Reserve Bank seeks court intervention to manoeuvre contract award

The Reserve Bank of Malawi (RBM) has, under panic and intense pressure, appealed to the High Court on a case in which it awarded two contracts to a firm that never met its own set evaluation criteria.

The bank is desperately asking court to review the decision made by the Public Procurement and Disposal of Assets Authority (PPDA) in which the Central Bank was ordered to retender the award of Flexcube and ATS systems which it awarded to Mitra Systems Limited.

But what is clear is that Mitra Systems Limited does not have the required skills and experience as per the evaluation criteria for the two tenders.

The bank’s decision to appeal the case follows SPARC Systems Limited’s complaint to PPDA after noticing a series of mistakes in the bidding process, which among others, saw RBM awarding the said contracts to the alleged successful bidder despite only existing for two years and yet one of the bidding requirements is that a firm should have operated for a minimum of five years plus three traceable referees. PPDA Review Committee agreed with SPARC Systems Limited’s submission that the bidding process was not procedural and ordered a retender.

Documents seen by Nyasa Times reveal that RBM wants a stay of enforcement of the decision by the PPDA Review Committee, claiming that the judgement from the committee did not provide enough reasons for ordering it to retender. The bank also argues that it looked at beneficial owners of the firm Mitra Systems Limited in awarding the contracts to them hence the need for the High Court to stay PPDA’s decision.

RBM also needs the stay on the retender as the equipment for the Flexcube and ATS tenders are urgently needed for running of critical systems at the bank. It further argues that the decision of the committee was contradictory as it allowed for Mitra Systems Limited to be awarded lot 3 of the ATS tender although the committee found them to be unqualified.

Civil case number 13 of 2021 which is before Judge Kenyata Nyirenda shows RBM as a claimant and SPARC Systems Limited as a defendant. While the bank wants a stay of the enforcement of the decision by PPDA which was in favour of SPARC Systems Limited, it has not added the PPDA Review Committee as a party to the hearing.

In its submission, SPARC Systems Limited has asked the court to dismiss RBM’s argument with costs on an indemnity scale, claiming it is an utter waste of the court’s time as the right procedure was not followed in awarding the contracts to Mitra Systems Limited. It has also asked the court to add PPDA as a respondent to account for deliberations that resulted into the decision to retender.

“The application for a review is against the decision of a quasi-judicial tribunal which even in the absence of Section 60 (10) of the Act would be subject to the High Court pursuant to its powers under Section 108 (2) of the Constitution.

“Under Order 19 of the Civil Procedure Rules, the public functionary whose decision is sought to be reviewed is added as a Respondent so that during the review proceedings, it can account for the exercise of its powers and duties under public law. The omission of the Review Committee in this case is, therefore, a glaring omission. It will result in injustice as the committee may be condemned without a hearing and this would result in offending the rules of natural justice and Section 43 of the constitution,” reads part of the documents.

A certificate seen by Nyasa Times indicates that Mitra Systems Limited which is jointly owned by a Rwandan, Robert Beninimana and a Zimbabwean, Martin Masawi, was only registered in October, 2018. Investigations also show that the two owners were working for a company called Southern Business Solutions before opening Mitra Systems Limited and that Southern Business solutions has never been part of Mitra Systems Limited.

RBM’s decision goes against a presidential declaration that government entities should be awarding business to local Malawians on merit.

SPARC Systems Limited also accused the Reserve Bank of Malawi of unfair treatment, breaching Section 30 of the PDA Act of 2017 which requires that all public procurement proceedings be conducted in a manner that promotes transparency, accountability, non-discrimination, fairness, open competition, anonymity, economy, efficiency and responsiveness to modern information and communications technology.

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