Malawi anti-graft body investigating Escom’s Aggreko genset deal

After whistle-blowers and leader of opposition Lazarus Chakwera claimed to have objective material evidence linking State House officials and Chief Secretary to government Lloyd Muhara to alleged corrupt practices,into the procurement of the multi-billion kwacha generators contract at the Electricity Supply Corporation of Malawi (Escom), the Anti-Corruption Bureau (ACB) has confirmed it is investigating the matter.

Malawi Congress Party (MCP) leader Lazarus Chakwera accused the Democratic Progressive Party (DPP)-led government of influencing Escom to award a contract of purchasing generators to a company with links to the party’s members.

Chakwera claimed that MCP h stumbled on documents indicating that some State House officials influenced the Chief Secretary to the government Justice Lloyd Muhara to award 78 megawatts stand-by electricity generators contract to a company of their choice.

Escom, the distributor of electricity, messed up the procurement of generators that were expected to add 78 megawatts (MW) to the national grid to minimise the intensity of current blackouts following the scandal and in August 2017  the Office of the Director of Public Procurement (ODPP) stopped Escom from awarding a procurement contract .

In December 2016 Escom evaluation committee recommended that lots one and two in Mapanga and Kanengo, respectively, be awarded to APR Energy with evaluated respective prices of $34.6 million and $24.9 million while lot three at Chinyama in Kasungu was recommended for award to Aggreko International Projects for $18.9 million.

But when the bids’ evaluation team presented its report to the internal procurement committee (IPC) for approval, the evaluation recommendations were not upheld.

Chakwera citing objective material evidence which he has said: “Some company (called APAC Energy) was included even though it was not part of the initial bidders list. Aggreko emerged as the successful bidder to provide generators in 3 selected sites in Blantyre(Mapanga), Lilongwe(Kanengo) and Kasungu(Chinyama) to the tune of USD73,978,633.”

According to information Chakwera gave reporters, on 12th April 2017 ESCOM sought a “No Objection” letter from Office of the Director of Public Procurement (ODPP) through letter referenced ESC 617/RT/S/FY 2016-17 and that on 25th April 2017 a “No Objection” was granted by the ODPP to ESCOM.

“ESCOM thus went into negotiations with Aggreko for the other terms and conditions of the contract. ESCOM and Aggreko subsequently signed a contract.

“It turned out that State House strangely preferred to have two companies, whose names we have, to be awarded the contract. In fact, two of Mutharika’s own charges at State House, allegedly advised the two companies to write ESCOM BOARD chairperson to complain that the tendering process was wrong,” disclosed Chakwera.

He said the truth of the matter is that the two of Mutharika’s own aides were hoping to “get a cut from the deal” and t the two companies did as instructed.

“ESCOM then wrote ODPP on 7 August 2017 seeking guidance as the contract had already been awarded to Aggreko and ODPP advised that at this point nothing could be done.

“Still not satisfied, State House officials ordered the Chief Secretary to ask ODPP to find fault with Aggreko award so that the contract is subsequently cancelled and then awarded to one of their preferred two companies.

“ODPP complied and subsequently launched an investigation into the tendering process. On 28th August 2017 ODPP wrote a report to the Chief Secretary faulting the process and effectively cancelling the ESCOM/Aggreko contract.”

Chakwera continued to say that Chief Secretary eventually ordered ESCOM to cancel the tender. Thus ESCOM wrote Aggreko on 7 September 2017 advising them that the tender had been cancelled.

“The Chief Secretary instructed Electricity Generation Company (Egenco) to take over the procurement process since ESCOM had failed. For the record, the Chief Secretary is the Board Chairman of EGENCO and State House charges saw that they would easily influence the Chief Secretary,” said Chakwera.

He said EGENCO thus recommenced the tendering process where ids were called for and evaluation done.

“Unfortunately, the State House preferred company did not bid. While waiting for the results of the evaluation process, on Tuesday 24th October 2017 at 5.30pm a meeting was convened by the Chief Secretary involving the ESCOM Board Chairperson and Chief Executive Officer in the presence of Dr. Collins Magalasi and two representatives of a company called Altaaqa (which is the one that did not bid) at Ryalls Hotel. Clear instructions were given to ESCOM to award the generator contract to Altaaqa even though they did not satisfy the procurement requirements as per document in our possession,” claimed Chakwera during the news conference.

Chakwera said Altaaqa was consistently number 4 under the ESCOM evaluation process and they never submitted any bid under EGENCO bidding process.

However, in January this year, President Peter Mutharika commissioned 55MW diesel-powered generators in Blantyre that Escom—using a single sourcing procurement method—hired from Aggreko Power Solutions, the same company the ODPP had ordered the cancellation of its contract.

Chakwera said instead of sincerely working to resolve the situation, President Mutharika’s cronies have used the situation to enrich themselves.

In the initial procurement process, nine companies, including JocobsenElekro AS, Aggreko, AKSA Enerji Rental Power, APR Energy, Almagamated Power Solution (APS), Altaaq Global CAT, So Energy International, Greenheart Energy Limited and Sino Hydro were shortlisted for supply of three generators that were to be stationed in three lots each at Mapanga in Blantyre, Kanengo in Lilongwe and Chinyama in Kasungu

ACB senior public relations officer Egrita Ndala has since confirmed that the graft-busting body was conducting investigation at Escom relating to the procurement of the generators.

According to Ndala, the investigation is related to the 2017 procurement process.

Malawi currently is experiencing extended hours of blackouts .

Follow and Subscribe Nyasa TV :

Sharing is caring!