Supplier’s suspicious generosity
BY PIJ REPORTER
A supplier of the controversial ambulance deal for Malawi’s Ministry of Health, Savenda Management Services Limited, flew officials from Ministry to Zambia and UK while Paramount Holdings took the team to Dubai on an all-expense-paid trip prior to the officials granting the company a contract to supply ambulances.
Savenda, Grandview, Movesa were other bidders who equally took the delegation to different countries and paid allowances.
Savenda sued, arguing that they were given legitimate expectation that the contract would be given to them after this expenditure.
Now those who wined and dined before signing off on the contract face corruption probe.
Recently, the High Court (Commercial Division) awarded Savenda contract, a sum of £12,038,000.00 and US$17,018,020.00 to Savenda Management Services Limited against the Malawi Government for breach of contract after the ACB ordered Malawi government to freeze the contract amid suspicion of corruption.
The Attorney General—Thabo Nyirenda—who has reviewed the ruling and is expected to make a decision on whether to appeal against the ruling or not—now wants all the officials who participated in the trip alongside the supplier, placed under investigation for contravention of the corrupt practices act, with the AG suspecting the allowances could construe bribes.
In view of this, between November and December 2018, a team of about 10 Malawi Government officials travelled from Zambia to the United Kingdom and Dubai to inspect ambulances under the sponsorship of bidders; an act former PPDA acting director Timothy Kalembo described as conflict of interest and promised to investigate.
According to a letter the AG sourced by Platform for Investigative Journalism (PIJ) addressed to the Anti-Corruption Bureau (ACB), some of the funds claimed by the company are the allowances and expenses spent on the trip to Dubai by the supplier on the infamous trip.
Savenda Management Services Limited claims that it spent in total the sum of £320,000.00 on Ministry of Health Officials who went to the United Kingdom and Zambia to conduct a pre-inspection and post-evaluation exercise on the ambulances that the Ministry of Health intended to procure.
The AG believes that an offence of abuse of office under section 25B of the Corrupt Practices Act and other corruption-related offences had been committed when the Government officials accepted to be paid allowances by the bidder.
Reads the letter: “Savenda Management Services Limited claims that it spent the sum of £320,000.00 on Ministry of Health Officials who went to the United Kingdom and Zambia to conduct a pre-inspection and post-evaluation exercise on the ambulances that the Ministry of Health intended to procure. Savenda Management Services Limited claims that the said sum of £320,000.00 represented costs of air tickets, allowances, and accommodation for a delegation of eleven Government employees who travelled to Zambia and United Kingdom for post evaluation.
“I firmly believe that an offence of abuse of office under section 25B of the Corrupt Practices Act and other corruption-related offences had been committed when the Government officials accepted to be paid allowances by the bidder.
“I am aware that your office previously put a restriction notice on the awarded of the contract to Savenda Management Services which was eventually lifted. I believe that the restriction notice would not have been lifted had your office been informed that Savenda Management Services paid allowances and travel expenses to Government officials involved in the procurement process.”
Civil society watchdog, Centre for Social Accountability and Transparency (CSAT), welcomed the investigations and called upon authorities to ensure those responsible for contracting and procurement be brought to book.
“It is good that the Attorney General has ordered investigations on these matters, it is our hope that the order by the AG is just a fair reminder on all outstanding fraud cases. It is also within our expectation that fraud cases will be thoroughly investigated without showing any selectiveness and arrests will be made,” said Executive Director Willy Kambwandira.
He added: “People involved in award of such contracts should be personally held accountable and face the law. We also believe that these are not attempts to divert the attention of Malawians on current issues. It is also within our expectation that these orders are not meant to overshadow and distract efforts of the ACB on issues that they are currently pursuing.”
Newly-appointed Attorney General, who upon taking office pledged to stem out abuse of the compensation system, has ordered the Office of President and Cabinet (OPC), Ministry of Justice and Constitutional Affairs, the Public Assets Procurement and Disposal Authority (PAPDA), Police and the ACB, to cooperate in the investigation, according to sources close to the investigation.
The Genesis of a Controversial Deal
The controversial Ministry of Health ambulances supply deal had the blessings of Cabinet ministers in the former Democratic Progressive Party administration, but technocrats charged with execution apparently frustrated the move.
Paper trail on the ambulances deal shows that in 2018, then minister of Health Atupele Muluzi highlighted the shortage of ambulances and requested special funding for the exercise from his Cabinet colleague Goodall Gondwe, who was minister of Finance.
According to The Nation newspaper, in a letter reference number DPPD/21 dated January 22, 2018, Muluzi requested the Ministry of Finance to provide K4 billion outside the Ministry of Health allocation for the procurement of 66 ambulances.
Gondwe approved Muluzi’s request and further proposed that the number of ambulances be increased to 300.
Gondwe’s response letter dated February 2 2018 under reference number FIN/BD/2/2/9/310 reads in part: “Honourable minister, you may wish to note I totally agree with your suggestion that some resources should be set aside in the 2018/19 budget for procurement of ambulances for our health facilities.
“I am of the view that instead of planning for 66 ambulances, we could be planning for the procurement of 300 ambulances.”
Vision International was to supply the 300 basic life-supporting ambulances at a cost of K32 billion and that government would be paying an average of K6.4 billion annually over five years.
PIJ partner media outlet, The Nation established that after Gondwe’s communication, the ministries of Finance and Health received a proposal from a South African company identified as Vision International to supply 300 ambulances to Malawi. The payment plan was staggered over a period of five years to give the Malawi Government some fiscal space.
We have not independently established how the South African firm came to know that Malawi needed 300 ambulances. But sources familiar with the deal claimed there was a syndicate of senior government officials involved.
In a memo to Secretary for Health reference number EAD 13/1/2/1 dated June 20, 2018, Ben Botolo—who was then Secretary to the Treasury—described the deal as technically and financially viable.
But while seemingly falling for the deal, Botolo feared procurement consequences and stated the same in writing: “I propose that government may consider procuring such type of ambulances.
“However, I would urge your Ministry of Health to procure such vehicles in line with the Procurement and Disposal of Assets Act from which this may be seen as single sourcing and plunge your ministry and government into mis-procurement battles.”
Following the advice from Treasury, Ministry of Health advertised for international competitive bidding for the supply of 300 ambulances and three companies emerged as successful bidders. They were Vision International, Grand View International, and Savenda. The bidders, at their own cost, were asked to organise inspections of the ambulances. Savenda would be among the bidders and organize the controversial trip.