In a twist to the poor quality of vehicle registration plates, the Competition and Fair Trading Commission (CFTC) has fined two State entities for engaging in anti-competitive conduct over the deal.
Besides fining the Directorate of Road Traffic and Safety Services and Malawi Bureau of Standards (MBS) K500 000 each, the commission has also asked the Anti-Corruption Bureau (ACB) to investigate why Motor Vehicle Spares & Accessories (Movesa) was allowed to supply blank retro-reflective registration plates despite the product failing the test.
The commission’s determination dated March 28 2022 jointly signed by CFTC board chairperson Commissioner Jerry Jana and technical committee chairperson Zacc Kawalala followed a complaint lodged by another prospective supplier, Bulldog Spares, over the anti-competitive conduct by Road Traffic and MBS during the blank number plates conformance tests.
The commission noted that Movesa and other bidders failed the conformance tests in 2016 yet Road Traffic and MBS allowed Movesa to import a consignment whose pre-shipment sample had failed the test.
The commission further determined that Road Traffic engaged in anti-competitive conduct by influencing the granting of a waiver to Movesa to import a consignment of number plates whose sample did not conform to the mandatory Malawi Standard 639:1.
“The actions by DRTSS and MBS in this regard provided Movesa with an unfair advantage against its competitors, including Bulldog, thereby affecting competition on the market and was therefore in violation of Section 32 (1) of the CFTA,” said the report.
A Nation Publications Limited five-month investigation, which was validated by a CFTC inquiry, also established that both MBS and Road Traffic cut corners to allow Movesa, a company owned by Mohsin Salim, to be the sole supplier of blank plates.
In a letter dated December 13 2016 to Bulldog Spares, former MBS director general Devlin Chokazinga asked the company to dispose of all the plates which failed to pass the test.
While Movesa was allowed to supply even the plates that failed the test.
Our findings show that Movesa started supplying blank plates to Road Traffic in 1999 and this was earlier confirmed by former Road Traffic director Jack Manong’a in an interview with The Nation.
Road Traffic spokesperson Angellina Makwecha asked for more time to verify the stated arrangement.
The Nation analysed some of the blank plates Movesa supplied against the current Malawi Standard of number plates MS 639-1:2-13 which is a revised one from MS 639-2-2011.
In the analysis, it was observed that Movesa’s plates did not meet some set terms.
On why Movesa was allowed to continue supplying, both Makwecha and MBS spokesperson Monica Khombe refused to comment.
They indicated that the issue was in court as well as before the CFTC tribunal legal process.
In a written response via e-mail, CFTC spokesperson Innocent Helema said the commission does not enforce standards, as such, was not the correct entity to comment on why Movesa was allowed to import substandard plates into the country.
Movesa’s Salim on Thursday said he could not comment as he was outside the country.
From the book of standards and on workmanship, it was indicated that when examined in accordance with Section 7.1, the retro-reflective material and border of a blank plate should be free of creases, chips, blisters, discolouration and spots. However, hundreds of vehicles plying the streets of Malawi are seen with discoloured plates as well as creases and some chips.
There are also numbers without luminance factor as stipulated in Section 4.3.22 of the Malawi Standard while others are not resistant to weather as stipulated in Section 7.7.1.
The Nation also observed that some number plates lose colour due to exposure to sunlight.
According to Section A.2.4 of the Malawi Standard, colour for hologram on number plates should be silver, but we observed that some plates are yellow while others have no colour.
In its determination, the commission faulted Road Traffic, MBS and DRTSS for engaging in decisions and concerted practices that resulted in the prevention, restriction or distortion of competition in the importation and supply of blank number plates in Malawi in 2017 in violation of Section 32 (1) of the CFTA.
The commission further ordered Road Traffic to allow other number plates dealers in Malawi to supply in accordance with the law and regulations in force.
In its complaint, Bulldog Spares claimed that in May 2015 they applied to MBS to become a blank number plates importer and got a pass test report on May 25 2015.
The company said on April 14 2016, Road Traffic issued them company its importation licence copied to MBS allowing them to bring in retro-reflective blank number plates as well as serial numbers to be used.
In 2017, Bulldog lodged a complaint to CFTC that “the parameter used to test the consignment sample was different from the parameters used to test the pre-shipment sample” as stated in the import licence issued by Road Traffic.