Several business deals signed by City of Harare (CoH) with private investors are under scrutiny following damning allegations of serious misconduct by some of the City’s business associates.
In particular, many councillors are now demanding an inquiry into CoH’s agreements with Augur Investments after ongoing court cases against Augur revealed various instances of dubious dealings. Following these revelations, Council’s Business Committee recently tasked Acting Town Clerk Josephine Ncube with investigating the operations of the joint ventures, and compiling a report amid concerns over the implementation of business agreements.
In 2013 CoH and Augur Investments set up a joint venture company called Sunshine Developments (Pvt) Ltd to handle various projects, including the construction of the Harare International Airport Road. The city has allegedly already transferred over 700 hectares of land valued at between $15–20 million to Augur as payment for a project that ultimately, was never completed.
The Airport Road project has long been mired in dispute. The deal was originally signed in 2008 and was expected to take five years to complete, in time for the UNWTO conference in 2013.
In addition to allegedly not meeting their end of the deal, minutes from a meeting of the council’s Business Committee also suggest that Augur was awarded the contract without it going to tender. In response, Augur accused the council and service providers such as ZESA of delaying the project. They claimed to have spent $20 million by the time they halted work, and that they no longer had the funds to complete the job. The council in turn accused Augur of over-pricing aspects of the construction and of failing to meet the specified conditions – in particular, of failing to complete the project within the agreed time frame.
After several years of disputes culminating in an acrimonious court case, Council terminated Augur’s Airport Road contract and handed the project over to the Department of Roads Management. To date, the road is still incomplete – eight years after the contract with Augur was signed.
Councillor Peter Moyo, chairperson of council’s Business Committee, confirmed to Harare News that Augur Investments were given tracts of land in Harare as part-payment for the road project. Moyo described Augur Investments’ subsequent undertakings under the agreements with the council as fraudulent.
“They don’t act in good faith. They don’t comply with what is agreed upon. The initial reports submitted to the Business Committee by the Acting Town Clerk show a lot of anomalies,” said Moyo who would not elaborate further. When asked how CoH plans to address the alleged breach of contract by its business partner, the councillor said the matter would be determined by council. In 2014 it suggested that the land transfers might even be reversed once the agreement was dissolved.
Other projects involving Augur Investments include:
The development of the mall on the Borrowdale wetland has been particularly contentious with residents and environmental groups strongly opposed to the project which threatens the vlei and thus the city’s water supply. Construction has already begun in Borrowdale, although there has been little progress. The other projects are pending and under present circumstances, may not get off the ground, in part due to increasing misgivings about whether Sunshine Developments complies with Zimbabwe’s Indigenisation Act. Augur investments holds a 70% stake in the company with CoH holding just 30%. Augur Investments is an Estonian company registered in Mauritius headed by executive chairman Ken Sharpe with local representative and co-director Mike van Blerk.
Image: Ken Sharpe and Mike van Blerk of Augur Investments