Diamond centre construction hangs in the balance

CONSTRUCTION of the Zimbabwe Diamond Technology Centre (ZDTC) faces a major hurdle after companies involved in the construction of the hub downed tools, before proceeding to sue the centre owner, Lovemore Kurotwi, over non-payment of US$5 million in fees and interest, the Financial Gazette can reveal. 

Billed as a critical contributory component in the nation’s minerals beneficiation plan, one of the key elements upon which the success of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) is hinged, a lot is riding on the successful and timeous completion of the centre.

Located in Mt. Hampden, on the outskirts of Harare, the centre has an initial plan to house 500 factories with each of them expected to employ 200 cutters and polishers as well as more workers for ancillary services.

Once completed, ZDTC is projected to create employment for more than 100 000 people; 1 200 of which can be employed in the first half of the year when Kurotwi says the centre’s construction would have been completed.

Its completion deadline is however, hanging in the balance following a dispute which has arisen between Kurotwi and the contractor, architects, engineers and quantity surveyors of the building, among other professionals.

In a case filed through the High Court under reference number HC 4972/11, Kenmark Builders Pvt. Ltd; Studio Arts Incorporated; NMC Consulting Engineers; Promantity Quantity Surveyors and Vanguard Engineering Services are suing for unpaid fees. As are Producan Investment Pvt. Ltd; Astra Steel & Engineering Supply Pvt. Ltd; and Pherosteel Pvt. Ltd in the same suit.

The nine plaintiffs claim Kurotwi, through his ZDTC, owes them a total amount of US$ 4 847 000 in unpaid fees and interest. According to court documents, ZTDC entered into agreements with each of the plaintiffs between January and July 2010 to provide services in the construction of the centre. Such services ranged from the actual construction, architectural services, consulting and structural engineering, quantity surveying to mechanical and electrical engineering as well as the provision of reinforcement steel.

Sources close to the matter say Kurotwi, who disputes the total amount claimed by the plaintiffs, only paid an initial establishment fee of US$281 000 and nothing else even though three certificates to certify progress of construction were further issued. Failure to pay by Kurotwi saw the team of plaintiffs downing tools and leaving the site in early 2011 before filing a suit in May of the same year.  The non-payment for the work done and materials supplied has financially cost the plaintiff companies considerably.

As a direct result of the non-payment, Kenmark Builders who was the main player and to whom all invoices of supplied materials were addressed has gone under liquidation.  At least 700 workers have lost their jobs from the liquidation.

“From the contractor side, 700 workers lost their jobs and some even lost their property,” said Daniel Madu, senior consultant architect with Studio Arts Architect. “How can other people be allowed to continue work on that site?  The design is our intellectual property. We have the drawings. We are owed and we should be paid.” Upon leaving the site, the original team took and withheld the architectural drawings.

Although the Financial Gazette was not able to verify by the time of going to press, there are also claims that Zvimba Rural District Council which allocated the very land on which the centre stands, is yet to be paid.

An undeterred Kurotwi is this year continuing with construction with another contractor, SM Builders, which, according to the plaintiffs, is in breach of the builders lien which forbids that another builder takes over the construction site without the consent of the former, in this case Kenmark Builders. In alleged breach of the lien, Kurotwi went ahead and invited the Parliamentary Portfolio Committee on Mines and Energy and gave a tour of the site, whose continued construction is in dispute in the courts.

Upon realising that construction had resumed despite the ongoing dispute, plaintiffs, two weeks, ago filed an urgent application with the High Court seeking an interlocutory interdict to halt construction. The court, however, turned down the plaintiffs arguing that the case was not urgent.

“According to the builders lien, until the dispute is resolved, the original team of contractors and professionals are in charge of the site,” said the plaintiffs lawyer, Jonasi Dondo, of Dondo and Associates.

Kurotwi’s lawyer, Tinashe Tanyanyiwa of Manase and Manase, argues that SM is not a new builder but that it has been part of the process from the beginning. Although efforts to contact Kurotwi were not fruitful, his lawyer said his client would not allow naysayers to derail construction of a centre of such national importance.

“It’s clear from the judgment (of the urgent court application) that justice demands that this project continues. The law has spoken and has spoken concisely. As for these so-called allegations, my clients will not allow the establishment of a centre of such national importance and economic magnitude to be derailed by prophets of doom who would rather see its failure than its success for the betterment of the mineral industry and macro-economic structure of the nation as a whole,” Tanyanyiwa said.
Kurotwi is no stranger to the courts.

This current case is just but one more addition to a string of court cases the businessman has been involved with in the past decade.  In 2012, Kurotwi and one Dominic Mubaiwa were hauled before the courts on allegations of defrauding the government of US$2 billion.  A few years earlier, Kurowi was named in a case where he implicated former mines minister Obert Mpofu for asking him for a bribe.

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