Another ‘cash-gate’ at Escom as K150m bids are rejected for K650m for building demolition

State-owned power utility Electricity Supply Corporation of Malawi (Escom) has come under intense criticism for rejecting a winning bid of less than K150 million for the demolition of Escom headquarters building in Blantyre which was gutted by fire two years ago and opted for a K650 million for the same exercise.

Escom advertisement

The advertisement in the local newspapers says: “Electricity Supply Corporation of Malawi Limited (Escom) wishes to inform the general public that it intends to award a contract in line with section 48 of the public procurement and disposal Assets Act no, 27 of 2017 for the demolition of burnt Escom House.”

The advertisement says the successful bidder is Irrigwater and Mining Equipment with a total price of K650 million.

The tender was initially won by Terrastone Limited whose bid was at K137, 513, 593.63 while Shire Construction Limited came second with a bid of K128, 155, 680, 00.

However, the evaluators opted for Irrigwater and Mining Equipment, unknown company that only has a Facebook page with no details about who they are.

But Escom spokesperson Innocent Chitosi justified the K675 million price for the demolition of the building, saying the company which will demolish the building will need expensive equipment.
“The building is situated in the middle of the town. It is surrounded by other business entities. We would not want other business entities to close or the Highway to close just because we are demolishing the building,” said Chitosi.
He said the transportation cost of the heavy equipment justifies the K675 million cost.
However, some people say K675 million is a cost of construction a new building.
Writing on his Facebook page, academic and analyst Henry Chingaipe observed that the contracted amount was on the higher side for the exercise.
Escom—already mired in financial liabilities in excess of over K80 billion with local and foreign institutions—has been attributing the loss of billions to the unbundling of the parastatal to form Electricity Generation Company (Egenco) in 2017 as an independent power producer. The unbundling meant that Escom entered into a power purchasing agreement with Egenco at tariffs which the Malawi Energy Regulatory Authority (Mera)  approved.
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Tizanka
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Tizanka

When accountants Want to become engineers. Malawians are a pathetic bunch always rimour mongering and conspiracy theory discussing. Get all the facts first

mtete
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mtete

Until I know the scope of works defined in the render document, I reserve my comments. Suffice, however, to say K150m (USD 200,000) without causing inconvenience to adjacent premises and road users, appears to be on the lower side.

That it is hoped ESCOM did a due diligence on the preferred bidder in terms of similar works done elsewhere to warrant a bid price of K650m (USD 850,000)

mtete
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mtete

Until I know the scope of works defined in the render document, I reserve my comments. Suffice, however, to say K150m(USD 200,000), without causing inconvenience to adjacent premises and road users, appears to be on the lower side.

That said, it is hoped ESCOM did a due diligence on the preferred bidder in terms of similar works done elsewhere to warrant a bid price of K650m (USD 850,000)

Docus
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Docus

Who are the owners/ shareholders of this company “Irrigwater and Mining….”
I hate this surface journalism! Please investigate and let the puplic know!

Roll out ATI now
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Roll out ATI now

Maona A Malawi mmene tikuberedwera ndalama ndi chipani cha DPP. It does not matter whether it’s headed by Mpinganjira, he is DPP as well. So chipani chichi chithe, in the next 8 years DPP must be obliterated from the face

Kent Y.G. Mphepo
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Kent Y.G. Mphepo

I personally sit on a board of an organization that is currently building a house in Blantyre. So far, less than MK100,000,000 has been spent. My problem comes when I compare what MK100,000,000 has so far done in construction with what MK600,000,000 could have done in construction or demolition if it this organization doing the work. I find the ESCOM episode interesting. Malawi is obviously an interesting place to live in. I am following the debate with keen interest. Countrymen, this is our only country. Let’s keeping debating. It is our collective views that will make a difference. No one… Read more »

Dan
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Dan

The next government should sack all parastatl stooges and replace them with professionals

Sibuno
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Sibuno

If the idea is to demolish the building then the lower bidders have it, but it sounds like ESCOM wants to equip the expensive contractor, which brings in further questions as to who owns this company. We have had a lot of such deals, where authorities want to enrich friends or even have a cut out of it. It reminds me of the files stuck at ACB. If this information not enough for ACB or similar body to come in? Do we wait for the next government next month perhaps?

Aka
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Aka

In my opinion ‘Terra Stone does ‘ very good work and they have the equipment and moreover when producing their bills they factored into it all the inconveniences being feared for now. Kuzolowera kuba basi

Mulupale
Guest
Mulupale

Terrastone and Shire are among the Prime Civils in Malawi. If they bid at less that MK150 million, ndiye kuti akudziwa what is required. A Chitosi, muukuona ngati mukuuza ana?