Gani’s Victoria Pharmaceutical under ACB probe over K36bn suspicious contract at Central Medical Stores under ACB

Human Rights Defenders Coalition (HRDC) has, through its whistleblower Initiative, hit again, this time exposing a suspicious K36 billion contract involving Victoria Pharmaceutical Industries Limited (VPIL) and Central Medical Stores Trust (CMST).

According to our investigations, the Democratic Progressive Party (DPP) led government endorsed a seven-year contract for VPIL to supply syringes to CMST worth K5, 204,025,000 each year.

In its letter to the Anti-Corruption Bureau (ACB) boss Reyneck Matemba dated 8 October 2020, HRDC suspects corruption in the contract because, one, it was unsolicited bid and, two, government does not give seven year supply contracts.

Reads the letter signed by HRDC chairperson Gift Trapence: “It is alleged that this was an unsolicited bid where VPIL approached CMST and stated that they are local manufacturers of pharmaceutical products which they could supply at cheaper prices than what CMST was procuring through third parties and thus they would enjoy economies of scale. CMST and VPIL then allegedly entered into a one-year framework agreement.”

Trapence adds that it is further alleged that after this agreement had been signed, VPIL came back and stated that they had been misled by CMST in the discussions as the estimates that CMST had provided were based on the country’s total population and not on the sick population.

“Allegedly this meant that demand for syringes, for examples, had been calculated at how many each person in the country would need and not on the estimated number of sick persons who would need the syringes. Consequently following the discussion, CMST and VPIL decided to enter into a new framework agreement lasting or seven years at US$6,938,700.00 per year,” writes Trapence.

Interestingly, according to Trapence, though this framework agreement was based on the fact that VPIL would be manufacturing the goods locally; it is, however, alleged that they are just importing the goods.

Trapence underlined that as HRDC they are aware that Malawi Government framework agreements ordinarily run for only one year.

“We also feel that technology can easily render some activities obsolete and that’s a seven year contract for government can easily mean buying things that have been left behind by advances in medical science. We feel there is no financial prudence in this contract,” he said.

One of the managers of VPIL, Farook Gani, confirmed about the contract but was quick to say if we needed more details we should contact CMST.

CMST spokesperson Herbert Chandilanga said they have not seen the letter that HRDC has written ACB.

“We have not seen the letter but when ACB engages us we will cooperate,” he said.

On his part, Matemba confirmed receipt of the letter from HRDC.

HRDC has been vocal through its whistle blowing initiative, bringing to light different allegations of rot that happened or are happening in various government parastatals.