ACB moves in on K7.8bn ghost deal

The Anti-Corruption Bureau (ACB) says it will investigate the Public Procurement and Disposal of Assets Authority (PPDA) for giving a ‘no objection’ to a company in a K7.8 billion contract without ACB vetting.

In an interview on Monday, ACB director general Reyneck Matemba said in respect of the K7.8 billion contract awarded to a “ghost” company, the ACB did not receive any request from the PPDA.

He said the Public Procurement and Disposal of Assets Act gives the ACB the mandate to vet single source method of procurement or high value procurement in pursuant to the powers conferred on the bureau under Section 10 of the Corrupt Practices Act.

Matemba said: “We work with the PPDA in this regard in that the PPDA submits to the ACB, for vetting, requests for single source method of procurement as well as high value procurement before they [PPDA] grant a ‘No Objection’ to the procuring entity to award a contract.

“In other words, our records do not show that we vetted a company called Black & Veach in relation to the Kam’mwamba Power Generation Project. However, upon receipt of your questionnaire, we carried out preliminary investigations about this company and our findings indicate that the company is not registered here in Malawi and it is also not found on open source search.”

He said ACB will conduct further investigations to establish under what circumstances Black & Veach was awarded the contract.

“In this regard, we will, among other things, look at whether the Corrupt Practices Act, the Public Procurement and Disposal of Assets Act or indeed any other law was breached in the award of this contract,” Matemba said.

His sentiments come hot on the heels of a press conference Minister of Natural Resources, Energy and Mining Bintony Kutsaira addressed in Lilongwe on Monday where he disputed that such a contract was awarded as revealed by our sister newspaper, Weekend Nation, on Saturday.

And in a telephone interview after the press conference, the minister blamed PPDA for allegedly acting on wrong information when it posted on its website the awarding of the K7.8 billion contract when the contract was not completed.

He also said Kam’mwamba Power Generating Company Limited (KPGC) management did not follow the procedure when they engaged a foreign company without involving Ministry of Finance.

Said Kutsaira: “The contract was not awarded because the Ministry of Finance was not involved and the contract amount was too high. PPDA acted on wrong information.

But information The Nation sourced on the PPDA website under the list of parastatal awards of K50 million and above shows that KPGC awarded the contract to Black & Veach using Request For Proposal method on June 22 2018 under the services category. The contract was described as “procurement of consultancy services to provide technical support, supervision and management of Kam’mwamba Coal Fired Plant at the amount of K7 802 067 000”.

The minister’s assertions contradict what PPDA director general Elias Hausi told Weekend Nation that a ‘no objection’ was granted to KPGC to award the contract after identifying Black & Veatch as a successful bidder and that his office followed the guidelines spelt out in the PPD Act to vet processes followed by ministries, departments and agencies (MDAs) in procuring and disposing public assets.

Said Hausi: “We confirm that this procurement came through our office and, in our review, the evaluation process that Kam’mwamba Power Generating Company Limited followed to identify the successful bidder satisfied all the requirements demanded by the legal framework.

“As indicated above, our records show that this company is registered in the USA. You may wish to note that PPDA operates under a policy of zero tolerance to corruption and fraud.”

But the minister insisted that the contract was not completed as the board of directors cancelled it when it was discovered that Ministry of Finance officials were not included.

Said Kutsaira: “Even Black & Veatch was informed of the cancellation.”

In an earlier interview, Black & Veatch director of external communications, corporate marketing and communications Patrick MacElroy told Weekend Nation that Black & Veatch does not have a contract with KPGC and that he was not aware of a Black & Veatch entity in Malawi.

Kutsaira said he was in agreement with Black & Veatch position that the company had no contract with KPGC because the contract was cancelled.

During the press conference, Kutsaira also insisted that KPGC did not follow the procedures; hence, the contract was cancelled. However, the minister did not show documentation indicating cancellation of the said contract.

Kutsaira said that due to the complexity of the power plant project the need for an owners’ engineer was necessary and a must; hence, the board was appraised on the progress made so far in the procurement process of engaging the owners engineer for the power plant project.

He said nine firms were shortlisted after obtaining a ‘no objection’ from the PPDA and two firms—Black and Veatch and Desien Private Limited Consulting Engineers—submitted their proposals by March 23 2018, but only Black & Veatch sent a representative for the opening of the bids.

Despite Weekend Nation expressly indicating that the Black & Veatch with the letter ‘T’ was authenticated but denied having any business dealings in Malawi and that the one awarded the contract was Black & Veach without ‘t’, the minister accused the publication of using a wrong spelling.