Published: 02 December 2017

THE Central Mechanical and Equipment Department (CMED) has been fingered as one of the parastatals which have become a liability to Government by failing to discharge its mandate.

The parastatal, which was established in 2000, has over the past years been incurring losses due to botched deals and unpaid debts, legislators have said.

Presenting a report by the Portfolio Committee on Transport and Infrastructural Development after conducting an inquiry into the turnaround strategy of the parastatal, committee chairperson Dexter Nduna said they were concerned about the poor performance of CMED.

"The inquiry was motivated by the realisation that most state owned enterprises in general and CMED in particular, which were created to be self- financing cash cows for Government under the Commercialisation Act of 2000, were dismally failing in this regard. As a result, instead of assisting the Government in raising revenue and delivering quality service, they were repeatedly turning to Government for bailouts and thus becoming heavy liabilities on the fiscus while service delivery continued to plummet to an all-time low," reads the report.

Nduna said the committee was more concerned with the inordinate delay in the conclusion of the botched fuel deal which had cost both the organisation and the country a staggering $2,7 million in taxpayers' funds.

"The fact that such a serious case had taken over three years to finalise was a matter of grave concern for the committee. In addition, the committee noted that CMED was failing to effectively perform its mandate of providing transport and equipment hire services, procurement of vehicles on behalf of Government and fuel supply to Government," he said.

The committee heard that the Fuel Business Unit was still to recover $2,7 million lost in the botched fuel deal and the matter was still before the courts.

Legislators were told that the parastatal's 21 service stations had been re-opened and were operational but the entity was finding it difficult to supply fuel consistently due to the prevailing economic challenges.

"This had resulted in most government departments withdrawing from CMED in terms of fuel procurement, especially in the face of stiff competition from other private suppliers such as Puma, Total and Engen. Attracting private partnerships in fuel importation was also proving difficult due to the prevailing cash constraints," said Nduna.

He said CMED management told them that foreign investors were keen to invest in CMED but were being held back by uncertainty over whether they would be able to access their money from Zimbabwe.

Nduna said CMED was owed over $24 million by Government through its various user Ministries and $768 000 by Zec for vehicles procured for use during the 2013 harmonised elections.

The legislators were told that CMED's Easy Go Car Hire and Driver Training Unit was performing very well.

The Unit operates a fleet of 98 driver training vehicles comprising two buses, 22 lorries and 74 light vehicles and also has a private hire arm that provides transport logistics for all major government programmes and conferences.
- online

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