Escom’s $10m contract goes to Rousant International without tender: Locals smell cashgate

The Electricity Supply Corporation of Malawi (Escom) has once again attracted the wrath of local companies following revelations that the utility service provider has given a contract to Rousant International Limited to supply poles without advertising the tender to allow competitive bidding.

Mlomba : We need to join hands

Mlomba : We need to join hands

The trading company, believed to be a South African, is buying the poles from Zimbabwe and was given a contract worth about $10 million to supply the materials.

Rousant International Limited is a highly successful and experienced trading company in the supply of electrical transmission and distribution equipment and components to power utilities, contractors and construction companies in Africa.

Inside sources, who asked for anonymity, confirmed the development, but quickly pointed out that it was a “restricted tender” that does not require competitive bidding.

According to the Procurement Act, Restricted tender may be held when the goods, works or services are only available from a limited number of suppliers, all of whom are known to the procuring entity or when the time and cost of considering a large number of tenders is dissproportionate to the value of the procurement.

The sources claimed that local investors do not have the capacity to supply the poles and that they supply materials of low quality, hence the decision to pick Rousant through “restricted tender”.

“Its true, Rousant was given the contract to supply poles following Escom’s commitment to connect more customers.

“Restricted tenders are given to suppliers or contractors with good track record in terms of delivering the required materials in time and of quality,” said one of the sources privy to the matter.

He also claimed that at one point two local companies (name withheld) were given similar contracts to supply poles, but they failed to supply the materials, and this according to him, did not only stifle Escom’s operations, but reflected badly on local suppliers.

“Those claiming that there is corruption at Escom are just bitter. All activities to do with competitive bidding including restricted tenders are duly done and vetted by the Office of Director of Public Procurement and the Anti-Corruption Bureau just ensure that contractors and suppliers with good record are given the contracts,” he justified.

Another inside source also claimed that procuring entities are responsible and that competitive bidding is done in accordance with the Procurement Act and other applicable laws, regulations and applicable instructions from the ODPP.

He also observed that local business operators do not succeed in bidding process due to mispresentation of facts and lack the “technical know-how”, apart from failure to meet the requirements.

The source, however, admitted that the Act mandate them to communicate to unsuccessful bidders the grounds for the rejection of their applications.

Commenting on the matter, one local business operator, who also asked for anonymity, denied claims that they lack the technical know-how, but rather they are being choked with hefty upfront payments from procurement officers.

He alleged that Escom officials, mainly those at the Procurement Section demand upfront commission from the bidders and this conduct disadvantage local investors as businesses of Malawians of Indian origin have got an edge over indigenous business operators.

“One business man was asked to pay K31 million upfront so that he would be awarded K600 million worth of order.

“He had K3m only and he paid but he has failed. Indians will always be stars because their wealth passes over from one generation to the other.  Malawians start from the scratch and that’s why almost all of them are stuck in debts. 90% of the bad debts in Malawi Banks are indigenous Malawians,” he lamented.

Indigenous Businessperson Association of Malawi (IBAM) president Mike Mlombwa declined to comment on the matter, but faulted local investors for being uncooperative.

“IBAM is not for Mr. Mlombwa. Its for all members and local investors, but people have just placed the burden on me.

“There is lack of support, no wonder people think IBAM is for Mlombwa. My interest was to advance the interests of all Malawians doing business in the country, but some are failing to appreciate the commitment I have been demonstrating in pushing for deliberate policies for the betterment of local investors,” said Mlombwa.

He said “he has nothing to lose” and will focus much on his business establishments.

“Unless we join hands we will continue crying and groaning for fair competition,” he added.

Follow and Subscribe Nyasa TV :

Please share this Article if you like Email This Post Email This Post

More From Nyasatimes

More From the World

25 thoughts on “Escom’s $10m contract goes to Rousant International without tender: Locals smell cashgate”

  1. Rousant says:

    We are crooks. We are taking advantage of sleeping Malawians.

  2. Rift valley says:

    Tell me. Which local company, apart from WICO and Raiply can supply poles? Do you think ESOM can proceed with such an Expensive order without Directuraxte of Public Procurement knowing? Come on Malawians. Let ESCOM fast tack some procurements to expeditiously reduce the new connections backlog.. Next we will hear the same people complailing about ESCOM’s inefficiency.

  3. thumbwe man says:

    Can ACB plis, plis, plis and i say pliiiiis not only investigate these poles but all previous tenders Rousant has supplied to our Escom and also closely check the Transformers it supplied two years ago if they are still specifically doing its purchased purposes and how the award took place. ACB should also investigate Rousant, a briefcase company without any factory in RSA has to be winning so huge tenders in Malawi than well established companies in RSA. Search me Rousant are terrible crooks.

  4. Malawi at 51 says:

    There is no evonomy in Africs that grew eith Indians. They dleep in shops in centrsl towns. Very few like HTD invest in nice buildings. Ambiri mu Limbe they sleep pamwamba pa dhop. I know 5 Indians whose daily leaving is forex trading. U give them Malawi Kwacha and same day you have Tands in RSA or USA. They do not use an official RBM approved forex centre NO.

  5. Indigenous Malawian Mwenye says:

    Why is everything being pointed to Indians rousant does not belong to an Indian and do you some Indians are 5th generation born and bred Malawians how more indigenous can they be.
    I am Malawian and a mwenye to bad if you can’t digest it.

  6. Nsendekere says:

    Poles are poles from Bluegum tree and not designed and made by man from unnatural material. And coming to think of it, if a local company was chosen to supply, they could have bought part of the consignment from Chikangawa Forest, thereby reducing required forex

  7. Bomanile says:

    Should even supply of poles contract go to a foreign company? I would understand if it was some technical works. We Malawians must love our country and not our own tummies. ACB should investigate.

  8. kamfana says:

    We have got enough Bluegum Trees in our country,why are u going outside the country?
    Also so many Local Companies in our Land,Why going for Foreign Companies?

  9. ndagoma ndidziko says:

    This is a well written story. The facts are that it is true that Malawians want to provide substandard works or goods and a lot of shortcuts. Within no time the pot holes are back then we start pointing fingers at the authorities. Look at the escom concrete poles along mbayani on the road to chileka. Crooked and ugly. Thats local for you.

    We have to improve to compete. We are also not honest in our works. If we stop paying bribes and report those asking for bribes we will level the playing field.

    the ball is in our court.

  10. Malawi at 51 says:

    John do you really beilive that even Indians would not have the muscle to supply these poles. Why an RSA company. Who says because you are trading in 50 countries you cant bribe. These rousant people are bloody crooks ever.

    Lets accept reality something is not right in Malawi. Escom would rather give Rousant than gossiping Malawians. Mlombwa yekha sakwanitsa.

  11. This Is Malawi. says:

    Our trees are for charcoal.

  12. Mafuta says:

    Malawian companies should learn to compete at international level and don’t compromise On quality and standards. Learn this and you won’t feel aggrieved

  13. Honest Dealings says:

    I would agree with Mlombwa if Malawian businesses were honest, and delivered what was required and not substitutes.

    Once beaten twice shy.

    You want to be selling the same item more than once. Deliver it have it stolen and deliver it again.

    All this has to end. In any case it is probably cheaper to buy stuff direct.

    If ESCOM is asking for bribes why not report to ACB, unless the Malawi traders initiate these practices.

    We always complain about “Its our taxes” then how can it be all right for Malawian traders to misuse it it.

  14. shaaaa! says:

    mbava.kkkkkkkkkkkkkkkkkkkkk

  15. Charombanthu says:

    Escom, you mean Malawians cannot supply poles (mitengo yomweyi)? Would they not be able to get them from Zimbabwe just like the South African company has pledged to do? We import anything anyway. Bodza ili, mwadyapo pamenepa. Who supplied all these poles that are in the country? Was it Rousant Int? If Malawians supply substandard items, why didn’t you advertise to the foreign companies so that they should also tender? What is special about Rousant Int? Is this the only international company out there? This smells Cashgate….

  16. Nangozo says:

    I agree with Mr Mlombwa. We Malawians will continue to suffer because we do not speak with one voice. Tidzingoponderezedwa ndi anthu obwera. In other countries it is the indigenous business owners who enjoy most of the big contracts. For outsiders to win contracts in such countries, they are conditions which ensure that indigenous owners benefit some shares. I wish they were 100 Mlombwa type of people in Malawi.

  17. Tembusha says:

    Indeed this is a well researched story and university of Malawi can learn a thing or two about research from it?

    Malawians want 1000% profit and promise procurement officers 10% of the contract amount!

    But if ESCOM knew that the poles are sourced from Zimbabwe then it was even better to go directly and buy from the producer.

    Akakhala a Mlombwa vuto lilipo ndi losaponda mkalasi asiyeni choncho!

  18. John says:

    People, please see the link http://www.rousant.co.za To me this sounds like sour grapes… some people lost on price and technical know how and instead of trying to improve they are crying corruption.

    Rousant is not a local company… its South African and it doesn’t just deal with Malawi but in 15 countries in total… do you think they are bribing there… check out the directors of this company…. don’t sound like they have anything to do with this article

    People, why do we have to be so negative

    1. JJB says:

      I suggest people look at the link you have provided.

      I do not believe Malawian businesses can provide quality.

  19. captain says:

    I like the words, Malawians start from scratch, 90%of bad debits in our banks are indigenous and Indians wealth start from generation to generation. That’s 100% starting point for government if they really know where to start from

  20. chinena says:

    Why didn’t ESCOM buy the steel poles from Zimbabwe? It would have been cheaper to buy from the manufacturers and it would also have been cheaper on transportation!

  21. Kandapo .Man says:

    These allegations point to Kandapo. Its only him who can reverse the situation for Malawians yo start benefiting on top of rich Indians and foreign companies

    SHOW ME AN INDIAN WHO HAS EMPLOYED A QUALIFIED ACCOUNTANT and give him a car. There is none becuase they nelieve in cheap labour to save money for sending home. Malawian companies know that a bag of maize K8000 and there is no way they can pay K5000 to a fellow Malawian. Imdians donybcare.

    The very day Kandapo makes a decision to support Malawians who are very poor and cannot manage a tip before delivery and payment Malawi will change. Try them. No country on earth has a sound economy by oppresing indegenous businesses. Penapake Mlombwa is right and he needs suport. Amalawi miseche majelasi kaduka.

    I cry for Malawi. Bwana President please intervene. This Rousant guy will on pay duty if at all there is but rest of the money go to Xenophobic RSA. If it a Malawian company the $10m would help a lot of people including mahule. Lets be patriotic. RSA economy did not grow with Indians but locals.

  22. toxic loan boy says:

    penapake anthu tisamayesane udyo. tsiku lina kumalawi kuno kudzachitika zoopsya. mark my words

  23. zte says:

    aaa ha ha malawi ayayaya.

  24. Koma Abale says:

    Nyasa for once has published a well written story. Congrats. Its more than Mike Mlombwa. We need to help and support Mike. Escom is on the spot light now.

Comments are closed.