The Bulawayo City Council has terminated its contract with Alpha Construction, under which the company was supposed to service over 500 stands and build houses in Cowdray Park, and is now taking “corrective measures” to ensure that those who bought stands are not prejudiced.
The town clerk, Moffat Ndlovu, confirmed the cancellation of the contract on Tuesday but said modalities about what the council was going to do to rectify the situation were still being worked out.
Though the story about the scam first appeared on October 14, it has now emerged that the council had already decided to cancel the contract with Alpha at its full council meeting on October 6.
The councillor for the area, Stars Mathe, said she was going to brief residents about steps the council was going to take on Saturday morning (October 23).
Apart from cancelling the contract, she said she was going to make sure that Alpha Construction would compensate all those who had paid for construction of houses which had not been built.
Alpha Construction is owned by Jonathan Gapare who is campaigning in Chivi South, which is currently represented by Charles Majange.
Ndlovu said Alpha Construction should have been notified about council’s decision by now. He said the council’s aim was to make sure those who had bought stands from the company “got value for their money”.
Alpha Construction was awarded the contract eight years ago but up to now it says it has only completed 242 houses. Residents, however, dispute this figure saying they completed most of the houses on their own after realising that the company was taking too long. They say the company completed at most 40 houses only.
The company has not built more than 60 houses that buyers have already paid for, though in some cases buyers have paid up to six times the amount originally agreed to, after Alpha cited escalating construction costs.
Some of the completed houses were allocated to more than one person with at least two houses being legally owned by two people each.
The council has been aware of this double allocation for some time.
According to an internal memorandum from the engineering services department to the town clerk, the chamber secretary, the director of health services and the director of housing and community services dated 19 February 2003, there was rampant staff turnover at Alpha Construction. This gave newcomers the excuse that they were not part of previous mistakes, when the council pointed out mistakes to them.
“It would seem that the developer allows beneficiaries to occupy houses meant for others,” the memo said. “The most vocal take up residence in finished houses while waiting for their own houses to be fully developed before moving in.”
Two buyers are suing the company for $100 million for houses they paid for but were not built.
The company reportedly owes two major banks about $3 billion.
Though the council has pledged to salvage the project, Ndlovu admitted that this was going to be a costly exercise because Alpha had “totally messed up the job” and had not adhered to the terms of its contract.
Under the contract, the company was supposed to provide roads, water and sewerage reticulation and then build houses. But it did not do so. Most of the roads are “bush” roads and the company built some houses without providing water and sewerage.
It also wrongly sited 225 houses which are now encroaching onto the next stand and may have to be demolished. Ndlovu said the alternative may be to have the area resurveyed but houses that are blocking service lanes would have to be demolished.
In an effort to explain why the council had allowed such a travesty to go on, Ndlovu said the Cowdray Park housing scheme was started as a public/private sector programme with funds from the United States Agency for International Development.
The council was to provide infrastructure leading up to the suburb while private contractors were to service stands and build houses. Alpha was one of the first companies to be awarded a contract as part of the council’s efforts to promote locals. But it never followed the laid down procedures.
“We were only playing an advisory role, but now we have to take over and take corrective measures. Our aim was to promote indigenous business people but we did not expect such a shoddy job,” Ndlovu said.
He said Alpha had even issued forged certificates of occupation, which should have been issued by the council.
Alpha is reported to have been awarded contracts to service stands and build houses in Beitbridge, Chirundu, Chivi Growth Point, Gwanda, Gweru, Plumtree and Victoria Falls.
There are fears that it could have used the same modus operandi it used in Bulawayo in the other towns.