Council warned over water deal

HARARE - A councillor has warned the Harare City Council (HCC) to exercise due diligence in its proposed deal with Singapore company, Neoparagon.

The Asian company is set to partner with Harare City in the privatisation of its water department, creating Harare City Water Corporation.

Allan Markham made the observation in a full council meeting, while discussing the appointment of a board of directors for the proposed joint venture.

Markham produced two print-outs of the company’s portfolio which he had downloaded from Neoparagon’s website.

“Your Worship, is this the kind of company that we want to deal with that only has two pages on its website? It is not even giving details of the kind of work they do or any references,” Markham said.

He highlighted that the privatisation of Harare water had fizzled out from discussions, with no correspondence having been availed since the first time it emerged.

Mayor Bernard Manyenyeni, however, downplayed the concerns raised, saying CVs had been submitted to the relevant offices for consideration.

“We assure you that council did background checks on Neoparagon and there is nothing to worry about.

“More CVs should be submitted so that we have an array of people to choose from,” Manyenyeni said.

The idea to make Harare Water an independent utility emerged in August after deputy mayor Thomas Muzuva revealed to councillors that HCC will be receiving $2,9 billion funding from the Singapore firm.

He said under the agreement, Noeparagon would assist in the construction and rehabilitation of Kunzvi, Muda and Musami dams, which would provide water supplies to Harare’s growing population.

Muzuva told the meeting that from the profits realised from the new company, council would receive 30 percent for 30 years, while Neoparagon would get the remaining 70 percent.

 

Comments (7)

This is what happens when you appoint incompetent people to positions of influence. The point raised about the company's website is very valid and there is a possibility of corruption in this deal. If at all the company invests $2.9 billion into the deal how are they going to recover the money? No company invests money for nothing, they always expect huge returns and something does not feel right about this deal.

Disaster - 1 January 2015

If this Noeparagon company can raise US2.9bil why do they bother investing in Zimbabwe, in water business, when they can make better profits buying stocks in well established companies??? Wake up Councillors, you are being taken for a ride!!!

garikayi - 2 January 2015

CV are very critical in all public tenders. If the City want to create a separate entity for the water supply, due to failure to supply water a thing which may be bigger than the MDC led council, why can not they privatise everything since they are evn failing to collect refuse, build houses, develop stands. They should just privatise the entire City Council function including mayarol duties cause they are failing. Any way the MDC led concil are giving ZANU PF arsenal to attack it came 2018. Tsvangirai should wake up from slumber and advise the City fathers that council activities are supposed to be by service provision and make a contract for 5 years or even 3 and see if the winner will deliver. Failing will just creat platform for ZANU PF to laugh and scorn your party.

anania - 2 January 2015

These is a typical example of Sukuks which are asset-backed securities, not debt instruments, and they work by the investor owning a share of the asset as well as in sharing in the risk. The unique structure of Islamic bonds – known as sukuk – is particularly suited for financing big infrastructure projects like the ones our city fathers are considering. For example, if you are building a dam, the sukuk issuer gives you money to build but also owns a part of the dam, and you pay him back in the future by buying out his share (at its future value/future value of money for those who know what this means). In the meantime, he is entitled to a share of the profits. So Mr Manyenyeni be careful who is proposing what. You need to make a detailed due diligence and request a robust business case before presenting this project proposal to Councillors...please

garikayi - 2 January 2015

i think some of these people are competent but deliberately syphon money out of the country in persuite of very temporal luxuries. they don't seem to understand that there is tomorrow's generation that they could have been preparing for. i personally think we owe our children an apology for running down the country like this. we pray for true patriots to change course so we can realise a different approach to politics and perhaps transform our economy for better.

taurai - 2 January 2015

To be honest it does not make sense for the cityfathers to privatise this function and to a foreign nation for that matter. Please remove those incompetent persons from those positions of influence

concerned ratepayer - 3 January 2015

Give us one example in the world where privatisation of water has led to better supplies for all the residents of a city. This is no solution to the challenges we face - we need an efficient and transparent public enterprise free from corrupt bureaucrats and politicians.

Mike - 6 January 2015

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