Theft of Public Money via Construction Contracts – Malawi

Nyasulu-Construction1

FROM A PROFESSIONAL ENGINEER’S POINT, SHARED WITH PERMISSION GRANTED

A road built to the highest standards in Malawi would cost about K160m per kilometre at the max nowadays. The K90m per kilometre would be a road where traffic volumes could be very low.

If the road in question is the Lilongwe Old Airport – Kasiya one, then I wonder how they came up with that K39 billion for the 95 km. As a Consultant myself, I would have accepted something like K20 billion. Not that crazy figure. Of course if my memory serves me right, the existing is low and requires raising to fight off drainage problems, but the additional K19 billion would build us another 95km road.

road_construction

In Malawi, we don’t buy gravel – which is the main component that will be used to build that road before surfacing. We only buy crushed stone which is used to construct the base. The only cost incurred in procurement of gravel is the mining process and a small compensation fee. If the average hovered at K260 million per km, I would have been more than pleased knowing we are getting a road at the right value. Trust me, a couple of billions will exchange hands at the end of the project. In a situation where Civil Works Contractors compete fairly, MOTA ENGIL would not be ranked the best Contractor, sadly, they are politically appointed. I’m fed up!

Mwamva inu @ Ackson Kalaile Banda, Jeith Mkwapatira Banda, Leon Matanda, Thomas Chafunya, Joloji Salijeni, Alick Kavikumba Nyasulu, Foster F. Fundi, Eisenhower Mkaka, Hon Jacob Hara, Rhino Chiphiko, Juliana Lunguzi and anyone who may share a concern.

Construction Sector Transparency Initiative (CoST)

Construction Sector Transparency Initiative (CoST) is an initiative recently launched in Malawi

Launching the CoST Malawi website, on Monday evening, Vice President of Malawi Saulos Chilima said that:

“I hope that respective governance structures, project implementing agencies and construction industry stakeholders will take this as an opportunity to demonstrate to the world that Malawi can be a shining example of good governance and prove to ourselves that it is possible to develop our country”

Chilima said he was committed to ensure that reforms incorporate CoST principles so that disclosures cover the whole value chain of construction activities in Malawi.

This is an interesting development in the construction sector in Malawi because as some readers will know, the Cashgate corruption scandal badly portrayed the construction sector in Malawi.

So one can only hope that the sector will fully embrace these reforms, because clearly there are advantages be realised.

However, lets look at the issue in a bit more detail.

According to CoST’s international website:

It is estimated that upwards of $4 trillion annually is lost through mismanagement, inefficiency, and corruption in public infrastructure – on average 10 to 30 percent of a project’s value. These losses have a negative effect on the quality, safety, and value of the built environment. Specific investigations have found much larger losses in some cases, including projects that were paid for but never built and projects that collapsed with injury and loss of life. 

In terms of inefficiency and mismanagement one can understand why the stakeholders would want better efficiency and management. It would reduce waste and introduce a greater level of safety.

But when it comes to corruption, I’m not quite clear why a sector that has struggled with endemic corruption for decades would suddenly want to reform itself, simply because it is being asked to publish details of the procurement process?

Let me put it this way, publishing the pre-contractual process could make it harder for corrupt officials to hijack the procurement of public contracts, but does it shut the door to corruption in procurement altogether?

Consider this scenario:-

Suppose a procurement committee had a preferred provider of certain services prior to publishing of a tender, by virtue of an inside secret agreement between officials, their boss, and this particular provider. A deal that would be of financial benefit to the members of that committee. What is to stop some members of that committee from secretly assisting the preferred provider to submit the strongest bid, one that fulfills all the conditions of the tender, and is likely to be the most attractive? What is to stop officials doctoring the process behind closed doors to ensure the preferred provider’s success? Especially if the help given, is given in secret?  What will guard against such a scenario?

I think it is more logical for certain checks and balances to be established as part of this initiative, to make it more ‘foolproof’. The Vice President Saulos Chilima must ensure that some additional measures are implemented in all public procurement dealings. For example, this initiative could go much further by demanding that no prior conscious contact whatsoever must have taken place between the members of the awarding committee, or an employee of the awarding body or ministry, and prospective bidders, when they knew a contract has been published. Further, to ensure that committees awarding contracts are formed from competent yet unconnected individuals, who do not work together, and have no social relationships, awarding committees should be made up of people from different sectors, who do not know each other, who do not work together, who are not part of the same social circles, who come from across the country, and who critically have declared their political support( i.e. they support different political parties). All this is important to make it harder for a conflict of interests to arise.

So as an example, if the Ministry of Natural Resources, Energy and Mining is considering publishing an invitation to tender for some goods or services it requires, an awarding committee could be made up of nine individuals:- two from the ministry itself, three from Civil Society Organisations, one ordinary member of the public, one from a religious organisation and two diplomats from different foreign consulars.

In my view, awarding bodies composed of such a makeup, although operating at a cost to the government, are highly unlikely to award contracts on political or regional lines, or in situations where a conflict of interest exists.

Further, while best practices can be imported from other CoST implementations across the world, the threshold in selecting successful bidders should be improved, so that only those with the highest rating, and strongest bids, as agreed by a large majority (at least 7 out of the 9) of the committee are awarded the contracts.

Finally, smaller players need to have their own categories, so that they are not disadvantaged merely by their size, when pitted against larger companies.

CoST Malawi is directed by a Multi-Stakeholder Group (MSG) that comprises representatives from:

  • Ministry of Irrigation and Water Development,
  • the National Audit Office,
  • Accountant General,
  • Director of Buildings,
  • Anti-Corruption Bureau,
  • Office of Director of Public Procurement,
  • Malawi Building, Civil and Allied Trades Association
  • Malawi Economic Justice Network,
  • Human Rights Consultative Committee,
  • Business Action Against Corruption,
  • African Institute of Corporate Citizens

All sounds good and well on the surface. Anyone can cobble together rhetoric and words that sound heroic and purposeful. But the implementation of this initiatives is what counts. The devil is always in the detail. In my view, the essential features  are not good enough. More needs to be done to prevent abuse of process like the scenario provided above.

Con Artists: Deception, deception and more deception

The typical con artist of the 21st Century is a puppet organisation whose employees have important sounding job titles, wear suits, have well manicured fingernails and sport pricey haircuts. None of that amateurish I have a gun give me your money or I’ll blow out your brains twaddle.

This morning, I found myself reading a hilarious article that suggested that the World Bank (of all the neoliberal outfits out there) was fronting some initiative designed to help Africa in preventing pricing irregularities of its minerals, in the process saving the continent billions of dollars?

Yeah, essentially that’s what it says…which is… how do I put it….dishonest, or at least not entirely truthful, if one is to be mild-mannered.

Yes, it will be good for people to know the actual price of their country’s minerals, but who exactly are we talking about here. Aren’t the prices of commodities evident and freely available to the public on international markets? Aren’t the people working in Natural resource departments of government agencies somewhat a bit more savvy (and knowledgeable) than the local man on the street? All you need is a computer (or even a mobile phone) and an internet connection. Don’t tell me government ministries of natural resources across Africa don’t have access to an internet connection to enable them to check the price of Platinum or Rare Earth Minerals on the international market…or are too incompetent to do so?

Which is why I think this initiative is merely a distraction. Having a map of your country’s natural resources and the cost thereof doesn’t immediately translate into physical or tangible gains. It doesn’t mean that you, the native, controls, owns or has the real benefit of those natural resources. Or does it?

At the most this is a PR stunt designed to mislead, a nefarious ploy to distract the people’s attention from the unfair, unethical and illegal state of play, where African resources are owned and exploited by foreign corporations who have no interest whatsoever in improving the lives of African people. It’s purpose in my view is simply to provide an illusion that something is being done, when the fact remains that nothing of any real substance is being done. It’s as hollow as announcing to the world that the UN is considering a resolution against Switzerland and other Tax Havens, to stop them receiving illicit funds from third world / developing countries, and then doing absolutely nothing else other than that annoucement….no action, zero! Meaningless.

So, you can mineral map the whole world if you like, but the locals in third world countries will still remain deeply afflicted by poverty, often going without, or with very little; there will continue to be poor or non-existent healthcare facilities, hunger and disease will continue to run amok, corruption will remain high, wars will tear the landscape and displace millions … as in the backdrop, an alliance of tycoons and wealthy billionaires multiply their wealth – their catalyst, a resource that should be owned by Africans, and yet isn’t.

How many African companies have contracts to mine minerals in North America? How many have contracts for oil extraction in the North Sea, or off the coast of Australia? What percentage of Canadians own Multimillion dollar companies registered in Canada? Similarly, what Percentage of Nigerian/ South Africans / Malawians own multimillion dollar companies in their own countries? Those are the questions the World bank or indeed any serious commentator should be asking, because addressing the disproportionate imbalances or anomalies in those questions is what has a far higher potential to reverse capital flight from Africa and third world countries. That’s what has a higher chance of improving the plight of the people of Africa. Not mineral mapping…or some silly PR stunt.

It can never be right, whether you have a mineral map or not, no amount of sugar-coating or window dressing will ever put that unfair state of play right. The truth is there has been a clearly indisputable economic unfair advantage gained by western countries (helped by wars, bad policies and stupid African leaders), and something serious must be done to reverse and rebalance the playing field. Half-hearted deceptive stunts fronted by agents of the neoliberal right will only harm the little sincere good that others are currently working on.

If you really want to know what this is all about, the ending of the article itself says it all:

BDs2

 

Ahmed Dassu Letter to President Joyce Banda

On Jun 7, 2013, at 2:42 PM, Ahmed Dassu wrote:

 Excellency

 I refer to your response to my request for an audience during your visit to London for the G8 summit, which was “not available. JB,” which appears both intentionally abrupt and unbefitting of your high office and public servant number one!  Therefore I feel it prudent to address in this email the issues I had wished to discuss with you had you granted me the audience, in order to avoid any misrepresentation or misunderstanding.

 That I share a passionate interest in Malawi and its future with my colleagues Edgar and Thom of Nyasa Times, as I do with many other Malawians is widely known.  Arising from this I had expressed to Edgar and Thom some concerns regarding recent political developments and the continued unabated and open corruption in the sector of public procurement, and asked if Nyasa Times would carry an opinion piece by me, expressing these concerns.  Instead both Edgar and Thom suggested that as you were travelling to London soon I should meet you, Excellency, to put across my concerns directly.  This is what prompted me to request an audience with you.

 Turning first to the political scene.  On President Mutharika death, although I had previously expressed deep reservations about your leadership in a TV interview on MTV, I was amongst the first to publicly demand that constitutional order should prevail, and that as Vice-President you should be sworn in as President.  I convinced others to do the same, including a person who had during President Mutharika’s administration been at the forefront of publicly humiliating you and who had publicly demanded press censorship – now a leading office-bearer in your party, the PP. 

 Indeed on your swearing-in as President, in common with a majority of Malawians, I considered this as a Godsend for a new beginning for Malawi; this conviction was further strengthened by the words of wisdom in your inaugural address to the nation – full of promise and hope.

 Sadly, in office instead of being the stateswoman we had all expected you to be, you practise the politics of marginalisation and victimisation based on whether one is perceived to be your supporter or not. Instead of honouring the high expectations we Malawians built up on your assuming office, your Presidency is built and sustained on the foundations of Members of Parliament, now transformed into political prostitutes who who have been induced to defect from their own parties to your party by patronage and corruption , which the high office of President enables you to practise. Given the opportunity I would have pleaded with you, Excellency that it was not too late for you to live up to the high expectations and hope for a new beginning that were aroused on your ascendancy to the highest office in the country.  That you should focus on how Malawians judge you and how they will perceive you in posterity, and be the stateswoman that the world assumes you are instead of the power hungry, corrupt, vindictive woman, engaged in theft of public funds and who will do whatever it takes to remain in power, which is what a majority of Malawians now see you as doing.  What we see is you practising the politics of marginalisation and victimisation, all glitter in orange with no substance where it concerns democracy, accountability and transparency. 

 You are not minded to accept that you were not elected to the high office of President, just as your party was not elected to govern.  It is blatantly obvious that you are subjecting Section 65 to the patronage and corruption to sustain you an unelected President, in office instead of leading Malawi by consensus.  You have followed in the footsteps of President Mutharika and set aside Section 65 by encouraging resort to courts in the usurping of the powers of Parliament. You have condoned and sheltered those ‘political prostitutes’ who have defected to your party. In a parliamentary democracy there can be no more damning indictment.  Sadly the Speaker himself has fallen victim to allowing the usurping of the powers enshrined in the Constitution for Parliament and become a political prostitute himself.

Turning now to the issue of business, I believe that Edgar and Thom had conveyed to you the need for the wiping out of corruption in government procurement so that companies like mine and others which were prejudiced during President Mutharika’a administration could be encouraged to submit competitive tenders for fertilizer and in other areas of government procurement and thereby reduce costs and improve delivery.  

 It may be foolhardy to ask you to recall, so in the light of what has since transpired, so permit me to remind you that as Vice-President you had publicly said that President Mutharika had institutionalised corruption in government procurement of fertilizer and that you would be exposing the corruption. So it was reasonable, your having implied President Mutharika was corruptly awarding government contracts to selective companies, that these companies were guilty accomplices in the corruption of which you accused President Mutharika.  However in office you have proved no less corrupt, in fact even more so, as immediately on assuming office you proceeded to award contracts for the supply of fertilizer to the very same Indian-owned companies, except for a black indigenous Malawian who, because of his tribe and colour, was identified as a supporter of President Mutharika, when in fact he was no more a supporter of Mutharika then were Abdul Master, Apollo or the other Indians who are paying you millions of Dollars in corrupt deals.

 Indeed the vast unexplained assets and resources now at your and your party’s disposal since you assumed office are ample evidence of the high level of corruption in your government.  I go so far as to challenge the very concept of the Supplementary Fertilizer Subsidy Programme as being a manifestation of the unprecedented corrupt practices and an instrument for the bribing of voters with corruptly acquired funds by you. For as if you were cheating children in a kindergarten you cloud your corrupt misdeeds by telling Malawians that “I personally and my friends will fund the fertilizer for the Supplementary Fertilizer Subsidy Programme”. Where will the funds come from? No doubt the public purse that you are busy looting.

 And who are these friends other than those who are awarded the government contracts by you corruptly?

 In conclusion let me add that I know that in writing to you I expose myself to your reknown vindictive nature and possible victimization by you.  But I shall persevere whatever consequences I am made to suffer, for the struggle for a better, democratic, free Malawi, free from the hunger for power of individual politicians like you have turned out to be, is one I have engaged in since 1972.  My commitment to Mother Malawi is for Malawians to judge.  Indeed, I am convinced posterity will judge me a far better citizen of Malawi  than contemporary politicians like you have done.

God Bless Malawi

 Ahmed Dassu

Source: The Oracle