The delay to roll-out the K50 billion Phase IX of the Malawi Rural Electrification Project (Marep) will result in fewer people benefiting and cost 40 percent more due to rising cost of materials.
Ministry of Energy deputy director responsible for rural electrification Patrick Silungwe admitted in an interview this week that electrical materials are prone to price variations, adding that since over 95 percent of the materials are imported, any change in the value of the kwacha to the dollar affects cost of materials.
He said: “Delays to roll-out the programme will have negative impact on the budget for procurement of materials and implementation of Phase IX as a whole. The amount of money which was budgeted for will not be able to buy the same quantity of materials today as it would have done say six months ago.”
The ministry’s director of energy Cassius Chiwambo estimated that the delay in implementing the project will cost the taxpayer 40 percent more due to rising cost of materials.
Some of the materials include transformers, conductors, bolts and nuts, disk insulators, pin insulators, copper wires, stay wires and energy meters.
Implementation of the programme, which was to run from October 2020 to April 2021 to connect 575 sites, has been halted three times since June 2020 when the Tonse Alliance administration came to power.
Silungwe estimated that, on average, one site connects 60 households or units, meaning that from the 575 sites, the project was expected to connect electricity to about 34 500 households.
The programme suffered the first hitch in July 2020 following a government stop order on all procurement contracts, to enable the new administration carry out an audit of prospective contracts and ascertain their transparency and credibility.
But the validity period for the bids expired on March 16 2021, before the audit was concluded. This resulted in the Public Procurement and Disposal of Assets Authority (PPDA) director general to decline extending the bid validity period on June 7 2021 as the ministry had made the request outside the required period.
In June this year, the Anti-Corruption Bureau (ACB) also cancelled the contract amid corruption allegations.
In September, ACB released findings of its investigations which revealed that the ministry flouted procurement procedures by inviting bids without involving the internal procurement and disposal committee (IPDC), contrary to Section 26 (2) (h) of the PPDA Act (2017) as read with Public Procurement Regulation (2020) 10 (1) (a).
The bureau also found that some support staff took part in the bid evaluation exercise, which is against rules of bid evaluation and that there was undue influence from some of the ministry’s senior officers to have some bidders favoured at the expense of others.
ACB, therefore, recommended the procurement process to start afresh, according to the letter.
“Meanwhile, the bureau is finalising the investigation report. Further decisions arising from the report will be made known in due course,” further reads the ACB letter.
Asked on when the re-tendering process will commence, Chiwambo said government wants to fast-track the process to six weeks.
“We want to do one week for advertising and then three weeks for evaluation, and two weeks for the PPDA board to meet and make approvals,” he said.
Marep started in 1980 under Escom as the implementing agency through donor financing. In 1995, the Government of Malawi took over implementation of the programme with the Department of Energy as the implementing agency.
By the end of Phase VIII, Marep had connected 1 127 sites to the national grid. In the past 10 years, K80 billion has been invested in Marep.
The 2008 Energy Policy anticipated an increase in electricity coverage in Malawi to 30 percent by 2020. However, statistics show that only about 12 percent of the population has access to electricity.