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NATIONAL ASSEMBLY HANSARD - 15 MARCH 2012 VOL. 38 NO. 28

Tuesday, 20th March, 2012.

The House of Assembly met at a Quarter-past Two O'clock p.m.

 

PRAYERS

(MR. SPEAKER in the Chair)

MOTION

BUSINESS OF THE HOUSE

MR. GONESE : I move that Orders of the Day, Numbers 1and 2 be stood over until the rest of the Orders of the Day have been disposed of.

MS. D. SIBANDA: I second.

Motion put and agreed to.

MOTION

PRESIDENTIAL SPEECH: DEBATE ON ADDRESS

Third Order read: Adjourned debate on motion in reply to the Presidential Speech.

Question again proposed.

MR. GONESE : I move that the debate do now adjourn.

MS. D. SIBANDA: I second.

Motion put and agreed to.

Debate to resume: Wednesday, 21st March, 2012.

MOTION

REPORT OF THE COMMITTEE ON PUBLIC ACCOUNTS ON THE REPORT OF THE COMPTROLLER AND AUDITOR GENERAL ON THE MANAGEMENT OF GOVERNMENT VEHICLES BY CMED (PVT) LTD

MR. CHINYADZA : I move the motion standing in my name that this House takes note of the First Report of the Committee on Public Accounts on the Report of the Comptroller and Auditor-General on the Management of Government Vehicles by CMED (Pvt) Ltd.

MR. SANSOLE: I second.

MR. CHINYADZA:

1. INTRODUCTION

In fulfillment of its oversight function, the Public Accounts Committee (PAC) examined the Report of the Comptroller and Auditor General (C and A G) on the Management of Government Vehicles by the Central Mechanical and Equipment Department (CMED). The Audit Report covered the period spanning 2004 to April 2009. It is important to note that this is the period when the country was going through major economic challenges never experienced since the country attained its independence in 1980. The Report was brought to Parliament in 2010 but it could not be tabled as the enabling legislation, the Audit Office Act of 2010 was still to be operationalised. When the Report was eventually tabled following the operationalisation of the Act on 1 st April 2011, the Third Session of the Seventh Parliament was coming to the end, hence the tabling of the Committee's Report now.

2. OBJECTIVES

The following are the objectives of this report:

· To provide an in-depth analysis of the C and AG's audit findings and identify underlying causes of the issues raised

· To extract the strategic implications of the audit findings on the operations of CMED

· To recommend appropriate actions to eliminate or minimize inappropriate management of resources under CMED in order to ensure that the operations of the company become viable.

3. METHODOLOGY

Upon tabling of the Audit Report, the Committee considered a Memorandum from the Office of the C and AG. The Memorandum summarizes the audit findings. Parliament of Zimbabwe, in collaboration with the Southern African Parliamentary Support Trust (SAPST) and Public Accountants and Auditors Board (PAAB), organized a workshop on the analysis the CMED Audit Report. This was meant to broaden Members' understanding of issues raised in the Report. The Committee received oral evidence from the CMED Board of Directors and Management and deliberated on oral and written evidence received. The Committee came up with findings, observations and recommendations as outlined in subsequent sections of this report.

4. CMED BACKGROUND

CMED is a commercial entity which came into being following the promulgation of the CMED (Commercialisation) Act in the year 2000. Below is the mandate of the company as given in the Act:

a. To provide and operate transport services

b. To provide plant and equipment for the construction of roads, dams, bridges and other infrastructure

c. To perform any other function set out in its memorandum of association.

The Act underscores the need for the entity to give priority to serving the needs of the State. However the Act is explicit that this should be done ' to the extent that it is compatible with sound business practice to do so'.

The C and AG conducted a value for money audit following complaints from user Ministries and departments that the entity was failing to meet their transport requirements.

5. FINDINGS and observations

5.1 Acquisition of Vehicles for Ministries

5.1.1 The Audit found that acquisition of vehicles by CMED was based on plans as stated in their Turnaround Recapitalization Plans for the period 2004 to 2008. Out of a total of 2 895 vehicles planned for purchase during the period 2004 to April 2009, only 679 vehicles, which constitutes 23%, were purchased. CMED attributed its failure to meet targets to late release of funds and delays in settlement of bills by user ministries and departments. At the time of the Audit, an analysis of the organisation's financial statements for years 2004 to 2008 revealed that in any of those years more than 50% of its current assets were tied up in debtors as follows: 78% in 2004, 64% in 2005, 56% in 2006, 78% in 2007 and 88% in 2008. As at 31 August 2011, records show the organization's debtors stands at $8 000 000. Under such circumstances, it is not surprising that any efforts by the organization to recapitalize are seriously limited. As a result, CMED has been operating with an aged fleet which had far exceeded its lifespan. For instance, the Audit revealed that the majority of its heavy vehicles have reached an average age of 19 years. Under normal circumstances the lifespan for these vehicles is 10 years. The light vehicles have reached an average age of 10 years when the normal lifespan is five years. It is common knowledge that such a fleet is very costly to maintain as breakdowns become frequent.

5.1.2 In the Auditor's view, CMED as a commercial entity was failing to manage its debtors well and lacked an aggressive debtor's collection approach. It is of interest to note that Ministries and Government Departments are not living up to the demands of cash budgeting system as espoused in National Budget Statements since 2009. A debtor's analysis by age submitted to the Committee by CMED revealed that Ministries' debts to CMED were ranging from one to three months old. On the other hand, CMED as a commercial entity is not operating on sound business ethos as it continues to render services to Ministries and Government departments regardless of non payment for such services. The Committee noted with concern that 10 years after commercialization CMED has failed to transform itself from a government department into a private company that runs on business lines. It continues to look up to Government for recapitalization

5.2 Purchase and Distribution of Vehicles to Ministries

5.2.1 During the Audit process it was established that CMED did not have a clear formula or distribution policy for permanent and temporary issue vehicles to Ministries and Government Departments. Of the 679 vehicles purchased between 2004 and 2009, some Ministries got more vehicles than others. For instance Local Government received 56, Parliament 32 and 87 back up pool VIP vehicles while some Ministries got just one vehicle. In the absence of a clear distribution policy and adequate record keeping, auditors could not make a fair assessment as to whether there was equitable distribution of vehicles.

5.2.2 CMED indicated to the Committee that it was not able to meet Ministry requirements due to failure by Treasury to allocate funds as per Ministries' bids. Under the circumstances, some Ministries requested and got funding for their vehicles from Treasury and purchase vehicles without involving CMED. For instance, during the audited period, auditors observed that 26 Ministries purchased 405 vehicles and the Public Service Commission purchased 25 Faw buses. It was observed that such purchases by Ministries without the involvement of CMED presents some challenges on the latter as usually such purchases are done without backup spare parts. On the other hand Ministries have no choice but to do this independently as they spend long periods without vehicles to carry out government programmes.

5.3. Repairs of Vehicles at District and Provincial Workshops

5.3.1 CMED has a schedule of repairs which stipulates that major repairs should be dealt with within 48 hours, minor repairs within a day, starter repairs within 48 hours, engine overhaul within 48 hours and gear box repairs within 16 hours. It was observed that of the 3 490 vehicles brought into the workshops during the audited period, 1 458 which constitutes 42% exceeded the target of 48 hours. Some had been in the workshops for periods ranging between one and eight years. For district workshops, 907 vehicles were brought for repairs and 325 which represent 36% exceeded the 48 hours target. At the district workshops, vehicles brought in for repairs spent periods ranging from a couple of months to eight years as is the case at provincial workshops.

5.3.2 The auditors attributed delays in repairs to shortages of spare parts and cannibalization. For instance, of the 3 490 vehicles analysed from provincial workshops progress reports, 1 047 could not be repaired due to non availability of spare parts. In its response to audit observations, CMED concurred with auditors that they were experiencing shortages in spare parts availability during the audited period. Regarding cannibalization, they argued that when the country was experiencing hyperinflation, spare parts were scarce and were being cannibalized from accident damaged vehicles. CMED informed the Committee that such haphazard cannibalization has since been addressed and that at CMED they have since instituted a system which allows an audit trail of the cannibalized vehicle and all cannibalization has to be authorized by the Managing Director.

5.4. Record Keeping

5.4.1 The Audit revealed that CMED does not maintain an up to date master asset register for its fleet. This is shown by the incomplete fleet register availed to auditors during the audit process. As a result, auditors were not able to ascertain the 1 200 vehicles which management claimed to be the total fleet. Of concern were some 19 vehicles claimed to have been transferred from the Head Office to Harare Province and yet the recipient had no record of such vehicles. Another incident was 15 Mahindras which were issued without following proper procedures and could not be traced to user Ministries. At Chinhoyi provincial office files for 63 light vehicles and 27 heavy vehicles were not availed for inspection by auditors and for those availed for inspection there were no job cards for the entire audited period 2004 t0 2009. Mutare provincial workshop had vehicles in the districts that were not recorded in the provincial fleet list. Twelve vehicles did not have repair requisition service sheets, 76 out of 165 vehicles had no engine numbers, 44 no chassis numbers and 34 no purchase dates and the expected disposal years. CMED conceded to observations raised and promised to take reasonable steps to update fleet lists both manually and electronically through the activation of the paste Asset Module System.

5.4.2 The state of affairs in respect of records keeping is open to abuse and there is a high risk of losing assets. Despite the glaring cases raised, CMED in its written submission to the Committee responding to audit observations argues that, it always maintain a manual asset register at Head Office and that it has always been availed to external auditors. However, the C and A G informed the Committee that the records availed to auditors were incomplete. Regarding the Mahindra vehicles CMED indicated that they were dispatched with SP 3 forms (vehicle issue of movement vouchers) to different provinces and later on recalled and redistributed. Records of Ministries that received those vehicles were said to be with Area Offices.

5.5. Stores Management

The Audit revealed that districts and provincial stores were operating without spare parts in stores and were no longer maintaining reorder levels. Evidence presented to auditors revealed that spare parts were not reaching the district workshops. There was also a reported incident of theft at Nyanga district workshop but the officer responsible was then transferred to Mutare provincial office. In a written response to the Committee, CMED indicated that reorder levels were set and minimum stocks were being regularly checked. It further highlighted that half year stock counts carried out in 2011 showed that sound inventory management practice is now in place.

5.6. Redundant Spare Parts

A visit to provincial and district workshops by the Auditors revealed that there were a lot of redundant spare parts in stores as some spares were last issued 10 years back. CMED indicated that districts and provincial workshops had been instructed to move redundant stocks to Central stores for disposal and since 2009 to hold at least two public auctions each year at the Central Stores Depot. CMED also indicated that spares for vehicles which were phased out have since been disposed of.

5.7. Weak governance of CMED

5.7.1 Leadership of CMED/Board Issues

When CMED was commercialised, there was no practical change in the vision and culture to reflect the new thrust. The appointment of the Board should also reflect the new culture in terms of membership. There was no concerted effort to introduce commercial mindset in the organization. Oral evidence given revealed that when the term of the previous Board expired, there were no immediate appointments made to replace it, resulting in CMED operating for over 3 years without a Board of directors. The CMED Act itself is silent concerning Board issues. This is considered a serious omission as the Board is a key driver for the success of any organization.

5.7.2 Policies and Procedures

The C and AG's report shows that laid down policies and procedures were being violated in the period covered by the audit. This is evidenced by the following;

· cannibalization of assets without the necessary approvals

· engine swaps

· incomplete recording of company assets in the asset register

· incomplete recording of bin cards upon issuing of spares and

· non performance of daily reconciliation of bin cards among others.

The reports on hand give no indication of action taken on staff responsible for departments that violated operational procedures.

5.7.3 Performance Management Culture

The documents reviewed give an indication of an embedded poor performance management culture at CMED. This could be one of the reasons for the deterioration in the quality of service provision and in the internal control breakdowns as evidenced by the various observations made by the C & AG.

5.7.4 Internal Organizational Capacity at CMED

The observations raised by C & AG on the non effective internal controls environment at CMED and the poor profitability indicate that there could be serious capacity flaws around the major operational areas at CMED.

6. GENERAL OBSERVATIONS AND RECOMMEDATIONS

6.1 Distribution of Vehicles on Hire to User Ministries and Departments

As established in the Audit Report, there is currently no policy on distribution of vehicles on hire to user Ministries and Departments. In view of the inadequate purchases and depleted fleet which no longer meet the requirements of service consumers, CMED should develop a distribution policy which ensures equitable distribution while at the same time considering individual users' requirements.

This needs to be addressed at Board level. Once CMED Board has agreed on the proportion of the business portfolio to be dedicated to servicing Government departments, proper policies and a modus operandi should be put in place to ensure efficiency and transparency in servicing these departments. Above all, CMED should provide vehicles on hire to ministries on commercial basis.

6.2 Recapitalization of CMED

The Committee established that CMED is failing to fulfill its mandate due to limited support from government for recapitalization. It observed that CMED's operations could be compromised by Government's positions as both shareholder and client. The Committee noted that CMED could raise additional financial resources for its operations by disposing of vehicles which cannot be repaired currently lying in its yards. Government can also offload some of its shares to allow a corporate partner on board for capital injection. It is important to note that CMED itself has a responsibility to develop a viable business model that enables it to make profit and to raise its own internal capital for its own investment program. CMED Board needs to develop a robust business model to run a viable operation. Government should only assist to the extent of liquidating the amounts owed by government departments to CMED. CMED should have a management accounting function to bring an understanding of the costs of service provision requirements. This will help CMED review its service pricing model and charge economic rates

6.3 Coordinated Purchase of Government Vehicles

Before commercialization, CMED was a government department that served to procure and distribute equipment and vehicles to Government Ministries and provide the associated support services. After commercialization, the company became a private limited entity but wholly owned by Government. Its mandate as given in the Act was redefined as the provision and operation of transport services, the provision of plant and equipment for the construction of roads, dams, bridges and other infrastructure, as well as the performance of any other function set out in its memorandum of association. In all this the company was mandated to give priority to serving the needs of the State, in as far as it is compatible with 'sound business practice to do so'.

The operations of CMED at the time of the audit and indeed to date do not reflect the new mandate but reflect rather a carry over of the old mandate. The C&AG's report and the oral evidence show that the profitably of CMED went down from USD 6 million in 2009 to USD 288 thousand in 2011. CMED still views itself as the primary provider of Government vehicles and related services and it has not fully evolved into the commercial transport services provider to industry in general which, the Act mandates it to be. Being a commercial operator the following is necessary;

· CMED needs to price its services competitively in order to make it worthwhile for government departments to do business with this new commercial entity.

· Government departments need to spend the limited government voted funds in a prudent manner and should continue to be allowed to procure transport services guided by the principles of economy, efficiency and effectiveness.

6.4 Non Payment for Hiring Services by User Ministries and Departments

The Committee observed that Ministries and Departments are failing to honour debts owed to CMED. Ministries should spend within budgetary limits and CMED should operate on the basis of the necessary normal business credit terms and conditions

6.5 Delays in Repairs at CMED Workshops.

The CMED attributed unreasonable delays to inadequate spare parts, human and financial resources especially at workshops in the districts. The Committee is of the view that district workshops are ideal but strongly recommends that their continued existence should be on the basis of the level of business at those workshops. With the advent of the multi-currency regime, CMED is no longer constrained by foreign currency shortages but by its own working capital and other internal capital limitations. These can be addressed through the recapitalization of CMED and through robust internal working capital management strategies which should ensure timely availability of spares and related requirements. This is a management and Board responsibility.

The existing pool of spares that are now obsolete should be disposed of. Furthermore, old and outdated equipment and vehicles which have been in the workshops for years should be disposed of as well.

6.6 Cannibalisation of Damaged Vehicles

The Committee acknowledged improvements made in addressing the problem of uncontrolled cannibalisation which was rampant at the time of audit and emphasizes the need for strict adherence to the cannibalization policy which was promulgated in October 2011.

 

6.7 Poor Record Keeping

The Committee noted with concern the absence of updated and maintained fleet registers and strongly recommended the need for developing an up to date and well maintained asset register for CMED fleet and Conditions of Service vehicles.

6.8 Management of Spare Parts

The Committee noted generally poor stock management systems. The Committee recommends that CMED should put in place a system to ensure proper management of stocks of spare parts.

CMED indicated that the stock management processes are now computerized. We recommend that the system be reviewed to ensure that adequate controls are embedded in the system. For example, segregation of the following responsibilities - amendment, approval, capturing, posting and reconciliation of entries into the system. Without these necessary controls, the control environment will be weak and prone to abuse. Reconciliations are an important control measure to inform management that transactions conducted daily are accurately recorded and records are properly updated hence should be conducted daily.

6.9 Non Payment of Debts by User Ministries

The Committee noted with concern that CMED was failing to effectively discharge its mandate due to non payment for services rendered to government ministries. The Committee strongly believes that payments by the Ministries and departments would enable CMED to recapitalize given Government financial challenges which currently do not allow it to inject fresh capital into the entity. Working capital management is critical to CMED operations and it is imperative the CMED management comes up with a debt management policy in order to provide a framework for timely processing and recovery of owing monies. This policy should be approved by the Board and should be implemented on the ground transparently.

6.10. Governance Issues at CMED

6.10.1. Board Composition

The Committee noted from the documents submitted and the oral evidence given that a material proportion of the Board members for CMED are from government departments and that after the initial Board term expired the CMED was without a Board for more than 3 years. Best practice is particular about board composition in order to ensure meaningful contribution by individual board members, member independence and good judgment in decision making. The Committee recommends that the qualifications and relevant experience of the members should be varied in order to ensure adequate oversight over all dimensions of the operations of the CMED. For CMED, expertise in finance, Engineering, logistics, IT, law and human resources should at a minimum be included in the board. These are critical issues which, if addressed, would enhance the oversight of the operations of CMED by ensuring right appointments, strategic planning and translating strategy into budgets as well as review and enforcement of policies and procedures. Best practice requires that the board should be reviewed at an annual general meeting during which membership can be reconstituted subject to board performance review and individual Board member performance review.

6.10.2. General Internal Control at CMED

The Committee noted that the observations raised by the auditors point to serious internal controls problems at the CMED. An effective internal audit or compliance function would have picked the anomalies and alerted the board in time to ensure that policies and procedures are adhered to. Bin cards should be reconciled daily and signed accordingly as evidence of reconciliation. Asset registers should be reviewed annually and as and when new assets are procured or old ones are disposed to ensure completeness and accuracy of asset information.

The internal audit or compliance function should deliver its mandate and produce periodic reports on the status of the control environment and the necessary recommendations to strengthen the control environment. It is recommended to do the following;

® strengthen the Internal Audit function and subject it to regular Board review.

® Ensure that the Board approves standard operating procedures for CMED operational divisions and put in place enforcement and monitoring systems.

® Put in place penalties for wanton violation of approved procedures.

6.10.3. Performance Management

The problems relating to performance failures at CMED, for example, fall in profitability point to possible lack of a functional or effective performance management system at CMED.

CMED needs to have an embedded performance management culture and processes that not only track performance and compare it to set targets but also ensure that corrective interventions are put in place and that that corporate strategies and plans are properly executed. Performance management should be implemented at corporate level as well as at divisional and individual employee level For performance management to be properly implemented CMED should be guided by a medium to long term strategic plan developed to cover all the operational areas of the company. An effective Board would review the performance of both the executive management and the internal auditors on a monthly, quarterly and annual basis. The Board would review the performance against its own set plans and targets. As part of embracing new philosophy in terms of reporting to shareholders, the Board should institutionalize Annual General Meetings (AGMs) where it presents audited accounts

 

6.10.4. Internal Organisational Capacity at CMED

The issues alluded to above raise questions of capacity issues at the CMED. In order to mitigate the risk of shareholder value erosion due to poor controls, we recommend an organizational capacity assessment of CMED to help detailed identification and closure of the existing capacity gaps at all levels of the company. Areas to be addressed will include Board performance, policies and procedures for all departments, the overall governance structure covering procurement, human resources, and internal audit, among others. Without this exercise, recapitalization on its own may not be able to turn around the company to be self sustaining and profitable.

7. CONCLUSION

The analysis of the report of the C and AG, the oral evidence presented to Parliament and the other supporting documents show that there are serious role, viability and internal governance issues at the CMED. While there is scope and great potential for CMED to operate profitably and become a self-sustaining entity, a robust strategy and business model premised on the correct understanding of the mandate of the company and a deliberate re-definition of relationship to the shareholder, will unlock the potential for CMED to grow and compete commercially in the market as well as provide a better service to its clients.

MR. SANSOLE: I would like to add my voice in support of what my Chairman has just presented. I am not going to dwell on the objectives of the audit and the procedures that were followed, but simply to comment on the audit findings and to look at whether CMED did perform in terms of the CMED Act, and to look at corporate governance issues.

The company CMED Private Limited as the name implies, is a private company which came from the commercialisation of CMED, which was previously a parastatal. It is important that it should perform in terms of laid down business practices. Whilst CMED is mandated to provide its services and give priority to Government, that does not restrict the provision of services to Government departments only. What it means is that CMED, in providing services to its customers, should give preference to Government. There is therefore a strong need for CMED to transform itself from being a parastatal that it was, to a company operating along these lines. Therefore, there is need for a paradigm shift from the laissez faire attitude or mode of operation to a more serious business enterprise.

Since CMED was commercialised, it is still expected to supply vehicles and equipment to Government departments and to the market in general. It is also expected to provide vehicle support services to Government departments along commercial lines. One of its major functions is also to sell fuel and oils to motorists in industry on a commercial basis. What this means is that services provided by CMED must be paid for. The customers who receive or consume those services must pay for the services and that includes the Government. It is disappointing that during the period that the audit covers, CMED continued to operate as if it was still a parastatal providing services to Government departments and not following up on payments. The operations of CMED as the Chairman has already pointed out Mr. Speaker, do not reflect the new order, that is, the transition from a parastatal to a company. As a result of failure to adopt its new mandate, CMED profits went down from US$6 million in 2009 to US$288 000 in 2011. That is a major decline in profitability.

The audit also reveals that there is need to overhaul CMED human resources and management policies. Government departments want to continue enjoying the services of CMED to this date without paying. There is nothing for nothing, we all know that only sunshine is for free. CMED must craft policies which ensure that those who do not pay for services, do not get them. The same applies to any Government enterprise, if you do not pay for services, supply is discontinued. CMED should aggressively market its products and services if they are to get more customers from the private sector who have the capacity to pay. CMED must also give a schedule of Government departments who are in arrears to the Ministry of Finance in order that those debts which are outstanding for long periods can be liquidated by way of special budget allocations. CMED must be competitive and Government departments must also have the latitude to seek services elsewhere and not to be restricted to CMED. Government departments can seek services from the likes of Dulys, AMTEC and so forth. The leadership of CMED does not reflect the commercialisation thrust. The board as the Chairman has already alluded to, the qualifications that will be required for members of the board and the need to constantly review the composition of the board. This has not been happening at AGM as it should happen. There is also a complete lack of internal controls, which manifests itself in the cannibalisation of vehicles. I mean where you have a vehicle that has been lying for long periods unrepaired and has its parts removed to repair another vehicle without authorisation. Where cannibalisation of vehicles occurs, there has to be authorisation. This shows that there is accountability for all vehicles that are under CMED's care.

Mr. Speaker, the audit also revealed that there was lack of review of performance of the executive management and internal auditors against set objectives and targets. The diminishing profitability of CMED is indicative of malfunctioning costing system. There is also a strong argument that CMED is failing to provide its services or to perform because of lack of financial support from Government, but any financial support from Government must be supported by strategic plan which shows the path that CMED has set itself to follow in order to turn around its fortunes. This has not been happening which means that Government can not continue throwing money into a bottomless pit. As CMED, the board must develop a viable business model that can be supported.

There is also an argument that it is not adequately capitalised; but any request for working capital especially to do with replacement of spares or acquisition of stocks of spares, must be supported by a strategic plan. Recapitalisation or shortage of spares is a working capital problem, which CMED continues to face up to this day. If CMED set itself on a profitable path, we would not have problems that are to do with the distribution of vehicles that ministries are complaining about and the lack of repairs to vehicles and vehicles staying at CMED Depots throughout the country for long periods unrepaired. That is because of the absence of a proper business model. In conclusion Mr. Speaker, I would like to say that the audit revealed that with proper management and business model based on correct understanding of its mandate, CMED can transform itself into a viable organisation. I thank you Mr. Speaker.

MR. DZIRUTWE: Thank you Mr. Speaker, mine is going to be very brief. Pertaining to issues of CMED, its mandate is very clear. Somehow the institution has allowed its mandate to be eroded by other ministries for what I believe are selfish reasons by those ministries. As an institution that was meant to take care of transport requirements for Government departments, it is very odd that if we drive around the various departments in Harare, you find all sorts of vehicles broken down. All the ministries have got their vehicles parked there. When I got around to inquiring what was going on, it looks like those ministries have accused CMED of incompetence. If you look deeper, you find that may be these ministries, for selfish reasons wanted to purchase their own vehicles, get them serviced for may be some kick-backs or something like that because it does not make sense that an entire department that has got depots right round the country is shunned by Government departments. That issue needs to be sorted out so that the mandate of handling transport issues is returned to CMED.

CMED as an entity has been delinquent in its approach to business I remember during COPAC outreach programme, ...

MR. SPEAKER: Order honourable members, the two of you, can you move back. You may not cross the line between the Chair and the Speaker. Honourable member you may continue.

MR. DZIRUTWE: Thank you Mr. Speaker, I was saying during the COPAC outreach programme, some of us who managed to drive around the country saw a lot of vehicles from CMED. As far as the road past Mount Darwin towards Dotito down there, there is a lot of earth moving equipment from CMED that was left idle there. The CMED has been unable to get itself to repatriate those vehicles to wherever they broke down. May be they should have sold them and get a bit of money. CMED has been very disorganised on that aspect. Then in terms of the fleets. There is an entity, they have acquired good equipment, but I heard the committee member talking about quite a large proportion of vehicles being Mahindra.

When I causally inquired what was going on taking into account that they are not well known for their strength, those at CMED say the Mahindra vehicles were foisted upon them by the Reserve bank and to try to see the sense of what made them to build up and accountability, leaves a lot to be desired. CMED as a business entity, has got the potential to grow taking into account that almost every part of the country has got a CMED Depot. If they were to adopt a business model they have got the potential to grow. A lot of customers in areas like Muzarabani for example or Gokwe or Hauna, they would access proper vehicle maintenance facilities at CMED if it would adopt proper business models. It is a potential that is just lying dormant and not being exploited.

The management team at CMED have also complained that in past few years one of their avenues of making profit was through the fuel business unit and I am told that they have been able to sell fuel in far places, but they have requested for fuel import licences from the Ministry of Industry and Commerce or Energy but they have been denied that opportunity. If it had been granted, it would have increased their profits and service their communities that are in outlaying areas by selling fuel at affordable prices. The board at CMED in the last 2/3 years has not been a full board. Why it has taken so long for the minister to institute a proper board, is anybody's question. It looks like in the absence of a board, the management team reports to the Permanent Secretary and it looks like it is Government system that they do not worry too much about the board of these parastatals taking into account that the Permanent Secretary is not supposed to be the one who runs the showIt is a situation we should all be unhappy about. If there is vacancy for the board that vacancy should be filled to ensure good running of institutions like CMED.

The management at CMED leaves a lot to be desired. They need to be proactive and think outside the box and try to exploit the chances that they have as an institution. The Government as a whole especially the ministers and the permanent secretaries should stop interfering with the running of CMED. At times you find that some top politicians like Members of Parliament or some ministers go to CMED and hire equipment and never pay for it. I have heard of situations where earth moving equipment has been let out to high ranking politicians and not being paid for. That kind of thing should be really stopped to allow the institution to function and be viable.

MR. SULULU: As a member of the Public Accounts Committee, I would like to add my sentiments to this rather saddening motion on CMED. We would like to thank the Comptroller and Auditor General Mrs Shiri for her sterling work despite having difficulties in human and financial resources.

CMED was commercialised in 2000 and ten years down the line it is still operating as a Government entity, servicing Government vehicles and purchasing on its behalf. Its operations and organisational culture has not changed since then. I want to say that this is unprofessional and unacceptable in this era.

We know that CMED has a board and has been operational but it has not been visible. In its operations it has been ineffective as it failed to deliver. CMED used to have good mechanics I can confirm this. My uncle used to work at CMED in Gweru. Over the weekends he would run his own garage where a lot of vehicles both private and public used to come there awaiting to be serviced and repaired. All these had trust in CMED and thus they had trust in my uncle because of CMED.

CMED at this moment should engage itself in an aggressive marketing because nowadays there is a potential market. We have so many Japanese cars running in our roads. If the CMED can have a marketing strategy and have competitive prices they can have all those customers. They can have private companies that can come and have their vehicles repaired so that at least it becomes competitive and offer good prices.

We know CMED has a strong infrastructure around the country. I think these facilities can be used to proffer business and prop up even employment. We have a lot of educated youths who want to be mechanics and I think they can be employed by CMED in those garages.

Looking at the share holding CMED, it is still 100% owned by Government. I wonder why it is still operating as a Government entity. I think there is need to look at that shareholding. Nowadays we are talking about the triple Ps. I would say lastly, the Minister of Enterprises and Parastatals, Mr. G. Moyo must intervene and assist these parastatals such as CMED to operate viably, profitably and efficiently.

MR. CROSS: If this was an annual general meeting of a company, we would be facing a situation where our auditors were presenting us a report and we, as the representatives of the shareholders were required to consider what to do. Which is the situation that pertains this afternoon. If any company in the private sector of which I was a shareholder would report to me that profitability has declined from US$6 million to US$200 000, in a period of three years in conditions where we could expect that there could be improvement, and at the same time they reported to me that US$50 million worth of stock was missing; that is the value of 1200 missing vehicles, believe me heads will roll.

The question that we have to ask this afternoon is where is the accountability of the Executive on issues like this? The Minister of Transport is not in the House. I think we have a right as Parliamentarians to demand swift and decisive action to remedy matters in State controlled companies like the CMED. Gone are the days where we can allow these conditions to continue and perpetuate without proper penalties. Heads should roll, directors should be fired, chief executives should be asked to retire. It is time to put our house in order.

THE DEPUTY PRIME MINISTER (MS. KHUPE): I move that the debate do now adjourn.

Motion put and agreed to.

Debate to resume: Wednesday, 21st March, 2012.

MOTION

BUSINESS OF THE HOUSE

THE ACTING MINISTER OF JUSTICE AND LEGAL AFFAIRS: I move that Orders of the Day, Numbers 6 to 16 be stood over until Order of the Day, Number 1 has been disposed of.

Motion put and agreed to.

MOTION

RESTORATION OF THE HUMAN RIGHTS COMMISSION BILL [H.B.2, 2011] AND THE ELECTORAL AMENDMENT BILL [H.B.3, 2011] ON THE ORDER PAPER

THE ACTING MINISTER OF JUSTICE AND LEGAL AFFARS : I move that the Human Rights Commission Bill [H.B.2, 2011] and the Electoral Amendment Bill [H.B.3, 2011] which were superseded by the prorogation of the Third Session of the Seventh Parliament be restored on the Order Paper at the stages which the Bills had reached in terms of the Provisions of Standing Order No. 131(1).

Motion put and agreed to.

FIRST READINGS

HUMAN RIGHTS COMMISSION BILL [H.B.2, 2011] AND THE ELECTORAL AMENDMENT BILL [H.B.3, 2011]

THE MINISTER OF JUSTICE AND LEGAL AFFAIRS presented the Human Rights Commission Bill [H.B.2, 2011] and the Electoral Amendment Bill [H.B.3, 2011] Bill.

Bills read the first time.

Bills referred to the Parliamentary Legal Committee.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON EDUCATION, ARTS AND CULTURE ON PRIMARY AND SECONDARY SCHOOLS TEXTBOOKS: EDUCATION TRANSITION FUND

MS. MANGAMI : I move that this House takes note of the First Report of the Portfolio Committee on Education, Arts and Culture on Primary and Secondary schools textbook tendering and distribution process under the Education Transition Fund (S.C.6, 2012).

MR. MHASHU : I second.

MS. MANGAMI :

1. Introduction

In carrying out its oversight function, the Portfolio Committee on Education, Sport, Arts and Culture, like other Portfolio Committees derives its authority from the Standing Order No. 160c which mandates it to "monitor, investigate, enquire into … any aspect of the legislative programme, budget, policy or any other matter it may consider relevant to the government department falling within the category of affairs assigned to it...." Accordingly, the Portfolio Committee on Education, Sport, Arts and Culture undertook an inquiry into the primary and secondary school textbook tendering and distribution process carried out by the Ministry of Education, Sport, Arts and Culture with the support of United Nations International Children's Emergency Fund (UNICEF). The inquiry was motivated by the Committee's desire to investigate complaints attributed by the Publishing Houses towards the unfairness over the awarding of the tender to one Publishing House and to assess the success of the Education Transition Fund.

1.2 Objectives

The objectives of the inquiry were:

· To investigate the administration (tendering and distribution of both primary and secondary schools textbooks) of the Education Transition Fund by MoESAC

· To assess the success of the Education Transition Fund

· To find out the expectations of the stakeholders (Printers. Publishers and Booksellers) and assess if they were met.

· To find out the views and recommendations of the stakeholders on the improvement in the administration of the Fund by the MoESAC

A Brief Background

The economic turn-down caused numerous challenges in the education sector ranging from the mass exodus of teachers to neighbouring countries, the dilapidation of the infrastructure, to lack of resources e.g. textbooks and other necessary learning materials. In 2008, the education sector was characterised by a series of teacher strikes, limited learning materials, school fees that soared beyond the reach of many and low morale owing to the poor salaries for the remaining teachers. This resulted in the deterioration of the provision of quality education, leaving the sector in an apparent state of desperation. The Government of Zimbabwe and UNICEF helped to combat some of the problems in the education sector, through the Basic Education Assistance Module (BEAM) and the Education Transition Fund (ETF) respectively. While the BEAM aimed at offsetting the costs for orphans and vulnerable children (OVCs), the ETF's thrust was the procurement and distribution of textbooks in schools to meet the ratio of 1:1 (one child: one book). Thus, the ETF was set up in 2009 to meet the above-stated target. The ETF was made possible by the assistance from the European Commission, the Governments of Australia, Denmark, Finland, Germany, Japan Netherlands, Norway, New Zealand, Sweden, United Kingdom and the United States of America.

3 Methodology

In undertaking the inquiry the Committee adopted the following methodology:

3.1 Oral Evidence Sessions.

The Committee held oral evidence sessions with the following public institutions:

Ministry of Education, Sport, Arts and Culture on the primary and secondary school textbook tendering and distribution process. The Committee held two sessions, first with the Secretary for Education, Sport ,Arts and Culture and the second with the Minister of Education, Sport, Arts and Culture. The purpose of the oral evidence sessions was to afford Ministry officials an opportunity to explain the textbooks tendering and distribution process and to defend their decisions.

3.2 The Committee also held oral hearing sessions with Zimbabwe Publishing House (ZPH), Longman Zimbabwe, Kingstons Holdings and Mambo Press Booksellers on the process of textbooks tendering and distribution process. The purpose of the oral evidence was to afford the Publishing Houses an opportunity to contribute their ideas towards the administration of both secondary and primary school textbooks tendering and distribution under the Education Transition Fund (ETF). The oral evidence was also meant to assess the capacity of Publishing Houses to provide school textbooks in Zimbabwe.

4.0 Findings of the Committee

4.1 Zimbabwe Publishing House, Kingstons Holdings and Mambo Press.

The Committee was informed that:

4.1.1 During the periodJune 2009- December 2009, various meetings were held involving the Minister of Education, Sport, Arts and Culture, Hon. David Coltart. his deputy, Hon. Lazarus Dokora and Ministry officials, Teachers Unions, Local Language Groups, UNICEF and donors, textbook publishers, printers, booksellers and paper merchants. These meetings were chaired by Mr. Bowora of the MoESAC and focused on how to handle the purchase. The following are some of the recommendations dealt with;

d. Achieving least cost

e. Promotion of local industry

f. Equitable distribution of the work between publishers and printers

g. Ensuring that the order did not create monopolies or end up with reduction of product choice.

4.1.2 Some stakeholders who included booksellers, paper Merchants, teachers' Unions and Local language groups dropped out of the meetings as they felt that the process was not being handled fairly. Similarly, fewer and less Ministry officials attended the meetings as in November and December 2009 the Minister of Education, Sport, Arts and Culture started chairing these meetings. Consequently the last meeting was attended by the Publishers, UNICEF officials and the Minister of Education without his officials.

4.1.3 Publishers were asked to submit joint prices and UNICEF was to supply Publishers with additional information, which UNICEF had used elsewhere internationally. A meeting to finalise these issues was to be convened, but it never took place.

4.1.4In December 2009, the Minister of Education, Sport, Arts and Culture announced that the tender for printing textbooks was to be done. The tender was advertised in the local press just before Christmas holiday and details were as follows "tenders are being invited from established ad (sic) reputable printing companies to print and supply textbooks for primary Education Curriculum for the Ministry of education of Culture" (sic). This made some stakeholders e.g. Publishers to feel that this was not a MoESAC tender but of UNICEF. Besides that this was a print tender as it invited printers not publishers.

4.1.5 A pre-tender meeting was held on the 5th of January 2010 and UNICEF advised that it was negotiating the publishing rights with publishers to enable printing by printers. When publishers individually enquired on how rights were going to be acquired when there were no negotiations taking place, they were told to join in and tender alongside printers. Publishers were given less than 13 days to prepare and submit tenders.

4.1.6 Tenders were publicly opened on the 18th of January 2010 and only the content of the first two tenders were announced. The opening requirement to read out all tenders was by- passed. The details of the tender which should have been read out at tender opening on the 18th of January were released after two months. The table below shows the preliminary tender results.

Table 1: The Preliminary Results for the Tender

Title

College Press ($)

Cost per page

ZPH ($)

Cost per page

Longman Zimbabwe ($)

Cost per page

English

4.5m

N/A

3.6m

0.007c

2.7m

0.007c

Maths

3.2m

N/A

2.8m

0.006c

2.8m

0.007c

Science

2.2m

N/A

1.7m

0.013c

2.2m

0.03c

Shona

3.0m

N/A

2.3m

0.006c

1.9m

0.006c

Ndebele

0.7m

N/A

0.4m

0.006c

0.5m

0.008c

The following are the explanations and supporting tables given by the Publishers and Booksellers with regards the outcome of the price criteria.

4.1.7 Price- UNICEF required two formats on price-i.e, the unit price and the price per page. This was left vague as to which format will apply. If unit price was the one to be applied, publishers would be ranked as in the table below

Table 2: Ranking by Unit Price

Title

Lowest Publisher ($)

2nd Lowest Publisher

3rd Lowest Publisher

English

Longman 2.7m

ZPH 3.6m

College Press 4.5m

Maths

ZPH 2.8m

Longman 2.8m

College Press 3.2m

Science

ZPH 1.7m

Longman 2.2m

College Press 2.2m

Shona

Longman 1.9m

ZPH 2.3m

College Press 3.0m

Ndebele

ZPH 0.4

Longman 0.5m

College Press 0.7m

Table 3: Ranking by Price per Page

Title

Publisher

Publisher

English

Longman 0.007c

ZPH 0.007c

Maths

ZPH 0.006c

Longman 0.007c

Science

ZPH 0.013c

Longman 0.03c

Shona

Longman 0.006c

ZPH 0.006c

Ndebele

ZPH 0.006c

Longman 0.008c

4.1.8 Based on the above table, Longman would have been awarded English, half of Maths and Shona while ZPH would have been awarded half of Maths, Science and Ndebele.

4.1.9 Final Tender Results- tender adjudication results were never released as one would expect in accordance with the Statutory Instrument No.171 of 2002, Part IV, Section 22 (3), which requires unsuccessful tenders to be "advised in writing of the name of the successful tenderer and the amount of his tender by the Board." Tender results were communicated to Longman Zimbabwe only through a contract signing ceremony without announcing results to tenders in writing.

4.1.10 Tender irregularities raised by Publishers

The Committee was informed that:

(i)The Minister of ESAC and UNICEF accepted an agreement from the three publishers on how publishers would share each subject equally as specifically requested by the Minister and UNICEF. After agreeing with publishers, the Minister announced the winning tender without explanation.

(ii) The tender in the press was specifically a printer tender, not a supply tender. The tender was eventually awarded to a publisher and not a printer.

(iii) During the pre-tender meeting, UNICEF gave misleading information to publishers to allow printers to print. This was misleading because no such negotiation was going on.

 

4.2 Longman Zimbabwe

This session could not take place, as the Managing Director excused herself on the grounds that she did not understand what information was required by the Committee. However, the Committee asked the Managing Director to make a written submission and the following are the key issues that were stated in the written submission:

4.2.1 MoESAC held several consultative meetings with Zimbabwe Book Publishers Association and other publishers prior to the tender and a number of issues such as publishers' lists, printing capacity, copyright, royalties and market share were discussed in these meetings. These meetings were chaired by the MoESAC.

4.2.2 When the advert for the tender was floated, Longman responded and made submissions as per the required documents

4.2.3 Longman won the tender and supplied the books as per tender delivery dates

4.3 Secretary for the Ministry of Education, Sport, Arts and Culture

4.3.1 The Secretary informed the Committee that at the initial stage, the exercise for the tendering and distribution of textbooks in schools was meant to cover the four core subjects of English, Maths, Shona/Ndebele and Environmental Science in Primary schools. He indicated that other subjects were to be covered as and when more funds became available.

4.3.2 The Committee was also informed that it was then decided that phase two of the Education Transition Fund was to be used to procure and distribute textbooks to all secondary schools. This was to cover five core subjects, English, Shona/Ndebele, Maths, Geography and Science.

The Secretary stated that the following were the steps taken on the tendering for textbooks in primary schools:

· The MoESAC carried out a survey to establish the actual titles of textbooks that each primary school was using.

· The results were shared with UNICEF which was coordinating the procurement and distribution of the books.

· Several meetings were held among the MoESAC, UNICEF, Printers, Paper merchants and all Publishers in this country.

· UNICEF insisted on using its international tender procedures which resulted in only one publisher (Longman) winning the tender to produce and provide textbooks in the four subjects areas.

· The MoESAC held several meetings with UNICEF to express its displeasure at the manner in which the exercise was done, whereby the local publishers were not given some portion of business.

· It was agreed that corrective measures be taken with respect to phase two (Secondary School textbooks tendering and distribution) of the programme involving supply of textbooks to secondary schools.

4.4. The Minister of Education, Sport, Arts and Culture.

During the oral hearing session in September 2011, the Minister for Education, Sport, Arts and Cultureinformed the Committee that in 2009, the education sector was in a desperate state as the average ratio for textbooks- pupil was 1:15 and in remote areas such as Binga it was one for the whole class.

4.4.1 The Committee was informed that in September 2009 the Ministry launched the Education Transition Fund fully funded by UNICEF and other donors. The fund was established to meet two specific goals which were to

a) meet the needs of children

b) promote local publishing houses

4.4.2 The decision for the administration of the fund were reached through mutual agreement between Ministry and UNICEF.

4.4.3 The Minister confessed that there were no surveys carried out to identify the specific needs of children in primary schools.

4.4.4 Publishers were informed of the importance of the exercise and hence encouraged to offer tenders with low profit margins. The Ministry tried to negotiate so that the local publishers reduce their profit margins but failed leading to the awarding of the tender to one publisher which had a substantial low costs.

4.4.5 Secondary schools textbooks tendering and distribution:

The Committee was informed that the ministry engaged a private company to carry out a survey to establish the needs of students and schools in July 2010. The Ministry then engaged publishers leading to the contracts between the Ministry and ZPH, Longman Zimbabwe and College Press.

4.4.6 The government provided additional funds of US$1 million for the textbook acquisition.

4.4.7 The exercise was successful, as the textbook-pupil ratio was reduced to 1:1, achieving more than SADC guidelines of 1:4 in the selected core subjects.

5.0 Conclusion and Recommendations

5.1 Lack of an information data base.

The Committee observed that the MoESAC does not have clear data capturing mechanisms despite that there are quarterly returns that are sent to the Ministry head office. The Committee noted that the lack of information resulted in the distribution of some wrong textbooks by the Ministry in many Districts. A case in point is of Lower Gweru which was supplied Shona textbooks instead of Ndebele. Moreso, the Minister in his own words stated that he did not know the actual number of schools in the country, and the distribution of textbooks was based on estimates.

5.2 Primary and secondary school textbooks tendering and distribution.

The Committee noted that the whole process (Primary and secondary school textbooks tendering and distribution) was not transparent. The Committee questioned the role played by UNICEF in dictating their own tender procedures at the expense of local procedures ` raising concern whether international law takes precedence over domestic law. The Committee also noted that the administration of US$I million additional fund from government was not well explained by the Minister as to whether the fund followed UNICEF tender procedure instead of Zimbabwean laws.

5.2 Tender advert

The tender barely met tender requirements, especially on transparency and due process. The UN bodies are immune to courts procedures due to Diplomatic Immunity hence could not be challenged over the matter by local publishers.

5.3 Contracts and Tenders

The Committee noted that the shift from tender to contracts on the second phase was not well explained by the Minister. The Minister failed to answer satisfactorily the Committee's question of whether the decision by the Ministry to award contracts rather than floating a second tender was lawful or not.

5.4 Local industry

The unilateral decision of awarding the tender to one Publishing House (Longman) compromises the capacity of reviving the local book industry and does not show fairness.

5.5 Announcement of the tender winner

The failure by the Minister to announce the winner of the tender was a clear sign that the tender procedure was not well followed and observed.

 

5.6 Survey

The Committee noted that there was miscommunication on the survey information as the Secretary told the Committee that the survey was conducted while the Minister contradicted this statement pointing out that there was no such survey carried out to establish the needs of children in primary schools. This also resulted in the Ministry providing some wrong textbooks or more/less the required numbers.

5.7 Quantity and Quality

The Committee observed that, while the MoESAC put much emphasis on the quantity, the quality of education could be compromised as primary school pupils were subjected to only one school of thought.

5.8 Supplementary books

The Committee noted that the justification for buying supplementary textbooks by parents and schools was not fair as some could not afford.

5.9 Education Transition Fund

The Committee noted that the ETF tendering procedure was not transparent although it managed to reduce pupil-textbook ratio to 1:1 in the core subjects at primary level.

6.0 The Committee's Recommendations

6.1 There is need for the MoESAC to put in place a database capturing mechanism by being IT compliant so as to keep abreast with developments and correct information within the Ministry

6.2 There is need for transparency in the tendering process and this can be done by fully engaging all the stakeholders concerned.

6.3 There is need to promote local industry in tendering of this nature.

6.4 There is need for the re-alignment of international and local tendering procedures.

6.5 There is also need for continuous support from the ETF to cover the other subjects in a transparent manner.

6.6 There should be a harmonious working relationship between the Minister, the Ministry officials to avoid contradictions, also, between the Minister and the Committee for the smooth run of the Committee's activities.

 

 

MR. MHASHU: Thank you Mr. Speaker. I am the seconder of the Report written by the Committee and I want to give a supportive critique and give my debate based on three areas that I think are very important.

I want to remind the House that there were preliminary meetings that were held between the Ministry of Education, Sport, Arts and Culture, UNICEF, publishers, printers, book sellers, paper merchants and these organizations agreed on certain conditions where they had their focus on. The conditions were that, the whole exercise and transaction should be achieved with the minimum or least cost.

Secondly, that the promotion of local book industry should be sustained. Thirdly, that there should be equitable distribution of the work between the printers and publishers. Fourthly, that the exercise must ensure that we do not create monopolies in the book industry and indeed also reduce the choice of products in the end and lose our focus.

As I said earlier on, my debate is geared on four areas. The first one is corrupt tendencies in the whole transaction. The second one is outright corruption in the transaction and thirdly, the prejudice and damage done to the nation as a whole through this transaction.

Mr. Speaker, I begin by corrupt tendencies, any tender that is flighted is flighted openly and without any secrecy. It must be announced by the tender board, in this case announced by the Minister of Education, Sport, Arts and Culture and that the set rules must not be deviated from. If there is any deviation from the set rules, then you have a problem. There was apparent evidence that the laid down rules were flouted. That is why from the beginning there was an elected Chairperson to all the meetings who was Mr. Chrispen Boora who went there to chair the meetings with also UNICEF officials, booksellers, printers were all there.

Mr. Speaker Sir, because the laid down rules were beginning to be flouted, then there was a boycott by officials from the Ministry of Education and Culture, a boycott from the booksellers and a boycott from members of the printers, from paper merchants because they did not want to be associated with corruption. So, after that was done and the Minister of Education, Sport, Arts and Culture saw that there was no Chairperson then he took over chairing of the meeting himself as if there was no problem but there was.

The tender that was flighted was that pertaining to the printers and the local and international printers responded. Mr. Speaker Sir, 38 printers attended the meeting only to be told that even if there were there as printers they did not have copyrights for them to do the work and therefore on second thoughts the Ministry then invited the publishers to be part of the system. But because printers have no copyrights, UNICEF promised that they were going to bring information and also negotiate a solution to publish and print. Already you can see opaqueness from the beginning. UNICEF did not supply the information that was required. The Committee could not succeed in inviting UNICEF to the Committee because of diplomatic conditions and procedures. We wanted to question UNICEF why such a procedure was not adhered to.

The tender advertisement was done in December 2009 and as the report says, the tender was misleading as if it was inviting printers only but it was printers and also publishers. Publishers are the ones who have the copyrights not printers and because of that the advertisement to tenders was then redone including publishers who had the copyrights. They responded but they were all invited two days before the deadline and you can imagine the frantic positions these publishers had.

Mr. Speaker Sir, when tenders are flighted and the date for opening them is due all the tenderers are supposed to be there, to listen or witness the opening of those tenders. In this case there were tenders from 38 printers and tenders from 3 publishing houses. The Publishing Houses were Longman Zimbabwe, Zimbabwe Publishing House and College Press. They were supposed to be present to witness the opening of every tender that was issued. So, you can imagine all eyes and ears open to witness the opening of the tenders. What happened is that out of more than 38 tenders submitted, only two tenders were opened. The rest were ignored, flouting the tender procedures. You can also imagine the anxiety expressed by those ignored. To us as a Committee and the nation, this was flouting of the tender procedures of first class.

When tenders are opened, let us suppose that every tender was opened, every tenderer is obliged by the process to receive the results in writing but because only two were opened and the rest of the tenderers were expecting at least to hear the winner of the tender - but there was no official announcement despite that the Minister has promised that the results were going to be out in two weeks, but this went on to two months. When two months expired, only then were the results were announced. Results announced in but only one publishing house was privately communicated with with the Minister to the fact that they had won a tender. This publishing House was Longmans Zimbabwe. Why Longmans Zimbabwe? It would have been fair if there was competition, but there was not any competition at all. Why did the Minister and UNICEF not open and subject tenderer to a competition announced in public. Why Longmans Zimbabwe? We will trace

the internationality of that process. UNICEF was magnanimous in saying we want to give publishers a chance not only to zero in on books, but also to demonstrate that the conditions that were laid down by UNICEF and the ministry are followed. UNICEF requested the three publishing houses to sit down and come up with a joint agreement on the printing of books in as far as the unit price and the page print was concerned and they thought it was a fair game.

So the three publishers went and met and came up with a resolution that let us choose the winner of whatever important books. In fact they established that, there are five of them, which are English, mathematics, environmental science, Ndebele and Shona. The publishing house set and agreed to vet one another as to the quality and efficacy of their deals. What happened is that they rated themselves on the unit price, on the page price and on the content of the text books. According to them, they came out with results as agreed upon by three publishing houses. The results are as follows if they were followed:

2. Longman Zimbabwe had excelled in the English, Shona and we are good or average on the mathematics side;

3. Longman was number one in English and also number one in Shona, but was the average in mathematics. So the division of labour was supposed to follow that decision that had come from the publishing houses.

4. ZPH was number one in environmental science, number one in Ndebele and we are also good enough for mathematics.

That is why the report was saying half mathematics. This is what I am trying to interpret now. In other words, ZPH led in environmental science. ZPH led in Ndebele and in all fairness, the printing of books should have been given to these publishing houses accordingly looking at the best deal, achieving the least cost and promoting also the local book industry. Also avoiding monopoly given to one set of a company but no, the minister refused but despite that, that suggestion was given by UNICEF itself. Why Longman alone when it excelled in some areas, others excelled in other areas, but Longman Zimbabwe was given everything as if they excelled in everything yet it was not true.

I now come to my second area Mr. Speaker Sir, which I am referring here as corruption. These were tendencies towards corruption and the corruption is as follows: The ministry hid behind the festers of international law taking precedence of local laws. As far as we know, where there are local laws, or national laws, international laws, there will be a strong re-look as to why we must use international law. This law is only used when there is conflict between the national law and international law. National law takes precedence of a preponderance over the local law if there is a conflict. If there is no conflict, the two bodies meet together and harmonise and say let us take half international and half national and end their query.

International law took preponderance over the local law and the question is why. Mr. Speaker Sir? I will answer the why shortly. Longman Zimbabwe is a subsidiary company to an international company, Longman based in the UK. So the use of international law did not cost Longman Zimbabwe anything because their mother body is anywhere favoured by the international procedures that were accepted by the ministry. UNICEF was in favour of them at the expense of local companies losing grip and losing industry. That is utterly unfair. There was a blatant, deliberate favour of a transnational company against local companies that will do the same good job. Then we say was there something that enticed who, to be able to zero in the international companies at the expense of the local ones.

I do not want to mention anything that perhaps there was some kind of pre-discussion and pre-persuasion. I am not saying that, but we then begin to worry why that thing took place. If the printers did not have copyrights, but publishers had. To the contriver or the mastermind of making Longman Zimbabwe win, knew that even if the local companies did not have copyrights, they would use national companies, but putting in front a local company. In this case Longman Zimbabwe was a front of international Longman based in the UK and that is corruption that we will never tolerate.

It does not matter who says what, that is corruption and that must be killed -[HON. MEMBERS: Hear, hear]- The minister blatantly violated Statutory Instrument 171 of 2002 part 4, Section 22, subsection 3. I am not talking about the minister's profession but surely anyone even anyone who is not a lawyer, you can not breach such an obvious instrument. That instrument requires that unsuccessful tenderers should be advised in writing of their failure to qualify and also advised of the winner of the tender, with reasons also given. There was nothing in writing to the losers, but only something in writing to the winner. That something in writing to the winner was done secretly. Then they were invited to a signing ceremony that they had won the tender. The rest of the 38 plus tenderers were waiting to hear whether they had qualified or failed. Only to read about the success of a certain company in the newspapers and let me repeat, that is also corruption.

Let me now come to my third area, which I said prejudice and damage to the nation of the whole process. The life span of a text book printed on good quality paper, is five years. So it means that all these other publishing houses have to wait for five years until these books get torn in the schools to be able to compete again. Hopefully competing in the right and fair way. These little small publishing houses like College Press, ZPH, Jongwe printers must go broke............

MR. SPEAKER: Order, the hon. member is left with five minutes.

MR. MHASHU: I think I will cope with the time. The other damage is that it is dangerous for the nation to subject these young fellows who are in the primary stream, from grade one to grade seven, to be subjected to one educational thought and the thought coming from Longmans as if Longmans authors have the preserve and monopoly of brains and expertise. That is not fair. What we know as educationists and as parents is that we must expose our children to as many reading materials as possible for them to widen and open up. For the bloody five years from grade one to grade seven they are only going to learn the content from Longmans, and the pictures that they see from Longmans. The same illustrations a boy running after a cat from Longmans, the same methodologies used by the teacher is given by Longmans, the same routine, monotony of these books as if there are no other better books. It is not fair for the nation.

It is a damage of having a ratio of one to one, one pupil to one book. If the one book was a book of quality we would say okay but who came out with this decision that this one book from Longmans in grade one, grade two is the best book when the publishers had denied that, had said the best book for Longmans is English print. The best for ZPH is Ndebele, why did they not do that?

When an individual is subjected to the same material day in day out as long as there is contact, we call that conditioning or indoctrinating of a person. That person is going to think that all that which is in front of him or her is the real. Who of a parent would like that, that his or her own child is conditioned.

Conditioning and indoctrination have the following results. Indoctrination kills creative thinking, creativity, innovation and retards intellectual maturation. Pupils just come to school and imagines a picture in that book and yet there supposed to be several books for reference from the teachers. At any one year stream at primary we have 3 million pupils, grade one up to seven, these 3 million are subjected to the same material as if there are no other brains in this house in the country.

Why do that as a nation? Is it just because we want quantity at the expense of quality. If I were to be given US$30 to buy clothes, I would buy one special pair of trousers and one shirt rather than buy 30 items of a dollar each which I know I am going to put them on and after five minutes they are torn. Why should we prefer to have a quantum consideration of book when some of them are not of quality?............

[Time Limit]

MR. SPEAKER: Order, hon. member, your time is up.

MR. NCUBE: I move that the hon. member's time be extended.

MR. GONESE: I second.

Motion put and agreed to.

MR. MHASHU: I want this House to note that at the end of seven years we are going to chain out of the system, raw pupils, unthinkers. I then mentioned as number two point of focus, that there must be promotion of local industry. The local industry was killed by promoting and supporting monopoly. Monopoly of one publishing house Longmans. I have read most of the books in the schools because I used to train teachers at college. To train them you must know what they are going to teach. I went through these books and I can bulge which books are the best for our country, I can. We said that we want to promote local industry and yet we create a monopoly. The local industry is dead, dead like dodo. The workers in the book industry feel let down by the Ministry and I want to protect the nation in this House. We are concerned and we cannot exonerate or let that go without us commenting for the world and nation to know that we are concerned. All the Kingstone book outlets in the country that were originally 48 were cut to 25 branches and that means the workforce was retrenched. Booksellers lost their jobs because from 90 book stores we only have 34 because of this exercise and all the workers were retrenched in their hundreds. So, according to the second focus agreed upon that we must promote the local industry we are not at all.

We then realised that international corporations were insisting on coming in because we are using international procedures to run these tenders. We concluded that there was no loss in Longman Zimbabwe in as far as printing is concerned because their printing company as Longman is based in South Africa in Cape Town known as CTP printers. So, the tender was won by Longman, they do the printing of the books via their international company based in UK, via its printers in South Africa and you can see now the ingenuity of the convener of the whole process as they thought they would not be discovered. We have discovered it, putting Longman Zimbabwe as a front when actually it is another company that is doing the job. You can also imagine that in this country we are also promoting indigenisation. As a concept it is alright but it depends on how it is done. Are we then promoting indigenisation when we are killing local industries. No. Also look at the image of the the local book industries and that of the country at large that if you are going to win using corrupt ways, go to Zimbabwe. You will win a tender and that is damaging the image of the nation. Why would one do that, even if I am are to benefit a million or billion dollars I cannot do that at the expense of the nation because the nation is bigger than myself.

Mr. Speaker Sir, suggestions to ameliorate the situation are in the report, that the extra million that was given by the Ministry of Finance could have been used to purchase library books and other textbooks to ensure that other children are learning through a diversity of information. It is not too late and that can be done, and because the Ministry realised that they had done something outrageously known by the nation it is now being said let us not go for tender, but let us contract publishers and printers. It could be because tenders are too intricate for them. Though contracts are weaker than tenders, we are now resorting to contracts to try and improve what we did wrong.

Mr. Speaker Sir, personally I am very disturbed, as an educationist, because I know the value of cross referencing in books when studying but let us know that after five years, we will have a project of a child that is half baked because of the whims and wits of somebody. Let me rest my case.

MR. MUDARIKWA : Mr. Speaker Sir, let me take this opportunity to let you know that when debating I shall be referring to my notes from my I-pad, a development I am encouraging all Hon members to use in this august House.

Zimbabwe is rated as one of the most literate country in Africa. This was the great work which was achieved by the different publishing houses in Zimbabwe. They did great work, they produced primary and secondary school textbooks and we are where we are because of the great work done by the publishers. We are also where we are today because of the great work done by our printers. What is shocking from this report is the Committee was initially chaired by Ministry officials and then later chaired by the Minister himself and when the tender results came out they were not made public. What education are we giving to our people and what education are we teaching to our children.

Mr. Speaker Sir, allow me to explain the importance of education. Liberation that came in 1980 gave the people the general freedom and they are liberated but education creates the actual human being. I am pleased Mr. Speaker Sir, that my former teacher, Mr. Chinyadza is listening attentively. He always used to say, " the importance of education is to create and develop a mind" and it has become very difficult for the nation of Zimbabwe. We now have greedy corrupt tendencies hiding under the international law. There is no international law which says if you are in Zimbabwe, you are coming from America, you drive on the left side of the road, but when you are here you have to drive on the right side of the road. That is simple and it can not be the other way round.

The Minister violated Statutory Instruments, who then is going to protect the Statutory Instruments. Statutory Instruments are created by ministries and the same Minister violets the same Statutory Instrument he created. The other important thing is that we must realise that the role of publishing houses in education is to give a variety, that is why you can see that today I am in a different suit and yesterday I was in another one. The element of variety is critical in our lives. It is very critical and again that is why you find that even in Zimbabwe we have several newspapers, that gives us variety. A different perspective of a different situation -[AN HON. MEMBER: Inaudible interjection]The issue of broadcasting is not my area.

We are discussing what we are facing as a nation. The situation our printers are facing, we have Harare Polytechnic College, there are some students there who are training in the printing industry and ultimately, they will be called journeymen. They are now doing nothing because all the work is gone, all the work was printed in Capetown. These people they know and they take advantage of our laws. They know that we like education.

Here you bring a book, it comes into this country duty free and that is why they are printing their books in Capetown. They just come into the country duty free. The local industries - they pay VAT on the paper, they pay Duty on the ink. They also pay taxes to the government. What is worrying is for UNICEF to collaborate with a Minister to destroy the education of Zimbabwe.

We propose Mr. Speaker Sir during your absence that somewhere in this august House, there is a need to have a chaplain or a reverend to assist in divine intervention when you come to certain critical issues like these because the corrupt tendencies are coming up everyday. It is not Members of Parliament who are corrupt because we see that they are being acquitted. It is mostly ministers who are corrupt and if we are getting this level of corruption, some of it may be, it is in the blood. It is inheritance and that is why we want, may be in the SROC when they sit, they must create a small structure where you have a small church where some of these people go for divine intervention. Prayers are held there and eventually we will achieve because as political parties I do not think that we are able to defeat this monsters known as corruptions.

MR. SPEAKER : Order hon. member, did I hear you correctly as saying that ministers are corrupt?

MR. MUDARIKWA: Not really but ….

MR. SPEAKER: Order, I am quite certain that I heard you correctly. Therefore, kindly withdraw that statement, it was a generalising statement.

MR. MUDARIKWA: Mr. Speaker, I withdraw my statement but …

MR. SPEAKER: Just withdraw the statement.

MR. MUDARIKWA: I have withdrawn my statement Mr. Speaker.

MR. SPEAKER: Thank you very much. Continue.

MR. MUDARIKWA: Thank you very much Mr. Speaker Sir for allowing me to continue.

Finally Mr. Speaker, let us develop our education. Let us also respect Mr. Speaker Sir the duties that your Committees are doing. Your Committees are working very hard day-in-day-out to achieve certain specific objectives. The number one objective is to have a Zimbabwe that is free from corruption, a Zimbabwe that is free from people who set laws and then overnight they change the same laws. So your Committees Mr. Speaker Sir, are working day-in-day-out.

Finally, we want the Education Transitional Fund, if it is to come in future, with some of these things, the problems that happen is that if all these tenders/contracts, when they are finalised or agreed, would come to this august House for ratification. That is where we will now be able to see that in this arrangement there is something that is very wrong. So our appeal to you Mr. Speaker Sir, is that certain international agreements must come to the House for ratification before they are implemented.

What we are doing now is that we are discussing things which are gone and will never be rectified and the education system of our country will have gone to the dogs.

Finally, I want to thank Hon. Mhashu who is by all standards, if it comes to education knowledge, he is the headmaster of this august House, for the job well done in shedding light to many hon members who do not understand. Mr. Mhashu does not only show that, he also shows that he has wisdom which is a God given scenario where he managed to educate including Hon. Mushonga who did not understand how tenders operate. Thank you Mr. Speaker Sir.

MR. BHASIKITI: Thank you Mr. Speaker. I also feel duty bound to make a few comments on this motion brought in by Hon. Mangami.

Mr. Speaker, I would like to highlight the facts that in this country the distribution of books to schools has been contracted and awarded to booksellers who are registered. The book industry runs this way, there is no profit which a bookseller can create or add to the book price which is given by the publisher. The bookseller receives only 25% discount from the publisher to deliver the publisher's book to the school. So, as a take-off point, when tenders are floated, it is to the booksellers so that they distribute or supply those books to the schools.

It is given that the booksellers will take the books from the publishers, three or four of them. What I am saying or implying here, draws the second very important aspect in this matter. Schools sit down and choose textbooks they prefer to use in their schools. In relation to the textbooks and the syllabus as they had started the previous years. So, the choosing of textbooks is the preserve of schools, not even the Ministry itself, let alone in this case, the publisher. It is the preserve of schools -[AN HON MEMBER: Inaudible interjection]- Mr. Speaker, I hear one hon. member from afar that because of his lack of depth of understanding of the education system and how it operates, it is different from feeding people with maize that the yellow maize is sadza and the white maize is sadza. It is a different scenario in the education system. A book by a specific author matters and it has all the difference from the second author. So, I am saying, the schools had identified textbooks they preferred to use and submitted them to the Ministry of Education, Sport, Arts and Culture - the schools submissions were disregarded. This was disregarded as they wanted to award the tender to one publisher - I have made you aware that by awarding a tender to a publisher it is first in breach of the standing arrangement and contract between the Ministry and the Booksellers Association who should supply the books. They breached the first one, disregarded the booksellers who were supposed to supply the books - went to the publishers. But as already highlighted by Hon. Mangami and Hon. Mhashu, that even in awarding to the publishers there was no fairness because it was just hand-picking a publisher of choice.

This will not stop us from making further inferences that what is it that publisher which attracted that favour against all reason and proper procedures of doing business with these books. I hear when Members talk of international law - it is not the first time that UNICEF has given money and assisted in the purchase of textbooks in this country. They have for a long time been awarding tenders to booksellers and they have been doing the best job, but in this case you see a multi-national company with its roots in the United Kingdom and it is printing nationally in South Africa now getting the favour of a Minister who takes it upon himself to preside on the tendering of these books. In Zimbabwe we have overcome racial discrimination - racial discrimination yes, we defeated that and said we shall live as one people white, black whatever colour but our memories are provoked when the Minister and knowing him well, who he is, presides and picks a British company and then allows all the other due process to fall away. No, definitely, you can see a very bad hand there. It is …

MR. MUCHAURAYA: On a point of order Mr. Speaker. I think it is unparliamentary for the hon. member to refer to a Minister by his colour.

MR. SPEAKER: Order, hon. member, there is no point of order there. However, the member is advised not to make any references that may be misconstrued as racial references. You are advised to refrain from such references.

MR. BHASIKITI: What I am stating before you, Mr. Speaker, is that corruption has no colour - this is an issue of corruption and we do not want to put colour behind or before it.

What I am saying in very clear terms is, I will be less diplomatic unlike my predecessor Hon. Mhashu could not point out. In this case, it is clear the Minister had a very big hand in twisting procedures to favour one publisher and this cannot be without a price that is favourable to him. I put it to this House that the Minister has to be investigated for corruption. Mr. Speaker, we have a clear policy that has to be supported by the Executive and by the Minister himself - the Indigenisation and Economic Empowerment Policy, which should have seen the booksellers, who are largely indigenous, empowered. If their number is reducing from ninety [90] to thirty-four [34] - you can see the destruction of the indigenous company and the whole aspect of the promotion of the indigenous companies is being defeated by one man and this cannot be allowed to go on.

Mr. Speaker, we should know that this country has come out high on the literacy level. Zimbabwe has a high literacy rate where we have many people going through the education system but now, those who have studied books like Hon. Mhashu - there are certain books that have a colonial inclination. When a child reads that book, his mindset is diverted or drawn in a certain way. I can put it without doubt that when you compare the three booksellers - Longman Zimbabwe, College Press and ZPH. Longman, because of its origin - it is highly British and that set up and trying to destroy our children by indoctrinating them through the use of these books under the proxy of UNICEF's own deviation to what it calls international law when it is not - is totally unacceptable.

Mr. Speaker, the issue at stake in the Ministry of Education is, it is not only correct to say for five years our pupils will be subjected to those books. But since those books were just meant to reduce the number of pupil to textbook ratio - it is only the reduction of the ratio, not the content and quality. And no school Head will leave his school to just go all the five years without looking for textbooks elsewhere.

I am saying, there is urgent need to ask Government to look for double the amount which was released by UNICEF to allow schools to bail themselves out of this disaster. The schools should quickly be allowed to buy good textbooks. There are good writers, our own African writers, Zimbabwean writers in the education system who can write and give good examples deriving from our cultural backgrounds and our own history. That should not be sacrificed under the guise of teacher and pupil book ratio. It is Government through the Minister of Education which has made this terrible blunder, the Government should quickly look for funds to go and correct that poisoning which is going on in our schools... - [HON. MEMBERS: Inaudible interjections]-

MR. SPEAKER: Order, hon. members, my role is to preside over the debates but sometimes you feel in a way compelled to give direction. I think it is unfair to prejudge the product that you have not had sight of. It will be unfair for this House to really have that kind of a debate where we are passing judgment on issues that we are still yet to have sight of. I am giving guidelines, you can debate as you want but I think the nation may have a wrong perception and remain with the feeling that already damage has been done. So, I suggest you refrain from such kind of references because we are misdirecting the nation. I do not really think we have damaged the brains of any children. I do not think by awarding tenders, we have damaged the brains of any children. The point has been made by Hon. Mhashu and I encourage that we debate on facts rather than on assumptions.

MR. BHASIKITI: I am a member of the Education Committee and as I speak, I have 11 years of teaching experience - [Laughter] - and 8 years of supplying books to schools. So, Mr. Speaker, when I speak, I am not making empty allegations, I am not making assumptions, I am picking facts as they stand. It is not my intention to appear that I do not want to take on board what the Speaker has ruled but I just wanted to nourish you with the experience I have had within the education system. I am not just speaking like any other member, I am an educationist and a supplier of textbooks to schools.

Mr. Speaker, I believe to do justice to this issue, it can not just remain as a motion debated in Parliament. This is an issue which has to be handed over to the Anti Corruption Commission -[HON. MEMBERS: Inaudible interjections]-I submit that the Anti Corruption Commission should look into this matter with seriousness. It is not only a question of those who lost the tender but it is a question of the damage which has been done to the nation. It is also a matter which requires Government to take stock of its ministers who deviate from what Government agrees to do in terms of statutes and contracts. Mr. Speaker, you find that individuals just stray away like a stray canoe and we leave them like that. I believe the Minister of Education must be brought to book. I believe the Anti Corruption has a case here to investigate not to bother innocent Members of Parliament who work day and night assisting their constituencies. So, I submit Mr. Speaker, before I sit that this motion should be taken to the Anti Corruption Commission , allow them to deal with this issue to the bottom. Thank you Mr. Speaker.

MR. NCUBE: I would like to thank the mover of this motion and the seconder. I would also like to thank the Minister of Education and the Permanent Secretary. Under these difficult conditions, they managed to supply, whether this is cheap quality or not, but for a start - I know the tender procedures were not followed. Mr. Speaker, for the first time now, you can go to any school and you can find the textbooks but if we are seen now concentrating on the procedures, I do not think it is fair. The procedures were not followed but now we have the textbooks. Whether it is good quality or bad quality but now our students can access any information that they want. The bottom line is that the Minister and the Permanent Secretary made a mistake but we must say thank you for what they have done. Let us say after 5 years when the books are torn, then the procedure must be followed. Credit must be given where it is deserved not to blame everything. They tried their best under these conditions. The ratio may be was 1 : 45 per textbook but now it is 1 : 1 which is a great improvement. We know the procedures were not followed but we are saying next time the procedures must be followed. Than you very much Hon. Speaker.

MS. D. SIBANDA: I move that the debate do now adjourn.

MR. MUSHONGA: I second.

Motion put and agreed to.

Debate to resume: Wednesday, 21st March, 2012.

ANNOUNCEMENT BY MR. SPEAKER

NON-ADVERSE REPORTS RECEIVED FROM THE PARLIAMENTARY LEGAL COMMITTEE

MR. SPEAKER: I have received non-adverse reports from the Parliamentary Legal Committee on all Statutory Instruments gazetted during the months of November and December 2011 with the exception of Statutory Instrument 127/2011.

I have also received non-adverse reports from the Parliamentary Legal Committee on all Statutory Instruments gazetted during the months of January and February 2012 with the exception of Statutory Instruments 153/2011, Statutory Instrument 9/2012, 10/2012 and 11/2012.

On the motion of MS. D. SIBANDA seconded by MR. MUSHONGA , the House adjourned at Five Minutes to Five o'clock p.m.

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National Assembly Hansard Vol. 38 NATIONAL ASSEMBLY HANSARD - 15 MARCH 2012 VOL. 38 NO. 28