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.
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 :