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Questions over Malawi-Mozambique K48 Bn Railway Project

Questions over Malawi-Mozambique K48 Bn Railway Project

  • Chakwera Contradicts with his Secretary
  • ACB to probe award of contract to Mota-Engil

By Gregory Gondwe

The Anti-Corruption Bureau (ACB) is investigating the awarding of a K48 billion contract to Mota-Engil for reconstruction of part of the Mozambique- Malawi railway line from Marka to Bangula on allegations that the award of the tender was “dubiously done.”

And despite President Lazarus Chakwera giving the go-ahead to Ministry of Transport and Public Works to award contract for reconstruction of the said railway line, the Secretary to President and Cabinet Zanga-Zanga Chikhosi has put the process to award contract on hold – a development which will also contribute towards the delay of the project which is way behind time.

ACB director general Martha Chizuma has confirmed that the graft-busting body has indeed received a complaint on this matter – barely two days after the Ministry of Transport and Public Works published an intention to award a contract to Mota-Engil for the railway project, which is way behind time.

We have established that the Public Procurement and Disposal of Assets Authority (PPDA), in which the SPC sits as a board member, approved the award of the contract to Mota Engil on March 31 and then on June 16, 2021, in confidential memo, President Lazarus Chakwera gave the go-ahead to the Ministry of Transport and Public Works to proceed with the awarding of the contract.

But in another communication last month between Ministry of Transport and Public Works and the office of the SPC, it is indicated that the SPC stopped the process for reasons we are yet to understand.

The reconstruction of the 72 kilometre – stretch follows discussions between President Chakwera and his Mozambican counterpart Felipe Nyusi in October last year. The project aims to revamp the sena line that connects Malawi to Beira’s crucial port – a move that will reduce the cost of trade for Malawi.

Mozambique has already done half of its 44-kilometre stretch from Mutarara to Marka, but Malawi is yet to start the actual works due to what well-placed sources say “procurement politics.”

The ministry completed an evaluation of bids by last year, but a contract has not been awarded. Our findings show that five bidders participated in this tender, and Mota Engil was the successful lowest evaluated bidder (K48.2 billion).

Others were China Railway (K60.4 billion), China Civil Engineering Construction (K79.7 billion), D&M Rail Construction/Marbolo JV (K97.2 billion), and ABD/Golden Star/Lennings JV (K95.6).

“Kindly be advised that, based on information made available to the Authority, a ‘No Objection’ has been granted for the award of contract for design, upgrading, and rehabilitation of the railway section between Marka and Bangula to Mota Engil Africa at a contract price of K48, 244,861,524.98” reads the letter from PPDA dated May 31, 2021, and signed by acting director-general Irene Mlewa.

The letter from PPDA further advises the Secretary to Transport and Public works to notify the successful bidder and make sure that the contract is vetted by the Government Contracting Unit (GCU). Ministry of Justice and Constitutional Affairs and seek approval from the SPC in line June 30, 2020 circular. The Circular demands that all public procurements should have the approval of the SPC.

In a memo dated June 8, 2021, reference number C/ADM/1/2, the Ministry of Transport notified the President that it had settled for Mota Engil as a contractor for the first phase of the 201-kilometre railway project, which starts from Marka to Limbe, and the President approved.

Reads the President’s response dated June 16, 2021: “This is noted with thanks. This portion of the railway road needs to be done with speed”.

Even with the presidential approval, we are reliably informed that the SPC has stopped the process for reasons we are to understand. Both the SPC and the Secretary for Transport and Public Works Patrick Zimpita have not yet responded to our questionnaire sent to them separately.

Calling ACB

However, a complaint that we have seen has emerged and submitted to the ACB, alleging that some unnamed politicians have influenced the award of the contract to Mota-Engil.

According to the complaint, the evaluation team for this tender allegedly received verbal instructions from undisclosed sources to award the contract to the successful bidder.

It is further alleged that the approval from the Public Procurement and Disposal of Assets Authority (PPDA) was also done with an influence of what they call an “invincible hand.”  

On another note, the complaint questions the price quoted by the successful bidder, saying it is not realistic. Some items may have been deliberately omitted but would be included later once the low price awarded the contract. The complaint further details some of the projects in which the successful bidder allegedly bided lowly but ended up charging the government more than agreed in the name of variations.

“It is also our wish that during your process, you invite all tenderers to give their side of the story because we are aware that some politicians have been involved in pressurizing officials to favour Mota Engil,” reads the complaint addressed to the director-general Martha Chizuma.

According to our findings, ACB vetted the award of this contract in January this year under a letter reference number ACB/CPD/0521 signed by senior corruption prevention officer George Makande.  However, in this letter, the ACB indicated that it reserved the right to investigate should there be information pointing to the fact procurement procedures were not followed.

In a written response, Chizuma said they are currently looking at the complaint to decide what should happen next. Chizuma stressed that even if they vetted this procurement, it does not make it immune from investigation.

“I have seen the email of the complaint on this matter this afternoon (Sunday). Of course, we will subject the complaint to the usual screening processes before deciding what to do next. That said, even if ACB vetted, it does not in any way stop the bureau from investigating any allegations of Corrupt Practices like this one on this procurement,” Chizuma said.

Delays Hit the Railway Project

President Chakwera

In May this year, the two countries signed a memorandum of understanding which set March 2022 as the deadline to complete the reconstruction work – but it is unlikely for Malawi to beat the target due to what a well-placed source in the ministry of transport and public works calls “procurement politics.”

Ministry did an invitation for bids for this project in September last year, and the ministry completed evaluation by December same year.

We have established that the Public Procurement and Disposal of Assets Authority (PPDA), in which the SPC sits as a board member, approved the award of the contract to Mota Engil on March 31 and then on June 16, 2021, in a confidential memo, President Lazarus Chakwera gave the go-ahead to the Ministry of Transport and Public Works to proceed with the awarding of the contract.

But in another communication, in July, between Ministry of Transport and Public Works and the office of the SPC, it is indicated that the SPC stopped the process for reasons we are yet to understand as he has not responded to our questionnaire submitted him almost two months ago.

A confidential memo dated July 19, 2021, from Ministry of Transport to the SPC collaborates with what sources told us that there was a stop order. 

“As directed today, I am putting on hold the process to award Mota-Engil to rehabilitate and upgrade a 72-kilometre rail line from Marka to Bangula. I am attaching the government notice we wanted to put in newspaper today to finalize the process and the criteria used by our internal Procurement and Disposal Committee for evaluation as you requested.

I am also attaching a memo from His Excellency the State President Dr. Lazarus MacCathy Chakwera on the issue, just in case you did not see it. I will be waiting for your further guidance and directives,” reads the memo from Zimpita to SPC.

Speaking at the launch of the reconstruction works in Mozambique at a ceremony in Mutarara in May this year, Malawi’s consular general for Tete Province Jane Asani also told the gathering, which included President Nyusi, that Malawi had delayed because of Covid-19 and the death of former minister of transport late Sidik Mia who was the champion of the project.

Later at a statehouse b-weekly briefing, presidential press secretary Brian Banda also indicated that the project had delayed following the minister’s death even after, days earlier, claiming that the Ministry was fully functional with the deputy minister in place.

President Chakwera has expressed commitment to revamp railway transport which he believes is a catalyst for economic growth. According to the Project Feasibility study report released in 2015, Beira and Nacala account for over 90% of Malawi’s trade. 

For many years, the Sena Railway line connected Malawi to the port of Beira and other SADC countries such as Zimbabwe, Botswana, Zambia, and South Africa.   It was both competitive transport of people and goods.

The Sena line was closed around the 1980s following Civil War in Mozambique. Still, the railway line between Bangula and Limbe in Malawi continued to operate, serving mainly the sugar sector until floods damaged the line at Chiromo in 1996. Since then, only the section between Makhanga and Limbe has been operational.