Zimbabwe Parliament report on ZINARA 2017-2018 audit- Part 3

99 On 19th November 2012, ZINARA entered into a contract with Univern for the supply of forty (40) motor graders.

100 The agreement between ZINARA and Univern for the supply and delivery of forty (40 motor graders was signed on 19 November 2012. Mr. Frank Chitukutuku the ZINARA CEO signed on behalf of ZINARA, witnessed by Mr. Kaschula and Mr. Kassim. Mr. Kasere signed on behalf of Univern with Mr. P. Murove strangely signing as a witness for Univern.

101 The tender documents issued by the State Procurement Board provided for the following material terms:

• the goods would be delivered within eight (8) weeks;
• the purchase price would be paid within seven (7) days from the date of delivery;
• delay of the delivery of the product would result in a penalty fee of 1% of the total cost of the contract, per week up to a maximum of six weeks, upon which the contract would be cancelled.

102 Contrary to the above ZINARA and Univern signed a contract that in Clause 7(4) provided that 30% of the total purchase price, in the sum of USD $2 412 240 would be paid up front.

103 The Committee was greatly concerned by this agreement. Firstly, the agreement was clearly a variation of the tender conditions set and defined by the SPB. Secondly, it lacked any provisions to protect ZINARA. Missing provisions found in any standard capital expenditure (Capex) agreement included the following:

• Warranties by the supplier in respect of the fitness of the product sold;
• Delivery frameworks including termination provisions in the event of the supplier’s default; and
• Penalty clauses for delayed or defective performance.

104 On the contrary, the agreement protected and covered Univern and in fact anticipated Univern’s breach in two material respects. These were:

• The obligation on warranties was anticipated by clause 4 of the agreement which provided that the parties would sign a service level agreement notwithstanding that the graders to be supplied were supposed to be new; and
• Delay in delivery was anticipated by clause 8 of the agreement which had a generous definition of forcemajeure.

Continued next page

(130 VIEWS)