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Aug 19th
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NSSA In $50 Million Hotel Scandal

The cost of a hotel built by the National Social Security Authority in Beitbridge ballooned from US$17 million to US$50 million in murky circumstances, which include hiring a construction firm that could not even afford the work it was doing.


NSSA ended up advancing pensioners’ funds to contractor Costain so that it could work, even though it had been awarded the US$17 million tender by the State Procurement Board on the basis that it had the financial wherewithal to build Rainbow Beitbridge Hotel.

Further, the hotel could be closed by Beitbridge Town Council as NSSA has failed to regularise documentation, which has been withdrawn by the architect over a dispute on fees due for work done.

The council has granted a three-month certificate of occupation that will expire this month because NSSA failed to submit architectural drawings.

Engineer David Mandishona is withholding the architectural designs because NSSA discarded him without paying him outstanding fees.

The matter is due for arbitration and if NSSA loses the case, pensioners’ money will pay off Eng Mandishona.

Another burning issue around the 140-room hotel being leased to Rainbow Tourism Group is that NSSA engaged an unregistered engineer, Ms Silibaziso Chizwina, to run the project.

Ms Chizwina is employed by NSSA.

Because of this, the social security authority cannot get a certificate of occupation as it must be signed off by a registered engineer.

Furthermore, NSSA investment director Mr Shadreck Vera sits on the RTG board as a NSSA nominee.

RTG is paying NSSA US$145 000 monthly in rentals to lease the hotel, raising issues of conflict of interest.

This led NSSA general manager Mr James Matiza to write to Mr Vera with an instruction to stop dealing with RTG.

“Since you sit on the RTG board, your recommendations to the general manager on matters relating RTG may be influenced by your membership to the RTG board,” wrote Mr Matiza.

NSSA also loaned US$4 million to RTG, in which it is the major shareholder, to buy furniture for the hotel.

It has also emerged that NSSA issued itself a practical completion certificate, which certifies that the hotel is ready for use, when the normal practice is that it should be issued by an architect. NSSA real estate manager Mr Allan Khatso signed the certificate.

On the escalation of costs, Mr Matiza said yesterday that the State Procurement Board approved Costain’s US$17 million bid as the main contractor against NSSA’s advice.

He said Costain had previously done a “shoddy job” on the same project regarding civil works and NSSA had to contract another firm to fix things.

Mr Matiza said Costain was awarded the tender because it had submitted the lowest bid, which in NSSA’s view was not consistent with the cost of the project.

“Two weeks down the line Costain came back to say they don’t have money, just like that,” he said.

This led them to vary the contract so that they could advance Costain money. This saw NSSA incurring a penalty of US$800 while Costain was penalised US$10 000 by the State Procurement Board for varying the scope of the contract.

“Because we were advancing money to Costain, they had to pay interest on the money because instead of keeping our money in a bank earning interest and paying at the end of the process, we were now having to pay (for construction),” said Mr Matiza.

Mr Matiza said sub-contractors latter submitted bids whose totals were above the amount approved by the State Procurement Board. As such, NSSA went back to the board to raise the tender cost to US$32 million.

Sources said the cost had since escalated to around US$48 million, while NSSA has already made payments of US$35 million towards the project. - Herald