Scandal hits subsidy programme: Ministers fight for contracts

Implementation of this year’s Farm Input Fertilizer Subsidy (FIS) program could be affected following government’s decision to terminate fertilizer and seed supplying contracts of the companies who were ‘suspiciously’ awarded by the previous regime.

Reports from Capital Hill indicates that some cabinet ministers are not seeing each other eye to eye following squabbles that have ensued between them due to contracts to supply and transport the material as some of them are accusing the other group of getting a lion’s share.

“Some ministers want to monopolise the entire process of awarding contracts to suppliers and the other section is not happy with that arrangement,” said the source.

He said if these criteria’s are followed fertilizers will be delivered in time to all selling points across the country.

Mwanza: Successful bidders to be announced shortly

After change of government from DPP to PP, the new administration  cancelled the previous process of awarding contracts to fertiliser suppliers following corruption and failure by some suppliers to distribute fertiliser on time.

But the retendering of the bid  has seen ministers fighting for their “connections” to be awarded the contracts, according to inside sources.

Bidders

According to Ministry of Agriculture and Food Security’s Internal Procurement Committee (IPC) chairperson Bright Kumwembe 47 submitted their bids by deadline on August 16.

Among those quoting the highest quantities in their tenders are Mzati Investments, Export Trading, Nyiombo Investments and Mulli Brothers which want to supply 108 000, 84 000, 82 000 and 49 700 metric tonnes of Urea and NPK fertilisers for the next farming season

Other companies which have also quoted high quantities include Transglobe, Simama General Dealers, World Commercial Enterprises and Sealand Investments which want to supply 40 000, 34 000, 31 400 and 31 000 metric tonnes of the two types of fertilisers respectively.

However, the Ministry of agriculture says the arrangements are at an advanced stage to see to it that this years’ subsidy program is a success story contrary to what was the case last year.

Minister of Agriculture Prof. Peter Mwanza  said they will soon announce successful bidders.

“Government wants to do this in a transparent manner, to ensure that companies should offer the minimum prices and we would re-engage companies which have performed successfully in the past years,” said the Minister in one of the newly established local newspaper.

Quizzed on when the delivery of this year’s programme will start Mwanza said: “We hope that the delivery will be ready by end October, and what this will mean is that all fertilizers will be in selling points in first two weeks of November surpassing the delivery time in the process.”

Challenges

Meanwhile, investigations have exposed several anomalies that occurred during the 2011/2012 farming season rendering the whole process in a total mess.

According to a letter and a report to the ministry of agriculture from the Logistics Unit Team Leader Charles Clark, several anomalies occurred to the extent that if nothing is done, this year’s implementation could also be affected.

A letter from Clark to the then Principal Secretary in the Ministry of Agriculture and Food Security Erica Maganga, there is great need for improvement in the implementation of the project if farmers are to benefit from the initiative this year.

“It is hoped that the planning lessons learned from this 2011/2012 season will permit earlier decisions to be made particularly in connection with tender acceptance. This would result in the inputs being in the hands of the farmers quicker than in the past,” reads the covering letter of the report.

The report says if government intends to continue the practice of contracting suppliers to purchase fertilizer, the Logistics Unit would advise government that to revisit some contracting systems.

It has also revealed that apart from awarding of contracts to suppliers, there were some other more anomalies that were conducted that ought to be changed if the program is to bear some fruits this year.

Questionable

The report further questions the logic behind the decision by government to purchase all the fertilizer for the Subsidy programme and subsequently market it to the farmers through SFFRFM/ADMARC saying the wisdom of this is particular arrangement was questionable when the dates and times of the financial year were taken into consideration.

“The delay in funding being available has a knock on effect, delaying the availability of fertilizer via government contracts and delaying the speed with which ADMARC and SFFRFM unit markets can be opened. The private sector would not be restricted by such bottlenecks and farmers could have accessed the fertilizer at an earlier date,” reads the report in part

The declared costs of the subsidy programme exclusive of Government operational costs and voucher printing etc is understood to be MK 23,672,256,511. Based on 2,731,641 fertilizer vouchers redeemed the Government should be able to recover MK 1,365,820,500 through the ADMARC/SFFRFM sales to farmers.

Fertiliser procurement takes the major allocation of the Agriculture Ministry budget with K40.6 billion this year allocated for the purchase of 150 000 metric tonnes, comprising 75 000 metric tonnes of Urea and 75 000 metric tonnes of NPK fertilisers to be distributed to 1.5 million farming families at a price of K500 per bag.

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