FOREX BUREAU: Ombudsman launches probe over MK128BN fuel deal

The controversy around the awarding of the MK128 billion fuel contract is refusing to die. The Public Protector says it has launched an investigation following a complaint from governance watchdog Youth and Society (YAS).   

Ombudsman Grace Malera has confirmed processing a complaint from YAS and her office is due to launch an investigation

BY PIJ REPORTER 

The Office of Ombudsman has launched an investigation into the controversial K128 billion fuel procurement deal between the state-owned National Oil Company of Malawi (NOCMA) and little-known QLV DigitalFx (Malawi) Limited following a complaint from 

Anti-corruption watchdog and civil society grouping, Youth and Society (YAS) has penned Malawi’s public protector to stop and probe

QLV Digitalfc Malawi, as exposed by a PIJ investigation, is due to receive the contract sum on behalf of a purported company representing the interests of the royal family of the United Arab Emirates.

The deal has raised suspicious for several reasons including the fact that half the contract sum will be paid in advance before any supplies will be made to the Malawi government meaning the contract is likely to be financed by Malawian taxpayers; the contract sum will be paid to a Malawian account in Malawi kwacha when fuel is imported from outside the company claims to be UAE based and the amount of lawbreaking that has come with the deal.

On the law-breaking front, the contract for procurement of 250,000 metric tons of fuel (125,000 metric tons of diesel and 125,000 metric tons of gasoline) was granted without any open tender as required by law.

In its letter to the Office of the Ombudsman, Mzuzu-based YAS said the contract has flouted the country’s laws, citing–just as the PIJ investigation–that the Public Procurement Act requires public entities to use competitive bidding processes for contracts of this magnitude, particularly Section 31 of the Public Procurement Act that mandates that contracts exceeding K10 billion must be awarded through International Competitive Bidding (ICB).

“The contract is reportedly valued at US$74 million (equivalent to K128 billion), with provisions for the supplier to be paid 50% of the contract sum upfront through the local forex bureau.  However, several irregularities have been noted in the manner this contract was awarded, including the absence of a competitive bidding process and NOCMA's failure to adhere to mandatory procurement procedures as outlined in the Public Procurement and Disposal of Assets (PPDA) Act,” reads the letter. 

The civil society grouping also cited the 50 percent advance payment as a red flag.

“The decision to pay 50% of the contract sum upfront to a local forex bureau further exacerbates concerns surrounding the transparency of this deal. This payment arrangement deviates from standard procurement practices, where payments are typically made upon delivery of goods or services. The involvement of a forex bureau in a contract of this nature also raises questions about whether proper financial safeguards are in place to protect public funds,” reads the letter in part.

YAS Executive Director Charles Kajoloweka penned the letter to Ombudsman

Ombudsman Grace Malera confirmed receiving the letter in a written response to PIJ.

She said the Office of the Public Protector was now processing the complaint.

 “Yes, I can confirm that the Office of the Ombudsman is in receipt of the complaint from YAS. The complaint is undergoing screening processes in line with the office's complaint-handling procedures. If it is established that the issues raised fall under the jurisdiction of the Ombudsman, the office will proceed to commence investigations into the matter,” Malera said. Recently, local media reported that QLV DigitalFx (Malawi) Limited representatives were granted a contract without following the procurement laws.  There have also been concerns about the company’s alleged links to a royal family in the United Arab Emirates, raising suspicions, especially as all payments were to be made via the Lilongwe-based Forex bureau, which its directors also own.