CFTC set to release verdict on probe of granting of MalTIS to SA firm in partnership with Movesa 

Competition and Fair Trading Commission (CFTC) has released complaints cases it considered and adjudicated at its 61st meeting on March 28 but it is yet to release findings of a case to do with investigations on the sole motor vehicle blank number plate importation contract made in 2010 for Motor Vehicle Spares and Accessories (Movesa).

At a press conference on Wednesday in Blantyre held by acting Executive Director, Apoche Itimu in the company of chief analyst for consumer affairs, Augustine Nyirenda, CFTC said they will announce their determination on Tuesday after consulting the complainant as well as the respondents — which are the Directorate of Road Traffic and Safety Services (DRTSS) and Malawi Bureau of Standards (MBS).

The complainant, who also petitioned the Anti-Corruption Bureau (ACB) to investigate the same case last year, accuses the two regulatory bodies DRTSS and MBS that they kept changing blank number plate importation test specifications to block others business entities in favour of Movesa — which was awarded the contract as the sole blank number plate importer in 2010.

The complainant asked for the probe both to the CFTC and the ACB to investigate the controversy “as there might be an element of corruption” on the process, saying much as his company tried to meet legal specifications from MBS and DRTSS, his applications were denied.

In 2010, Malawian motorists were informed to change their old number plates to the new SADC standard Retro Reflective but MBS and DRTSS as government regulators did not tender out or advertised “so that businesses could apply to become importers but instead awarded it to Movesa as sole importer.

Movesa was also tasked by the regulators in a letter dated March 23, 2011 (ref BS/QAD/58/0) that together with MBS, the company would work “to facilitate prevention of importation of substandard blank plates by unscrupulous importers by subjecting [Movesa’s] consignment for conformity assessment against the Malawi Standard MS 639-1.”

But barely two weeks after being granted the contract, DRTSS notified Movesa on April 4, 2011 that his number plates failed the MS 639-1 standard test IQR/11/117 and was asked to notify his supplier for redress.

But MBS is reported to have responded to DRTSS letter to Movesa on May 18, 2011 saying the company’s fails on the plates “should be treated as minor” while on January 4, 2012 both MBS and DRTSS agreed that since the standard was currently under review and to not stop the program, the plates that failed to meet the standard must carry on.

“This was happening when there were other businesses whose number plates had passed the standard MS639-1,” says the complaint letter to the ACB, wondering why MBS did not engage such businesses “to bring correct standard plates”.

The complainant — whose company applied to import the blank plates and was told to get his products tested by a laboratory outside MBS mandate — revealed that on January 4, 2012, MBS’ deputy director informed DRTSS that if they allowed “too many importers on the market” before harmonizing the standard “with regulations there would be enforcement challenges that would compromise the integrity in both MBS and DRTSS”.

“We need to ensure that our vehicles are fitted with uniform number plates that can be perceived by the general public as being standardized and the only solution to achieving this is, in our opinion to apply a common yardstick which is essentially the standard currently under review.”

The communication between the two regulators then proposed that they “should suspend registration of prospective importers of number plates [and] to maintain Movesa in order that the program should not stall”.

The complainant says in May 2015, a separate importer’s test report from MBS passed the standard MS639 2011, which allowed DRTSS to grant his company a license in April 2016 along with serial numbers to start importing number plates.

The importer placed an order with suppliers in China for blank plates and once they arrive a Mr. Chikopa from MBS collected samples for testing on November 30, 2016 but on December 19 he received communication that the “sample plates had failed the tests and should not be sold but destroyed”.

“They made us order the number plates as shown in the test report of the 15th May, 2015 only to fail once the consignment arrived. We we left trying to figure out which test result was valid.”

The complainant was incredulous that MBS told them to import the product identical to those given for test only to be told they have failed the test and MBS’ official Wanachi Chauluka visited the importer’s offices “to inspect the consignment on 9th February 2017 and placed it under quarantine”.

“What makes us doubt the whole process is that the sole importer Movesa, who has been allowed to import the blank number plates and is still importing, has had his number plates fail the standards but the Bureau treats his fails as minor and ours as major.

“There are serious double standards at work here. I would like to stress that our number plates failed on some minor parameters but passed all major parameters.

“[MBS] seems to be favoring [Movesa] as he was being allowed to import and sell his number plates that had failed major parameters but instructions were being give to treat the major fails as minor.

“There is need to be a level playing field and not having different standards for different people” as per the “2011 standard used and that has always been in line with the 2010 DRTSS Act and even published in a newspaper advert on the 9th February, 2015.”

The CFTC and the ACB were also noted that former deputy quality assurance service officer Steve Kamuloni is working as a consultant for Movesa in the implementation of MS639 standard and has attended standard meeting in 2019 at Hapuwani Lodge and Malawi Sun Hotel in 2021 as a representative of Movesa.

“This is the same individual who was instrumental in manipulating the standard to suit Movesa,” says the complainant in the detailed 6-page report.

The complainant also asked the ACB to probe the process of granting the supply of Malawi Traffic Information System (MalTIS) that involves South African firm Fischer Consultants and Movesa as a Malawian partner, which was granted over 7 years ago but failed to meet three deadlines since 2018 to hand over to government.

The complainant petitioned the ACB that “system was supplied without any tendering process” and that “red flags were raised back in 2016 during a meeting with stakeholders as to how the same individual who is the sole importer of number plates could now supply the system to government”.

The petitioner also shared a concern that the red flag raised in 2016 questioned a “serious conflict of interest” on the part of Movesa following its subsidiary AutoTec being granted license as an outsource motor vehicle inspection garage.

This arrangement being deemed as a serious conflict of interest by the stakeholders in 2016, was allowing Movesa use a MalTIS system it is in partnership with Fischer for its gains and having an upper hand over the whole process.

In June, we reported that what was raised as reg flags during that 2016 stakeholders meeting — which Movesa was in attendance — has now come to pass as the local garages are being made to pay to access the MalTIS.

The consultants Movesa & Fischer Consulting, still cling on to the MalTIS and the complainant to the ACB alleges that failure to hand over the system “seems to be a way of siphoning money by some corrupt individuals” in collaboration with the Consultants.

However, when contacted in June last year, owner of Movesa, Moshin Salim distanced his company from the MalTIS system, saying the logistics partnership he had with Fischer Consortium ended last year.

Yet in his response to our queries in June, former spokesperson for the Ministry of Transport and Public Works, Andrew Mthiko — who was in attendance at the 2016 consultative meeting as well as former ACB Director General Lucas Kondowe — kept referring Movesa and Fischer Consortium as the official consultants.

During discussions, as according to the minutes we have, the stakeholder garages pointed they were reluctant to invest so much in vehicle inspection equipment until they get an assurance or commitment that they will be licensed when they meet all requirements.

They also wanted the government’s protection in terms of number of lanes licensed to each garage; number of garages licensed and also a provision of an incentive in the form of a tax holiday. This was to make sure that they should be able to recoup the return on their investment.

A source privy to the petition presented to the ACB, said huge sums of money are required to meet the requirements needed to be granted the operating licences but it’s quite “disheartening that government is being held ransom by the foreign builders of the system”.

“After meeting all requirements that involve spending huge sums of money, why do we still have to pay to access the government system also at a huge cost?” questioned our source.

“It’s very perplexing that the government is failing to control this arrangement because the consultants are still clinging on to the system and dictating the concerned garages.”

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