The National Construction Industry Council (NCIC) has stopped China State Construction Engineering Limited from proceeding with works on the K7 billion Mzuzu University (Mzuni) library project for breach of requirements.
The stop order dated October 4 2020 and signed by NCIC acting chief executive officer Engineer Gerald Khonje states that the company breached requirements of subcontracting and joint ventures order.
Under Section 10 of the National Construction Industry Act (order of 2014), foreign construction firms wishing to provide services in Malawi are required to provide those services in association with a member practice or local firm.
The provision reads in part: “A member practice, whether in a joint venture or a subcontract arrangement, shall be responsible for a minimum of 30 percent of the works by volume and value.”
The order is meant to ensure that indigenous firms fully benefit from public procurement.
In a letter addressed to Mzuni Vice-Chancellor Professor John Kalenga-Saka, the contractor and Design Studio Architects, NCIC urged parties to suspend the project until the order is lifted.
The council warned of further action in case the order is defied.
The letter reads in part: “Due to this contravention, a stop order is hereby issued on the project. All parties are, therefore, ordered to immediately suspend all construction activities on the site until the stop order is lifted by the council.
“This stop order shall be lifted upon submission of satisfactory evidence of the compliance to the Subcontracting and Joint Ventures by Foreign and Malawian Construction Firms Order.”
In an interview on Wednesday, Khonje said the order was in force and should be complied with. He said any defiance would lead to revoking of the contractor’s licence.
He said: “Within the provisions of the law, assuming the contractor continues not to be compliant, we are mandated to revoke their licences and when we do that, and you will see soon we will be publishing names of contractors whose licences have been revoked, it means they will no longer operate in Malawi.
“If the company complies, the provisions in the law do not stipulate a penalty or fine in monetary terms. However, within the confines of the law, the project can be stopped, and if stopped, it has implications on progress of work and becomes costly.”
Nkhonje said NCIC is in the process of reviewing the law to provide for an attachment of fines for breaches of the requirements of the subcontracting and joint ventures order
Speaking on behalf of China State Construction Engineering Corporation Limited, Brad Chen on Wednesday said they have engaged NCIC and Mzuni on the matter.
He said his company subcontracted Fisd Limited on the Mzuni library project, but alleged that the local firm was not carrying out its duties on the site.
“It’s not that we didn’t subcontract to a local company. We did, but Fisd didn’t go to the site,” Chen said.
He added that the two firms signed an agreement to work on the project.
Chen said they have updated NCIC on the circumstances.
The decision on Mzuni library comes after the NCIC on August 31, issued nine (9) stop orders against some players in the industry that were using unregistered firms, using burnt bricks and had unsafe working environments.
In December 2015, fire burnt the Mzuni library and destroyed property, including the building, valued at K6 billion; hence, construction of the new one and an auditorium.