Lilongwe Water Board (LWB) has paid a contractor K239 million for pavement construction works mired in controversy.
Records Weekend Nation has seen indicate that LWB has honoured three invoices from the contractor, Sawa Group, totalling K239 million based on a variation order—an instruction stating that the scope of work in a construction contract has changed in form of an addition, substitution or omission.
LWB chief executive officer Alfonso Chikuni claims the pavement works were part of a contract that the World Bank previously funded.
“When the project came to an end, the board resolved to just extend the contractor’s work. This is allowed because we had a defects period of two years,” he said.
Chikuni tasked the company’s officials Ronald Gundamthengo, a projects engineer and Steve Kazembe, the acting procurement specialist, to take us through documents related to the project.
However, they did not provide us with details of the World Bank-funded contract, to prove claims that the pavement works were leftovers from the project, citing legal complications and that the document was confidential.
But World Bank communications officer Zeria Banda said in an e-mailed response on September 14 2017 that the World Bank funded project which ended in 2015 had no component for the construction of pavements.
“Through the NWDP, the World Bank financed works on the water treatment plant at a cost of $8.7 million. Part of the funds were used for constructing an access road to the treatment plant. All this was done before the project closed in October 2015. The contractor had a defects period of 12 months, ending October 2016.
“Ordinarily in construction, during the defects period the contractor addresses any defects that could arise on the work done. The construction of the pavement in question was not part of the scope of work under World Bank financing,” she said.
Two sources who were members of the LWB’s Internal Procurement Committee (IPC) alleged that the committee was just issued the variation order to rubber-stamp.
The sources said the variation order was presented to the IPC as an addendum to the World Bank contract.
IPC minutes we have seen also show that the committee was only requested to rubber-stamp the variation order after the CEO had signed it, and when the contractor had already commenced the works.
According to the minutes of the IPC meeting held on August 11 2016, the matter came before the IPC under item 4.5 as: “Additional quantities of Paving Works under TWII Extension Work Contract”.
It reads: “There was a requirement of completing paving works after quantities [11, 900m2] authorised under NWDP II were exhausted, additional quantities were 8 293m2 which the contractor was allowed to proceed to work on.
“The IPC was requested to ratify the instruction and that the related costs were to be borne by LWB. IPC approved the instruction.”
A source familiar with the relevant statutes governing the board’s procurements, said this was wrong on many aspects.
The source said the decision contravened public procurement laws while lack of competition through open bidding left the board vulnerable to abuse through overpricing and outright corruption.
Said the source: “Sawa was initially contracted to construct a water tank which is building works while the pavements project is a civil works project. You cannot have a variation order on such different projects.
“Secondly, the first project had a financier, which was the World Bank and this was a totally separate arrangement.”
“This brings us to the first challenge with the law; LWB has a threshold of K60 million [which has now been reduced to K30 million] as the amount of goods or services it can procure without seeking ODPP approval. For anything beyond K60 million, LWB has to request approval of ODPP through a ‘No Objection’ request. This was not done.
“Then there was no competitive bidding for this work. This raises questions of how and who selected the company because all procurement for LWB is supposed to be done by the IPC, which was not consulted,” said the source, speaking on condition of anonymity.
According to the source, the pavements deal amounted to single sourcing, which the Public Procurement Act restricts to emergencies.
“We are now seeing contracts being awarded on a non-competitive basis. The initial contract was closed.
“The issue of competitive bidding allows you to save resources; you pick the one lowest evaluated bidder after meeting the specifications,” said the source.
He said in any major contract there are supposed to be independent consultants, but in this case there was none.
“The role of the independent consultant is to supervise the quality of the material, quality of workmanship, vet the payment certificates on whether what is on the ground tallies with invoices,” said the source.
In a follow up interview on Wednesday, Chikuni insisted that the pavements were part of the World Bank project.
“They [World Bank] are not entirely correct because the bill of quantities for the contract will show you that the pavements were part of the contract. This part was not however completed so it’s the remainder of the contract which they completed later,” said Chikuni.
ODPP told project funded by World Bank
ODPP director Paul Taulo confirmed the department was consulted on the matter, but he said LWB stated that the pavements were part of the World Bank-funded works.
“According to the information made available to this office, the procurement in question was funded by the World Bank under the National Water Development Programme. As such, all procedures were followed and any subsequent approvals made were done by the donor,” he said.
A procurement specialist and outgoing president of the Institute of Independent Procurement, Eddington Chilapondwa, said in a written response, the variation order is usually stated in the bidding document; the contract states the percentage that could be effected and does not apply to fully completed projects that have been handed over to the client.
He also said all order variations beyond the stated limit in the bid data sheet are supposed to be approved by the IPC.
Sawa Group director Yassar Choudry showed us the Variation Order and insisted that his company did not do anything wrong.
In a written response to the Weekend Nation questionnaire, Choudry said the company was satisfied it had a legal contract with LWB based on the World Bank project which had an addendum to include the pavements project. n