of work done on the project and the liquidated damages charged by council. Sources at the local authority revealed that the two parties have, however, agreed on an out of arbitration agreement, which will see council paying $128 700 to the company instead.
“It has since emerged that not only is council going to pay $47 200 for the delay, but will also return $81 500 of deducted liquidated damages,” said the source.
The sources further revealed that while both parties have agreed on an out of arbitration agreement, the local authority was yet to pay the contractor. It alleged that council officials are trying to coax the contractor to doctor figures on the payment invoice to hide the fact that they had agreed to pay back all the liquidated damages they had deducted.
“The contractor has been refusing to sign the agreement because they were not happy with the idea of doctoring figures to hide core points of the settlement. The contractor refused to cook the figures as that would create tax distortions and complications. The contracted company wants to mantain its integirty,” said the source.
It is further alleged that council officials violated protocol when they extended the project time and pay after the contractor had failed to do the job on time.
Such action, the sources said, requires clearance from the State Procurement Board, which clearance sources say council did not get. Contacted for comment the council director of Engineering Services Engineer Simela Dube referred all enquiries to council’s public relations department. Council’s senior public relations officer Mrs Nesisa Mpofu also refused to comment on the matter.
“We cannot comment on the matter as it is still pending before the arbitrator and any agreement reached will be referred to the arbitration for registration,” she said.
Two years ago this paper unearthed a tender scam at BCC where contracts with a combined value of about $8,7 million were re-tendered or extended after winning companies either disappeared or failed to complete works. According to documents, tenders worth
$8 749 914,52 had serious irregularities and had to be either extended or re-tendered altogether, resulting in them exceeding the contract price.
In 2012 Government barred all local authorities from handling tenders after a number of scandals that caught the councils offside, with council officials and councillors implicated in gross underhand dealings to influence the outcome of bids.
The directive saw the disbandment of municipal procurement boards and the formation of procurement committees mainly made up of council officials and led by the town clerks or chief executive officers to manage smaller procurements.
@irielyan
