The Centre for Democracy and Economic Development Initiatives (CDEDI) has been called to duty once again following an article carried in The Nation newspaper published on Friday, 23rd October 2020 under the headline “MK10 Billion Water Project Deal Raises Eyebrows.. SRWB leaves lowest bidder with MK1.6 billion difference.”
Right at the onset, CDEDI would like to applaud the Southern Region Water Board (SRWB) procurement staff for their dedication and commitment in the way they have handled the procurement process, reaching this far.
However, going through the newspaper article, CDEDI and indeed all Malawians that mean well for this country, will be at pains to let this project go at a cost of MK1.6 billion more than what the lowest bidder had offered. The multi-million Kwacha contract is being awarded at a time when the Malawi government is struggling to provide essential services to its citizens such as drugs in our public health facilities across the country. The country is further struggling to offset the huge external debts from international financial institutions, and yet SRWB can afford the luxury of offering a contract to a very expensive bidder! It is a well-known fact that the loan for the project from the Kuwait Fund for Arab Economic Development, will be paid using taxpayers’ money. It’s high time the country started reducing its external debts through prudent use of funds, and not by being extravagant, thereby exposing Malawians to more untold misery!
We are aware of the technicalities in the procurement process that have enabled the SRWB to award this bidder with the highest pricing offer. However, the reservations that have been expressed by the local procurement experts, have prompted CDEDI to speak out on the matter.
What is more surprising is that the SRWB evaluation report, which the newspaper was privileged to have gotten hold of, shows that the lowest bidder “passed both preliminary examination and detailed technical evaluation, but was not picked purportedly because the bidder’s pricing offer showed lack of understanding of the “technicalities and complexities of the project. Such a justification has been shot down by a local procurement expert who says that at financial stage, the evaluation should’ve considered financial related matters and not technical issues. From this school of thought, it is crystal clear that some corners have been cut!
Investigations conducted by CDEDI have revealed that this lowest bidder has done a similar job for the SRWB before, an indication that the bidder is well conversant with the job in question, if the bidder’s track record is anything to go by.
According to the newspaper article, Jiangsu Suzhong Construction Group Company Limited, made a bid of $16.3 million; Algahanim/Plem, which is being offered the contract, quoted $14.4 million; Sawa Group/Metito joint venture priced its bid at $21.7 million; Kuwait Dynamic Limited/Fisd partnership offered $12.3 million.
What the SRWB has done by wholly awarding a contract to a foreign based company, has taken us back to a letter dated 21st September 2020 addressed to the minister of health, in which CDEDI pleaded with the minister to consider taking head of the advice from the office of the Director General, Public Procurement and Disposal of Assets Authority (PPDA). A circular from the PPDA, Ref. No. PPDA/01/22 dated 1st July 2019, addressed to all Principal Secretaries, Chief Executives of Parastatal organizations under the headline “APPLICATION OF SECTION 44 (10) OF THE PUBLIC PROCUREMENT AND DISPOSAL OF PUBLIC ASSETS ACT (2017)” states that a procuring entity shall ensure prioritization of all bids submitted to give preference to 60 percent indigenous Malawians and 40 percent others for national competitive bidding. In a layman’s point of view, this guidance was given by the PPDA in the spirit of empowering local businesses in the country.
What the SRWB has done to award a contract to a foreign based bidder, is similar to a decision made by the Ministry of Health to award a contract to a foreign based bidder to supply ambulances to the ministry.
In both scenarios, these decisions are being made under the administration of the Tonse Alliance government. In the SRWB scenario, the decision to award a contract to a foreign based bidder has been made at the watch, and/or with consent from the parastatal’s cohort of board members who have just been recently hired by President Dr. Lazarus Chakwera. Ironically, the Tonse Alliance government was ushered into office on trust that the administration would honour its promise of creating 1 million jobs in the country. On the contrary, the 1 million jobs are now being exported to foreign based bidders, and in the process the country is also losing the much-needed forex.
CDEDI is, therefore, reiterating its stance on empowering the indigenous business people such as the local contractors. We are also of the view that pairing the local contractors with the foreign based contractors would ensure skills transfer and capacity building, as these companies would share responsibilities, while ensuring that local contractors have a bigger chunk of the work, and that the foreign based contractors only offer technical expertise, thereby reducing costs in the process.
This appetite for foreign based contractors by the Tonse Alliance government has reminded us of similar strategies employed by the previous regimes, as a way of siphoning money from the donor partners by some selfish politicians and individuals. CDEDI and all well-meaning Malawians will not be surprised to see this corrupt tendency resurfacing in the Tonse led administration, which has just taken over from where their predecessors had left.
CDEDI is, therefore, appealing to government to consider coming up with a deliberate policy to avert the incidences like the one at hand in order to meaningfully address the crisis of high unemployment levels among the youth, and improve the Gross Domestic Product (DGP) for the nation.
It is against this background that Malawians who are taxpayers, and CDEDI as an advocacy institution feel duty bound to demand the SRWB to reconsider its decision to award a contract to a foreign based bidder, and save MK1.6 billion. SRWB should further consider waiving some procurement procedures to enable local contractors to have a fair share of the project by either awarding them the contract wholly, or pairing them with the foreign based contractors, in the spirit of promoting the indigenous business people, and abiding by the Tonse Alliance philosophy.
Lastly, but not the least, CDEDI is asking the Anti- Corruption bureau to zero in and investigate the whole procurement process at the SRWB, since it looks very suspicious, and with very flimsy justification from the concerned staff at the parastatal.