Tender rules flouted when Brainworks was hired to advise on indigenisation deals, NIEEB admits

HARARE,– The Zimbabwe government’s organ set up to oversee implementation of the country’s controversial local ownership law on Thursday admitted that tender procedures were flouted when an advisory firm was engaged to assist government negotiate deals with foreign firms.

Tender rules flouted when Brainworks was hired to advise on indigenisation deals, NIEEB admits

The Indigenisation Act – enacted in 2008 – requires foreign owned companies valued at over $500,000 to cede 51 percent to black locals. The local ownership law has been cited as a major impediment to foreign investment in an economy battling to recover from a decade-long recession.

Zimbabwe inked preliminary indigenisation transactions worth over $1 billion with mining giants Impala Platinum, Anglo American Platinum and Aquarius, among others, to ensure their operations in the country complied with the law.

Chief executive of the National Indigenisation and Economic Empowerment Board (NIEEB) Wilson Gwatiringa told the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment that government had engaged advisors to help break the resistance by large companies who were reluctant to comply with the law.

Gwatiringa said in 2011, a number of firms engaged through a tender process lacked requisite skills on the Zimplats negotiations, which eventually led to a stalemate when the parent company, Implats accused government of “double dipping” by charging royalties and also claiming equity.

Pressed by parliamentary committee chairman Justice Wadyajena (ZANU-PF) to produce documents proving the tendering process took place, Gwatiringa said he had not brought any.

“Mr Gwatiringa our letter is clear and I am surprised you are telling us you didn’t bring anything when you were well aware of what we want,” he said.

Last week Brainworks appeared before the same committee and admitted they had been ‘head hunted’ to do the work.

“Brainworks appeared before us two weeks back and they said they never went through a tender process and so can you kindly furnish this committee with evidence that there was indeed a tender process on the 29th of August 2011,” said Wadyajena.

Gwatiringa said Brainworks was engaged in 2012 and that no tender process was followed.

“Yes Mr chairman, in what I wrote, which is what I have presented, I was giving a background of the process we went through in 2011. Brainworks were engaged in 2012 after that process,” he said.

Wadyajena interjected and said: “Mr Gwatiringa, we are talking of Brainworks not other companies, how Brainworks was awarded the tender. Did Brainworks go through the tendering process, yes or no, just simple?

“No,” said Gwatiringa.

Wadyajena asked if the parastatal was in the habit of not going to tender on multi-million dollar jobs.

“So we can safely say the law was broken on this Brainworks deal?” asked Wadyajena.

Gwatiringa said the amount charged by Brainworks at $7,500 for 15 hours was lower than the $20,000 other advisors had charged.

Asked whether there was any authorization to engage Brainworks, Gwatiringa said, they were working as a team and that the initial meeting with the firm was at the parent ministry’s offices. – The Source

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