How a Supplier Handcuffed Malawi Police to dubious deal

Police & Soldiers Paid Supplier Billions Based on LPOs

BY PIJ REPORTER

The Malawi Police Service (MPS) is supposed to be the custodian of the law as an enforcement agency, but procurement scandals, bordering on illegal transactions, seem to be dogging the agency with frightening regularity, from food rations deals to supply of uniforms.

This time, the whole police was forced—allegedly— by a little-known supplier, for years, to pay astronomical sums of cash, based on an LPO an officer in the Police Service sent to the company.

According to a source close to the matter, the actual figure, based on the payments racks in ‘several billions kwacha’ and the practice extended to other suppliers as well, such as Karim Batatawala’s companies. These companies too, supplied materials and goods to police services without signing any contracts with police.

When police stopped Mas International from using the Local Purchasing Order (LPOs) to supply the materials—the company sued.

PIJ can report on how Mas International, has since 2015, been claiming huge sums of money from government for alleged breach of contract with Malawi Police Service (MPS).  And the said contract doesn’t really exist, what the Mas International calls a contract is an LPO the company was asked to produce for police for the supply of uniforms.

Procurement laws make it mandatory for government ministries, departments, and agencies to sign contracts for certain thresholds of procurements and also seek no objection or approval from the Public Procurement and Disposal Authority (PPDA).

The threshold is revisited by PPDA annually and established by Section 9 of the Public Procurement Act.

In 2018, for example, MPS could not make any procurement above K40 million without seeking ODPP approval, and every public entity making a procurement whose value was K50 million was supposed to publish details of the contract in public.

Goods that could be procured via quotations were limited to K10 million while any good between K10 million and K400 million had to be subject to open tender using the National Competitive Bidding framework and also subject to approval by PPDA. Above K400 million, procurement had to be subject to open tender using the International Competitive Bidding framework and also subject to approval by PPDA.

However, at MPS, billions were being paid using just old LPOs with the supplier coming back, year in and year out, to provide goods and claim more cash.

Investigations show that the practice was also happening at other security agencies including the Malawi Defense Forces (MDF) and Immigration, prompting Attorney General Kelekeni Kaphale during Peter Mutharika era, to flag out the transactions, and report the matter to ACB.

But for years nothing happened. Now that the matter has reached the attention of the new Attorney General Thabo Nyirenda who appears on an anti-corruption, anti-graft, anti-fake compensation claims, anti-wastage of state resources crusade, the police have obliged, paying the company.

According to a letter by the Attorney General addressed to the Director General of graft-busting Anti-Corruption Bureau (ACB), the arrangement could construe abuse of contracts.

MPS issued several LPOs to Mas International to procure police uniforms on demand and the company claims that the LPOs constituted binding contracts Malawi Police Service is under an obligation to procure the uniforms specified in the LPOs. 

Reads the letter: “A review of the LPOs reveal several lapses in the manner in which the procurement was handled. The transaction also breached the Competition and Fair Trading Act. The uniforms stated in the LPOs are not needed by the Malawi Police Service. “

It adds: “Former Attorney General, Mr. Kalekeni Kaphale recommended that the Anti-Corruption Bureau should investigate the matter but nothing tangible happened. Huge amount of money has been lost under this dubious contract. My view is that the parties involved committed offences under the Corrupt Practices such as abuse of office and aiding and abetting public officers to abuse office.”

In an interview with PIJ, former Attorney General Kaphale recalled flagging out the contracts and recommending the investigation.

“They were contracts of police and immigration. The LPOs were old and they kept drawing beyond the amount of LPOs. It was happening at police and MDF as well,” says Kaphale.

What do we know about Mas International?

The company has no website so the PIJ had to dig for what else is available online to find out the details of the supplier Mas International.

The company was reported to the Anti-Corruption Bureau by civil society group, Human Rights Defenders Coalition (HRDC) after it was awarded a contract by the Malawi Energy Regulatory Authority (MERA) to supply fuel—accusing the energy regulator of flouting procurement rules in awarding of the contract.