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Mnangagwa's ally pockets US$54m in fresh bus deal

19 Jun 2020 at 08:26hrs | Views
PRESIDENT Emmerson Mnangagwa's adviser and Sakunda Holdings boss Kuda Tagwirei, who has been pocketing millions of dollars from dodgy state contracts, will smile all the way to the bank after making a profit of US$54 million in a fresh bus purchase agreement with the government.

Through his company Landela Investments, Tagwirei will import 500 additional buses for mass public transportation at a unit price of US$58 900 from Xiamen Golden Dragon Bus Company in China. He will then sell each bus to the government for US$212 962.

The landing cost of each bus, including transportation, duty, tax and clearing, will be US$104 147, meaning the company will make a profit exceeding 100%, at US$108 815 per bus.

In total, Landela will rake in a profit of US$54 million from the bus deal. The government will pay Tagwirei's company a total of US$106,4 million.

As first revealed by the Zimbabwe Independent, Landela recently made millions of dollars through acquiring 162 buses for the state-owned Zimbabwe United Passenger Company (Zupco) in a murky arrangement, which the government, Zupco officials and Procurement Regulatory Authority of Zimbabwe (Praz) officials failed to explain.

Landela sold each of the 162 buses it bought from Xiamen Golden Dragon Bus Company for US$212 962 despite buying at US$58 900.

Initially, government and Zupco officials falsely claimed that Zupco had directly acquired the buses on its own.

The Independent understands Landela imports the buses on credit, as the company pays a 20% deposit, with the 80% balance payable a year after delivery.

Import duty for a 64-seater bus is calculated at 61% of purchase price and shipping cost.

Landela is therefore paying duty amounting to US$37 147 per bus, at the prevailing US$1:ZW$25 interbank exchange rate. Clearing charges amount to US$5 000 per bus, thus bringing the landing price to around US$104 147 per bus. Bigger buses, however, attract duty of 10%.

The procurement procedures in the bus deal remain shrouded in secrecy as line ministries and Praz officials have distanced themselves from the opaque transaction.

Landela announced last week it will import 500 more buses to boost the mass public transportation system as the government is in the process of phasing out private commuter omnibus operators.

A Landela representative who was not named in a state media report on Sunday, said the company was using its own resources to import the buses for the government.

The company also has interests in mining. Landela is one of the companies that had its bank account frozen by the Reserve Bank of Zimbabwe in September last year for allegedly being involved in money laundering and fueling the foreign currency parallel market.

Questions have arisen as to how the company clinched the bus procurement deal without going to tender.

The buses were bought through a dealer, FAW Zimbabwe, which has offices in Harare.

All the relevant ministries in the deal told the Independent that they were not involved in the deal in which the state-run Central Mechanical and Engineering Department (CMED) had a hire-purchase agreement with Landela.

Local Government, Public Works and National Housing minister July Moyo and his Transport counterpart Joel Biggie Matiza both said their ministries were not involved in the deal.

The government has been hard-pressed to create the impression that it was directly acquiring the buses on behalf of Zupco, with Mnangagwa officiating at a vehiclecommissioning ceremony amid pomp and fanfare in Bulawayo in November last year.

At the time Landela imported the vehicles, the Civil Service Commission also acquired 20 new buses from the same supplier to boost its fleet, raising questions as to why the government decided to handpick Landela to purchase buses on behalf of Zupco.

Mnangagwa has been going around the world, and in some instances with Tagwirei, with the government boasting he struck various deals including bus purchase agreements in China and Belarus but the transactions are shrouded in controversy.

The buses imported by Landela were reported by state media to be part of a consignment of 1 000 vehicles ordered from China and 500 from Belarus.

Tagwirei, who has been expanding his empire and enjoys close relations with both Mnangagwa and Vice-President Constantino Chiwenga, also has dealings with the military and government officials. Chiwenga's estranged wife Marry revealed in a High Court affidavit that Tagwirei bought the vice-president expensive luxury cars.

Tagwirei's flagship company, Sakunda Holdings, has been involved in controversial projects, including Command Agriculture, under which the company failed to account for about US$3 billion in public funds, according to Auditor-General Mildred Chiri's 2018 audit report. The company was also awarded the Dema Emergency Power Plant project without going to tender, after an experienced United States company, which had won the tender, was corruptly muscled out.

Source - the independent
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