A Bulawayo property developer may have swindled scores of desperate house-seekers of millions of dollars in a scam that could rope in the Bulawayo City Council, the Deeds Office, the Zimbabwe Revenue Authority and two building societies.
Alpha Construction which is owned by Jonathan Gapare, who is presently campaigning in Chivi South in a bid to oust sitting Member of Parliament Charles Majange, is reported to have failed to build at least 60 houses in Cowdray Park’s Section 12, more than two years after being paid.
In addition, some 225 houses in various stages of construction were built on the wrong spot and may have to be demolished because they are encroaching onto the next stand.
Some of the houses that are complete have been allocated to more than one person. The person staying in the house usually does not have title deeds while another, who in most cases resides outside Bulawayo, has the deeds.
At least two stands, 6702 and 6711, are legally owned by two people, each. Each has title deeds for the same stand.
Two house-seekers who have given up hope of seeing their houses built are now suing the company for about $100 million.
According to their lawyer, who declined to have their names published, one client, an old lady, paid $95 000 for the stand and $550 000 for the construction of a four-roomed house in October 2001.
The other client paid $95 000 for the stand and $1 654 875 for the construction of a three-roomed house in January 2002, but both houses have not been built up to now.
Insiders say the two will be lucky to get any money because the company is in financial problems. The company even admitted to the council in June that it was having “cash flow problems”.
A major bank which is owed about $2 billion is reportedly making frantic efforts to recover its money. Officials from the bank’s head office in Harare were reportedly in Bulawayo last week. Another bank is said to be owed close to $1 billion.
Alpha Construction was awarded a contract to service and develop 532 stands in Cowdray Park eight years ago. But up to now more than 60 stands are still virgin land.
Some of the houses that have been completed do not have toilets or running water, yet standard agreements most of the buyers sign stipulate that Alpha Construction shall build a house to the “satisfaction of the buyer and the Bulawayo City Council”…. “complete with electricity, plumbing and painting to the satisfaction of the owner”.
The company, which seems to be under pressure to explain why it has not completed the project up to now, wrote to the town clerk on 29 June this year, claiming that it had completed 82 percent of the sewer reticulation system and hoped to complete the exercise by 31 July. It claimed that it had completed 95 percent of the water reticulation system and hoped to finish by 15 August.
Nothing of the sort has happened. A site visit revealed a pathetic situation where some residents, forced to live in semi-finished houses, were using other unfinished houses as toilets. The residents are getting their water from a communal tap.
In the same report to the town clerk, the company said it had completed 242 houses which were now occupied. It said 16 houses were complete but unoccupied.
It was putting final touches to 90 others. Eighteen were at roof level, 74 at wall plate level, four at windowsill level, 10 at concrete footing level, 23 had trenches excavated while 22 stands were still open ground.
Abednico Ncube, chairman of the Section 12 Residents Association, said the figures had all been cooked up. He said, while a number of houses were now complete and occupied, most had been completed by the owners after realising that the company was taking too long. He said the company had, at most, completed 40 houses only.
He personally had completed his own two-roomed house though his building society had paid Alpha Construction the full amount.
“You only need to ask yourself, why would someone leave a complete house unoccupied, if there are indeed 16 houses that are complete but unoccupied, when people are rushing to stay in unfinished houses?” he queried.
Another anomaly was that though the company admitted in its letter to the town clerk that there were encroachments on 117 stands, an internal memorandum from the council’s engineering services department dated 1 September 2004 revealed there were 225.
The Insider was unable to establish when Alpha Construction should have completed the project according to its contract with the council.
Council officials said the contract was confidential and could only be released with the permission of the town clerk, Moffat Ndlovu. Ndlovu was said to be locked in meetings.
What is even more disturbing is how house-seekers were milked and asked to pay more money than in the original agreement to have their houses built. In some cases they signed more than one agreement of sale for the same stand.
Kefasi Dube, for example, was sold stand 6911 for $95 000 in 2002. He was charged $355 000 for the construction of a four-roomed house. He had paid $520 000 by 1 October, 2002 leaving a nil balance. But on the same day he was slapped with a charge of $795 000.
Dube, who works in South Africa, signed another agreement on 4 January 2003 which now stated that the cost of construction was $1 055 000 while that of the land was $190 000. He had paid $2 780 500 by 18 March this year, but up to now construction of his house has not started.
In another case Collin Simango bought stand 6679 for $9 000 in 1998. He was supposed to pay $79 000 for the construction of a four-roomed house. According to a letter dated 16 November 2000, Simango paid off the outstanding balance of $ 9 921-50 on that date and was advised that a Bulawayo law firm was now processing his title deeds.
But he signed another agreement of sale on 15 January 2003 which stated that he was purchasing the same stand for $20 250 with the cost of construction at $68 085. His house was built but on 28 January this year, he was told that he owed the company $769 500 which he had to pay by 7 February or face eviction.
Even more disturbing however, is the fact that some stands are owned by more than one person. So far the association has discovered that seven stands are owned by two people, each.
Ncube said dual ownership could be rampant because in most cases the other buyer stayed outside Bulawayo with some working in South Africa or the United Kingdom.
He said this was quite disturbing because it implied that there was some collaboration with officials at the city council, the deeds office, Zimra and the two building societies that held the bonds, because they had to give clearance for a transfer to be effected.
There are also fears that the Bulawayo scam may just be the tip of an iceberg as Alpha Construction has allegedly been awarded contracts to develop stands and build houses in Beitbridge, Chirundu, Chivi Growth Point, Gwanda, Gweru, Plumtree and Victoria Falls.
In March this year Jonathan Gapare claimed that his company had been awarded a contract to build 10 000 houses in Angola at an estimated cost of US$550 million.