NSSA Gave A One Week Old Company US $16M Without Going To Tender

The forensic audit report released this week reveals that NSSA gave a one-week-old company US $16 million without going to tender. The report says the country’s social security company advanced the money to Housing Corporation Zimbabwe (HCZ) a company apparently owned by one Stephen Duggan and Adam Molai. Duggan is the CEO of HCZ.

The report covers the period from January 2015 to February 2018. HCZ was supposed to build 8,000 housing units but at the time of the report in 2018, no housing using had been built by HCZ.

HCZ got favourable treatment from NSSA after it was introduced to NSSA by the then Board Chairperson, Mr Vela. Mr Vela put pressure on NSSA officials to fast track the awarding of the contract. The favourable treatment to HCZ is evidenced by the following;

• The company was awarded a contract of US $304 million without going to tender when it was a week old (i.e. from date of incorporation).
• The contract was awarded without following NSSA due process. No due diligence or investment appraisal was done.
• HCZ had no track record of executing projects of the same magnitude.
• HCZ was given the contract despite not having title to the land.

Transactions

• NSSA entered into an off-take housing agreement with HCZ. HCZ intended to acquire 3 pieces of land for the purpose of constructing 8,000 (eight thousand) housing units. The housing units were to be constructed in phases of 2,000 (two thousand) over a space of 30 months. The contract had a cost of US$304 million which translates to US$38,000 per housing unit.
• NSSA paid a deposit of US$16 million towards the project.

The 8,000 housing units were supposed to be built in Caledonia. Some reports indicate that construction of the houses eventually began in mid-2018.

You can download the NSSA audit report here.