Ghost firm gets K7.8bn contract

• No trace for firm awarded power plant contract

The public procurement body’s website shows that a company named Black and Veach was awarded a lucrative consultancy contract for K7.8 billion.

According to information we have sourced, Black & Veach was hired by Kam’mwamba Coal-fired Power Generation Company (KPGC), which sought a ‘No Objection’ from the Public Procurement and Disposal of Assets (PPDA) to engage the firm.

PPDA website shows that KPGC awarded the contract to Black & Veach on June 22 2018 under the services category and as procurement of consultancy services.

KPGC—which government has dissolved after failing to build a coal-fired power plant at Kam’mwamba in Neno—hired Black & Veach to provide technical support, supervision and management of the power project.

But which lucky company is Black & Veach to win such a mouth-watering contract?

We searched.

PPDA—which gave a ‘No Objection’ for the contract in June last year—said in a written response last week that the information from the procuring entity, KPGC, showed that the firm was based in the United States of America (USA).

PPDA director general Elias Hausi, in an e-mail response, confirmed that the KPGC procurement came through his office and—based on their review—satisfied all requirements demanded by the legal framework in selecting the successful bidder.

The firm appears as one of the entities that was awarded a contract under the parastatal awards in the category of K50 million and above.

“Our records show that this company is registered in the USA,” said Hausi.

However, Black & Veach does not appear on PPDA’s website nor is it registered with it.

Even the US Embassy in Malawi said, in a written response on Thursday, that it was not aware of or involved in any US company bearing the name Black & Veach in Malawi, according to the Embassy’s Public Affairs officer Douglas Johnston.

The closest company to Black & Veach is USA-based Black & Veatch (with a ‘t’), which told Weekend Nation last week that it has no business dealings in Malawi.

In an e-mail response, Black & Veatch director of external communications, corporate marketing and communications Patrick MacElroy, after consulting its regional office in Johannesburg, South Africa, said Black & Veatch does not have a contract with KPGC.

“I’m not aware of a Black & Veatch entity in Malawi at this time, so our closest office is in Johannesburg,” he said.

Ministry of Natural Resources, Energy and Mining spokesperson Sangwani Phiri claimed last week that KPGC did not go into any contractual agreement with Black & Veach.

“What was it mandated to do? It should rightly be taken as a non-entity establishment and not known to or by our ministry,” he said.

“There was no such a contract worth K7.8 billion that was entered into by KPGC with any other company, including Black & Veach. This is drawn from the fact that any type of procurement which the company did or had was solely done by its own procurement team, without outsourcing such services,” Phiri said.

He said since its inception, the coal-fired power firm has spent a total of K1.3 billion, using its own procurement team and that much of the money was spent on office operations and compensation to the surrounding communities who are affected by the purchase of the land.

Weekend Nation could not establish whether KPGC paid any money to Black & Veach.

For two weeks, Energy Generation Company (Egenco), which took over operations of the dissolved KPGC, has not responded to our questionnaire seeking comment on the matter.

According to our search, Black & Veach does not appear on NCIC website as a registered company.

But a former senior manager at Kam’mwamba told Weekend Nation in confidence that the Black & Veach deal was concluded at the Ministry level.

“The PS for Energy knows, and is better placed to explain,” he said.

Secretary for Natural Resources, Energy and Mining Patrick Matanda explained that the contract was an Owners Engineer Contract, which was not issued after PPDA authorised it.

But he said he had no information about whether due diligence was done on the company because that was the job of KPGC. He also disputed the estimated amount of the contract, saying it was about $1 million (K780 million), and not K7.8 billion.

Matanda said the procurement process was cancelled because of funding uncertainties of the project.

The initial plan for the 1 000MW Kam’mwamba thermal plant involved construction of a 300MW plant comprising six units of 50MW capacity each in the first phase of the project with funds borrowed from China’s Export and Import Bank.