Local firm in ZETDC tender storm

LOCAL company Pito Investments is at the centre of a tender storm following revelations that it was awarded a contract to supply electricity distribution transformers to the Zimbabwe Electricity Transmission and Distribution Company, despite having failed to deliver on another tender for underground cables it was awarded six years ago.

Investigations by The Herald Business reveal that Pito Investments failed to supply various underground cables under a tender worth $7 million, awarded to the company by ZETDC, a subsidiary of Zesa Holdings in 2010.

Critically, Pito was paid $1,1 million deposit to supply the cables but ended up bringing product which was not under specification and rejected by ZETDC. The tender was never fulfilled.

Yet in spite of that history, ZETDC went on to award Pito another tender worth $7,2 million for the supply of 3 000 distribution transformers to which they paid a $1,9 million deposit.

Pito has, however, so far failed to satisfy both tenders despite receiving the $3 million.

This forced ZETDC to ignore the running tender and turn to its sister company, Zesa Enterprises for the supply of the transformers.

ZETDC finance director Thoko Dhliwayo confirmed the situation to The Herald Business this week.

“We awarded them (Pito) a $7,2 million transformers tender in 2012. The contract was based on the supplier raising advance payment guarantees. ZETDC then agreed with Pito this year that they will secure funding on their own in order to complete the order by the end of this year,” she said.

Contacted for comment Pito Investments managing director Alex Chideme shifted the blame to ZETDC, claiming that the company had enough capacity to supply but the transmissions company kept on raising the issue of lack of funding.

Mr Chideme said Pito Investments managed to raise a guarantee with CBZ Bank of $4,8 million and $7 million with Ecobank.

“As Pito Investments we won the tender to supply transformers in 2012. We have been waiting for ZETDC to tell us of their financial position because they kept on saying that they didn’t have enough funding for us to supply the transformers.

“We supplied about $1,5 million of the tender in 2012. For some time now we have been writing letters to ZETDC but they kept on saying they don’t have money. We then raised a guarantee from CBZ Bank of $4,8 million for the supply of the transformers after they said that they don’t have funds,” said Mr Chideme.

“We are supposed to supply about 3 000 transformers as part of the tender requirements. We received communication in 2014 and 2016 from ZETDC saying they did not have funding for the transformers. We have re-signed another contract with ZETDC where we expect to deliver the transformers by the end of this year,” he said.

Information at hand shows that Pito Investments also supplied wrong equipment to ZETDC under a tender worth $7 million for an underground cable.

“The conditions were that Pito was going to give us a bank guarantee and we would pay them against that guarantee. After some years we then paid them $1,1 million and they took months to deliver and on delivery recently we realised the cable was wrong and we rejected it.

“In terms of our records, that $6,8 million has not been delivered because the first attempt came out wrong. It didn’t need testing because it was clearly written ‘1KV’ instead of ‘11KV’. In short, we paid them and they delivered the wrong type of cable. On transformers we are saying to them deliver and we pay you after delivery but they have not done that,” said Mrs Dhliwayo.

ZETDC managing director engineer Julian Chinembiri confirmed paying Pito Investments.

He also confirmed that Pito supplied wrong equipment.

“I am currently out of the country but I can only say that we have been having problems with those Pito guys for undersupplying. You can talk to our finance director to get clarification on the issue,” said Eng Chinembiri.

Pito Investments is supposed to supply 63 kilometres of various 3c xlpe A1 and CU cables.

It is alleged that ZETDC has not recovered the $1,1 million which it paid to Pito Investments.