Energy Minister Samuel Undenge has admitted that rules were not followed in the payment of a $5 million advance to controversial firm Intratrek, but still insisted that the payout would not result in the loss of public funds.
Undenge is under pressure to explain an unsecured advance of $5 million by the Zimbabwe Power Company (ZPC), the energy infrastructure subsidiary of power utility ZESA Holdings, to Intratrek, a company fronted in Zimbabwe by Wicknell Chivayo.
The payment was purportedly for preparatory work on the 100MW Gwanda solar plant, one of several power contracts that Intratrek has been awarded by the government.
In a statement today, Undenge said ZPC had “erred” in awarding Intratrek the $5million without following procedure.
“It is true that each time public funds are advanced to service providers, there is a risk that the goods or service, as the case may be, may not be delivered. To mitigate against this risk, it is as a standard requirement that a bank guarantee is secured against possible failure to deliver. Such an inevitable requirement should have been considered in the case of a $5m advance payment to Intratrek by the ZPC,” Undenge said.
He said he had now met ZPC to ensure that “going forward, the relevant procedures and requirements shall be adhered to”.
However, while Undenge admitted that rules were not followed, he defended the payment, saying it would not prejudice ZPC in any way.
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