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

April 25, 2019 Owen Khamula -Nyasa Times 43 Comments

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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43 replies on “Another ‘cash-gate’ at Escom as K150m bids are rejected for K650m for building demolition”

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

  2. 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)

  3. 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)

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

  5. 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

  6. 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 is wrong here. Koma tisamanyozane. Tiyeni timange dziko lathu. ESCOM belongs to us all. I personally trust Dr. Mpinganjira. A great son of this land. But, you too are great. You have great brains. Lets keep the debate clean but honest.

    Kent Y.G. Mphepo – Blantyre.

  8. 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?

  9. 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

  10. 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?

  11. Terrastone and Shire are known companies with elite backgrounds. The cost they gave you was enough for them. They already have the heavy equipment you are talking about. Kodi company mwayipatsa tenderyo ilibiletu equipment? Agalu akuba inu. Tikuonani bwino pa 21 May

  13. Demolishing ndi kugumula, sizochita kufunsanso apa. Pogumulapo ndiye chopanda ntchito sipadzkhalanso kutengapo kanthu ayi. Or atatenga anyamata a mu Ndirande ndi mahamala awo agumula chimenecho ndi 1,000,000,00 yokha

  14. Dr Chakwera
    Dr SKChilima
    DrJB Banda

    Me Atupele Muluzi

    Please in your busy schedule, help us. Please take injunction for this contract until after Elections.

    This is pure theft.
    How can they say the company will require heavy machinery?

    They were bidding not knowing that they have big machinery.

    If President Muntharika is serious about fighting corruption let him stop this nonsense.

    Atupele if you are serious about kudana ndi poverty say something to your boss. You have that opportunity to do so while you are still in the Cabinet.

    Malawians what other sign are u waiting for#DO NOT VOTE FOR DPP#

    MUNTHARIKA AND HIS PEOPLE OUT!

  16. tizongolirabe mpaka liti? Makampani enawo ngati anapanga bid pa mtengo wotsika ndiye kuti akanatha kuigwila ntchito yo bwini lomwe.

    1. Negativity is killing most Malawians. Proper cost analysis estimation is probabbly the key word to the successful bidder.Remember the cost of living has escalated, now what about the cost of a project of such a magnitude in the middle of a city where you wish to maintain normal daily ventures of people’s lives. Ja! no! this is a different Malawi from the one I used to Know.Retrogation, negativity, greed and envy, rumour mongering and gossiping are the incurable diseases engulfing the people of the beloved country Was the tender not open to public scrutiny? If yes why the fuss

      1. @ sonomombwe

        The problem is you don’t know that you don’t know. Khalani chete apa mukutiphyesa mtima with your political sycophancy and buffoonery .

  18. PROBABLY YOU SHOULD HAVE SHOWN US THE IPD&A summary minutes and sheets to see the reasons why the MK 150 M was rejected for MK 650 Million. Demolition of a building is a very technical venture. KULIBE Internship!!!. So before we go into deep tell us the reasons and we will make our own minds if ESCOM Board and Management have made such an error. Mind you the Board Chair is the same one you have given praise on this particular platform. DPO NOT ALWAYS JUMP TO NEGATIVE CONCLUSIONS.

    1. Auzeni bro. Why were unlimited contractors called to bid in a K200m category job? Something is not adding up here.
      And secondary who said govt is going to foot the demolition cost? Was the building not insured?
      So aMalawi don’t react on piecemeal or misleading information.

  20. BASI AKUFUNA AYIMALIZE KAMPANI YA MPHAMVU NGATI IMENEYI , BASI AKUFUNA AZIPASANA BUSINESS ALOMWE OKHA OKHA

  21. So they’ll be purchasing expensive equipment for the contractor. The reason doesn’t make sense at all. 3 storey building demolition costing that much, mukanangonena kuti zina zikupita ku chipani.

  22. Why not offering the tender to those companies with heavy machinery to do the job.? This is utterly nonsense. DPP government, come 21 May you are out!

  23. This is a company that is on the death bed but it continues to behave this foolish. Idyani Komaliza. You have a few days before you start to vomit the public resources. Can Terrastone fail to demolish a building? So you burned the building to conceal evidence of corruption and now you have the audacity to milk it further in its demolition. Shameless act of theft.

  24. Professor peter Mutharika has completely failed to tame obvious corruption, shameeeeeeee peter mutharika u dont inspire confidence because u are part of the corrupt

    1. Mbava izi zatitopetsa kuba kosachita nako manyazi inu a DPP aMalawi pano akudziwa njira zanu zonse zimene mumadzera pofuna kusolola ndalama za misonkho yanthu choti mudziwe mwatsala ndi matsiku 26 wonkha wotulukila mmboma samalani a Malawi akukupenyani mudzadzibwenza .

  27. Nde mwati K650 million? thus alot of money by the way. pamenepo yogwesela its 20 million. yinayo umangoziwilatu komwe italowele

  31. I don’t think the comment by Escom’s Public Relations Office is justifiable.Do they mean to fool the nation that Terrastone does not have the capacity to demolish buildings? Just acknowledge that you are very corrupt Escom. No wonder you are taking ages to connect peoples houses.

  32. I think Malawians don’t know how valueless their Kwacha is. A similar floor area sized building being constructed by MERA in LL is pegged at over K7bn meaning the figure people are alarmed with here is just enough for design consultanting team.

  33. This is too much. Why treat Malawians such? ACB stop this rot please. Kungomva kuti masiku atha. Where is the chairman of escom ? Is this fair???????

  34. Everything is wrong at and with ESCOM. This state owned entity should either be privatized or semi- privatized ( 50 -50 govt /private shareholderShip). Surely this will bring sanity to that place of calamity. As long as the entity remains state owned it will always continue to serve as a gold mine for ruling elites and unscrupulous employees over there.

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