CDEDI Executive Director Sylvester Namiwa

LILONGWE-(MaraviPost)-The country’s social right body Centre for Democracy and Economic Development Initiatives (CDEDI) has challenged President Lazarus Chakwera’ Tonse administration to guard against forex externalization through awarding contracts to foreign companies when locals could do the same work.

The grouping observes that the tendencies of job importation is paralyzing indigenous businesses’s financial growth.

CDEDI call comes amid reports that Southern Region Water Board (SRWB)’s decision to award a contract to a foreign based bidder which the country will loose MK1.6 billion for the bid.

Addressing the news conference in the capital Lilongwe on Saturday, October 24, 2020, CDEDI Executive Director Sylvester Namiwa observes that the country is 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!”

Namiwa therefore asked the Chakwera administration 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”, says Namiwa.

He urges, “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”.

Below is CDEDI full statement on Southern Region Water Board (SRWB)awarding contract to foreign company:

LET’S STOP UNNECESSARY FOREX EXTERNALISATION AND JOB
EXPORTATION; CONSIDER THE INDEGENEOUS BUSINESS PEOPLE WHEN AWARDING BUSINESS CONTRACTS


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 US$16.3 million; Algahanim/Plem, which is
being offered the contract, quoted US$14.4 million; Sawa Group/Metito joint
venture priced its bid at US$21.7 million; Kuwait Dynamic Limited/Fisd
partnership offered US$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.
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