Transport minister Biggie Matiza is reportedly manoeuvring to smuggle through the backdoor a Dubai-based firm into the US$400 million National Railways of Zimbabwe (NRZ) recapitalisation deal, despite the company having failed to meet requirements of the bidding process, the Zimbabwe Independent can reveal.
This comes after the consortium which ultimately won the bid to turn around moribund NRZ — the Diaspora Infrastructure Development Group (DIDG) — appointed the African Import and Export Bank (Afreximbank) as the mandated lead arranger into the multi-million-dollar deal that is now being assessed by Treasury pending approval for implementation to start.
A meeting between Treasury and other stakeholders in the deal is in the offing.
As reported by the Independent on May 17, Matiza, colluding with some top ministry officials, is battling to muscle out DIDG for a preferred partner, Feonirich Investments LLC, which is Dubai-based.
During that time, Matiza, seeking to derail DIDG’s project, misled parliament that the consortium had failed to mobilise the US$400 million required to revive the embattled local rail operator. This was despite him having received funding indicative term sheets as part of DIDG’s proposal from various banks which were waiting in the wings with over US$1 billion to roll out the project.
With Afrexim Bank now on board, Treasury is currently reviewing its proposal to inject US$100 million as well as mobilise funding from a number of regional banks in order to roll out the NRZ revival project.
The bid to sabotage the multi-million-dollar deal, sources said, is being orchestrated by Matiza and a syndicate that involves NRZ company secretary Misheck Matanhire and some legislators who sit on the transport portfolio committee.
“Matiza is clandestinely mobilising members of parliament and relevant portfolio committee members into a plot to undermine the project. A number of legislators have been approached to lobby against DIDG transaction, which is backed by Afrexim Bank, in support of an obscure proposal tabled by a Nigerian ‘Prince’ based in Dubai, a source said. “However, speaking with several government officials privy to the transaction, their view is that these detractors are trivialising the role and importance of the Zimbabwean diaspora investors and Afreximbank. They forget on average, Zimbabweans in the diaspora remit US$3 billion annually, while Afrexim has funded transactions well over US$1,5 billion for Zimbabwe.”
Documents seen by the Independent show that Feonirich Investments LLC, domiciled in Dubai, whose interests are reportedly being promoted by Matiza, has since 2017 been trying to claw its way back into the deal which is now in its decisive phases.
As shown by the documents, Feonirich, having failed to fulfill the bidding requirements, appealed to the State Procurement Board (SPB), now the Procurement Authority of Zimbabwe (Praz), seeking to be readmitted into the tendering process which had since been concluded, but failed.
The correspondence to SPB, which was also sent to the Chief Secretary to President and Cabinet Misheck Sibanda, former Transport minister Joram Gumbo, then NRZ board chairperson Larry Mavhima and general manager Lewis Mukwada, is dated July 4, 2017.
“We, management board of Feonirich Investments LLC, UAE, hereby write to appeal the position of the officials of the State Procurement Board in charge of the collection of the tender bid proposal from the prospective bidders.
We had participated in all the processes anticipated and stipulated by NRZ and State Procurement Board,” wrote the firm’s chief executive officer, Prince Adebayo.
“But to our greatest displeasure and surprise, our mandated officer in Zimbabwe and the UAE Staff who went to submit the tender bid proposal were surprised that the SPB office in charge of receiving the tender proposal’s door was already closed just before 10am on the 4th of July 2017. We hereby appeal to the relevant authorities and officials to reconsider our submission of the proposal citing the above narrated reasons.”
In related correspondence to the SPB, Noor Bank, also based in Dubai and acting as guarantor of Feonirich, committed itself, through a bid guarantee bond, to pay the US$50 000 tender fee for the NRZ recapitalisation deal. Having failed to get a favourable response from Praz, Feonirich wrote on July 6, 2017 to Gumbo, pleading to be allowed to submit their tender proposal document for the NRZ recapitalisation project.
Apart from early closing times, it also blamed a malfunctioning lift for failing to meet the deadline.
“In reference to our letter of appeal issued to State Procurement Board dated 4 July 2017, we, management board of Feonirich Investments LLC, UAE, hereby wish to rewrite a follow up appeal letter to the Minister of Transport and Infrastructure Development to plead for reconsideration of the position of the officials of the State Procurement Board in charge of the collection of the tender bid proposal from the prospective bidders,” it said. “We hereby appeal to the relevant authorities and officials to reconsider our submission of the proposal citing the above narrated reasons. We would appreciate your help in affording us the chance to participate in this bid.”
Matiza is understood to be sympathetic to the persistent Dubai firm and is working around the clock to bring them on board despite its dodgy bid.
Contacted for comment, Matiza said he was about to attend a meeting. At the time of going to print, he had not responded to questions sent to him.
NRZ board chairperson Martin Dinha also did not respond to enquiries sent to him. He could not be reached on his mobile phone.
Matanhire did not answer his phone, but requested for questions to be sent to him through text. He, however, still did not respond to queries.
In its untested bid which was not considered in the tender process, Feonirich sought to revamp Zimbabwe’s rail network in three phases over a 13-year period.
The Dubai-based firm proposed to undertake “vital/emergency repairs over a period of four years, restoring the capacity of permanent way and structure in three (3) years and replacing ageing track materials over six (6) years”.
However, efforts by Feonirich to wriggle its way into the deal appear dead in the water, given the tremendous progress that the NRZ and DIDG have made, with Treasury expected to give the approval for implementation of the project to commence.
Last month, the NRZ board approved the DIDG project proposal following the appointment of Afrexim as the mandated lead arranger, with the coordinating role of mobilising funding for the project.
Under the DIDG proposal, a number of banks have expressed interest to finance the project, mobilising among themselves over US$1 billion to return NRZ to viability.
Sources said Matiza has also been pressuring the NRZ board to meet and reverse its resolutions to create room for Feonirich.
“The minister has been pushing and pressuring the board to meet and change its position and resolutions on the current project to accommodate his preffered failed bidders. He wants the baord to reverse its recent critical resolutions, but that is being resisted. The board was supposed to be forced to meet today or on Monday, but its members are getting impatient and annoyed by the minister’s actions,” a government source said.
The project, which has also been delayed by protracted legal and technical negotiations, sits at the centre of President Emmerson Mnangagwa’s efforts to breathe life into the country’s comatose economy.