…. Treasury officials claim political pressure
…contractor only paid K20 billion of K68 billion
…power-play among ruling class elites
Treasury on Monday 9th October 2023 released K2.3 billion as part of payments to the China Railway (CR20) sparking cancellation of monthly funding in several departments and allegations that the company applied contractual and political pressure to get its payment.
Among the serious allegations is that Malawi Congress Party (MCP) officials pressurised for the payment to receive a “tithe” in what has become an intense battle for control of the K68 billion contract of rehabilitation of Bangula to Marka rail line.
The Investigator Magazine has been informed that two new lots for the same rail which is supposed to be from Limbe to Nsanje are soon to be advertised, rekindling the same battles the current project faced, including corruption allegations that resulted in the Anti-Corruption Bureau (ACB) cancelling the contract which was initially awarded to the construction giant Mota Engil.
Several senior government officials including the then Secretary for Transport Patrick Zimpita were arrested by the ACB in relation to the same contract, in a move many in Treasury said was to scare opposition to the CR20 contract.
K2.3 billion paid, total K20 billion paid
Records sourced from the Accountant Generals department shows that the K2.3 billion paid on Monday and upset the funding system brings to total of K20.3 billion the contractor has been paid since the contract was awarded to them to do the 70-kilometre stretch.
K10.2 billion was paid as contractual payment to kickstart the project and since the commencement a total of 1.1 kilometre of actual rail were laid and at least 20km of earth works have been completed almost nine months ago. Forex shortages are said to have hindered progress.
“The contractor has to import rails and the shortage of forex has impacted on their ability to proceed,” said one of the technical teams at the Ministry of Transport.
The contractor is said to have been asked to use own resources for later reimbursement and the company continued to use its funds up to K11 billion and Treasury as not honoured the payments until threats to stop the project were pronounced.
Our source claims, State House intervened, and President Lazarus Chakwera might have had a direct hand in the power play as he hurriedly removed Sosten Gwengwe to install someone who will do his bidding.
Treasury officials said Government is too broke to pay for major contracts.
A broke government, a travelling President and suppliers licking wounds
President Lazarus Chakwera’s 17 days trip to the United Nations and continued daily domestics travels are bleeding the Treasury that only the Ministry of Health and a few others received their funding for the month of September.
A notice from the Local Government Finance Committee dated 6th October 2023 shows that only the health budget had been funded for September to the tune of K1.26 billion, against the annual allocation of K108.3 billion.
“All the Councils have not been funded except for health. This is a crisis, everyone is grounded. This has never happened in the history of Councils. They funded jointly in July and August. But September we have had nothing,” a Director of Finance in one of the Councils told the Investigator Magazine.
Our spot checks of different Ministries show a new pattern developing where some Ministries missed funding in June and got in July and August and they have missed in September again.
“The small suppliers who do not have a voice are suffering, but these ones who have political backing are able to get payments that see all government departments and services come to a halt. This is a crisis the President needs to find an immediate solution,” said another Council official.
The Investigator Magazine estimates that President Chakwera blows between K75 million to K100 million during each domestic travel and might have blown over K1.5 billion during his recent trip to the United States of America to give speeches.
But the Railway backers claim the money is not enough.
CR20 not paid for other contracts as well
The Ministry of Transport and Infrastructure Development this week distanced itself from the payment imbroglio stating that it only certifies the works and sends them to the Treasury who have control of who is supposed to be paid.
“The Ministry’s work ends with certification,” said Watson Maingo, the Ministry spokesperson.
The CR20 were also told to use own funds to develop the Griffin Saenda Complex and the Kamuzu Institute for Youth Swimming Pool and they are not yet paid for the same.
“The consultant did 12 certificates, only three have been paid,” defended a close ally of the company.
But Treasury officials, accused of being in the “pockets” of another contractor and supported by a number of Malawi Congress Party (MCP) officials claim the company has been bulldozing its way and at the centre of it is the aspiring parliamentary candidate for Mzimba Central Vitumbiko Mumba.
How Mumba, consulting engineer for CR20 got Mota Engil Contract cancelled
Engineer Vitumbiko Augeans Zasamula Mumba, on Tuesday 28 September 2021 at 2pm gave a statement to the Anti-Corruption Bureau in Lilongwe alleging “undue” influence by Mota Engil to get the contract.
Mumba in his 13-page statement which The Investigator Magazine has sourced claimed Mota Engil did not meet the 30 percent quota of works being allocated to local contractors while his CR20, according to bid documents had allocated three local contractors.
The CR20 consultant also alleged that Mota Engil bid did not have bridges as required and did not comply with Clause 1.11 of Section 4.2 of the contract by lumping items into one rate.
The other allegations included that there was a January 22, 2021, fake PPDA approval, Notice of Intention to Award before approval by Government Contracting Unit and before the Internal Procurement Committee had notified the Secretary for Transport.
Mumba also pointed out at Evaluation Committee’s deliberate waiver of 30 percent requirement for local contractors for Mota Engil and the ACB is said to have ordered cancellation of the process.
Engineer Mumba who is said to be close to President Lazarus Chakwera’s family, got himself political enemies and the battle for control continues as new contracts are supposed to be tendered soon.
CR20 is said to have signed a memorandum for the railway line in 2017 but it was found that financing from Chinas Exit bank was not possible as Malawi had finished its quota.
Malawi Government went ahead to start the project with its own resources, but the poor economy the project risks turning into a white elephant.
Leaked tapes, memorandum, and political posturing
Mumba’s declaration of his intention to stand in the Northern district of Mzimba has activated a huge backlash with online platforms receiving edited audios of his alleged discussions over the contracts and the payments he received as an engineer.
An internal memorandum was also leaked to the media which shows the project cost spiralling from K68 billion at the start of the contract to K96 billion which is yet to be submitted to the PPDA.
“The new sum includes raising the earth works to 2m since the cyclones proved the current 1.5m to be in adequate. The contractor has offered either to do 52 km using the same money for the 70km or increase and cover the costs,” said our source.
The Investigator Magazine has identified the source of original audios and will release them as soon as they are validated and has decided not to release edited audios as they do not capture the full discussion of the audios.
The edited audios are already circulating on social media with among allegations made are that K1 billion was paid to the consulting engineer.
The Investigator Magazine has also evidence that they have been used in a blackmail attempt to grab contracts with other government agencies.
Mumba refused to comment on the matters but argued that “sense should prevail that this is not about the rail. If they had evidence of any wrongdoing, they would have gone ahead to complain to the ACB or other authorities”
Treasury and official CR20 representatives could not be reached.
The full story is yet to be told
Facts of the matter could be hard to certain and the levels of political influence cannot be ignored as such that the project will always reflect the divisions in the ruling party, primarily based on who is making more money from public contracts.
Editors note: We have reserved the right to publish edited audios and that there are no longer exclusive to us but shared on other social media platform. The editing protects other people and therefore biased in our opinion. Once we validate the full audios we will broadcast them unedited.