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Bribery claims against Mera boss

Contractor for the K6.8 billion Malawi Energy Regulatory Authority (Mera) office complex project, Terrastone Limited, has refused to give an alleged bribe to Acting Chief Executive Officer Ishmael Chioko who is said to have demanded such for the continuation of the project.

Terrastone Limited Managing Director Jose Da Costa has written a protest letter to Mera and threatened to report Chioko to the Anti Corruption Bureau. The letter has the headline: “Protest at attempt to solicit a bribe in connection with the contract for the construction of Mera office complex”.

Meanwhile, Mera has suspended the project for the reason Da Costa believes is his refusal to offer a bribe to Chioko.

In the letter dated October 24 2016 addressed to Chioko with a copy sent to Mera’s board chairperson Bishop Bvumbwe, Da Costa strongly protests against the bribe and warns Chioko that he is walking on a “legally perilous path” if he persists.

Da Costa also doubts Chioko’s statement that it was Mera board that had sent him to extort a bribe from Terrastone Limited.

“I wish to register our bitter protest at what I perceive as an attempt on your part to extort a bribe from us to perform a contract that we already won under a clean and transparent process and for which we are already on site to start the works. I even seriously doubt that the Mera Board which I have a lot of respect for could send you to do this for them. I believe this was your personal scheme for your personal benefit,” reads the letter.

Da Costa further says: “Following my refusal to offer you a bribe, you have written to the architects as the Project Managers to instruct us to suspend the works. There is no other reason for this action than my refusal to succumb to your advance for a bribe. This is not only shameful but also scandalous, and potentially costly to yourselves in damages if you persist on this legally perilous path.

“I have copied this letter to the Chairman of the Mera Board of Directors so that he and through him his distinguished members of the Board should know about this and your character, and I reserve my right to report your conduct to the Anti-Corruption Bureau which unfortunately would also tarnish the image of the Board members who you claimed to have been the ones that sent you to solicit a bribe for them from us.”

The letter has Mera’s stamp showing that it was received on October 26 2016.

According to the letter, Chioko invited Da Costa to meet him “at a neutral place” which happened to be the Presidential Hotel at city centre in Lilongwe.

“You told me at the meeting that we should work together and that I should assist you if the contract is to run smoothly. I did not understand this and when I asked what you meant you said the owners of the project are not happy not to have something for themselves out of this project,” says Da Costa in the letter.

And he adds: “…you said the owners of the project are Mera Board Members and that these want to have a benefit from the project if it is to proceed. I told you that we do not work like that and repeated that we had been awarded the contract following a transparent tendering process which took place.”

On October 19, 2016, project managers Norman+Dawbarn (Mw) Ltd wrote Terrastone Ltd passing a message from Mera to suspend construction works. The letter has reference number IJC/rcn/M498/51.

“We refer to the Pre Contract Meeting and site handover procedure conducted on 19th April 2016 on the above and our letter dated 30th August 2016. We have been instructed by the Client to delay site mobilisation works further until both parties have signed the contract. You are therefore instructed to stop all site operations except guarding services in accordance with Clause 30.1 of the Conditions of Contract.

“You will be informed accordingly once all formalities are completed. Any inconvenience caused is regretted,” reads the letter signed by I.J Chitsanthi, director at Norman + Dawbarn.

But before the Norman +Dawbarn letter, Mera’s Procurement Officer Saukila Chanza wrote Terrastone on September 1 2016, just after the court threw out ACB’s restriction order application, not to immediately mobilise resources to the site but to wait for the board’s direction.

And on September 13 2016, former Mera Acting CEO Welton Saiwa asked for professional advice from Director of Buildings.

And on October 13 2016, Chioko wrote Norman + Dawbarn to tell Terrastone to stop works on site. The project manager did so on October 19 2016.

In an interview on Thursday, Da Costa said he could not comment on a private communication between Terrastone and Mera.

But he said construction works had started and two critical requirements, thus issues of insurance and performance bond, were already done.

The project which is supposed to be completed in two years has already delayed by six months.

And Chioko yesterday confirmed meeting Da Costa but said he was telling the contractor to stop works because he continued working despite earlier communications stopping him.

“I told him that Mera Board are his masters and he should listen to them. May be he interpreted that as if I was demanding money,” said Chioko adding that there is need to sign the contract before construction works.

Chioko said he has instructed his lawyers Lexon and Lords Practitioners to respond to Da Costa’s letter demanding an apology and withdrawal of the letter. He also disclosed that Mera Board chairperson Bishop

Bvumbwe received the letter.

“The allegations are baseless. I have instructed my lawyers to react to the letter to protect my rights and repair the damage caused. That is libel and he will have to produce evidence. I do not think he will win that in court,” said Chiwoko a lawyer himself.

He said he has no intentions to stop the project but that it had to be done in a proper way. He also said his letter stopping the works is just a follow up to earlier letters on the same.

Deputy Director of ACB Reyneck Matemba said on Thursday that he has seen Da Costa’s protest letter but is waiting to receive it formally to prompt ACB to start investigations.

On Thursday, Bvumbwe asked to be called on Friday and he did not pick his phone when we called.

Troubled project

The project in question has gone through troubled circumstances as the ACB also stopped it in August to conduct investigations related to contractor procurement process.

ACB’s action followed reports that Mera’s suspended CEO, Ralph Kamoto, was expecting to get US$400 000 from Terrastone to influence him to make unilateral decision to give the contract to Terrastone.

Kamoto then accused ACB Director Lucas Kondowe of forcing him to award the K6.8 billion contract to build the body’s headquarters in Lilongwe to a company that failed in the bid.

But the ACB boss dismissed the allegations, arguing that the Bureau is aware of its mandate under the law.

Kamoto reported Kondowe to the Attorney General Kalekeni Kaphale claiming harassment and that what the ACB boss was trying to get from Mera was “corruption of the highest order and abuse of his office”.

Kamoto also told Kaphale that Kondowe threatened to put the project into a “neutral gear” if Mera did not give the contract to Sogecoa Anhui Construction Company although Mera’s Internal Procurement Committee selected Terrastone Limited at its meeting on April 4 2016.

Kamoto was later sent on forced leave, alongside Mera’s Director of Finance Elias Hausi, to pave way for investigations into allegations of misappropriated K3 billion from the Price Stabilisation Fund (PSF).

Enter Chioko

In mid September, Chioko was appointed Mera’s acting CEO only for revelations to emerge that he is actually answering charges of money laundering in the infamous plunder of public resources, christened Cashgate and is currently on bail.

Spokesperson for Anti- Corruption Bureau (ACB), Egritta Ndala, confirmed in an interview that Chioko was arrested on October 21, 2014, for being a suspect of Money Laundering contrary to Section 35 (1) of the Money Laundering, Terrorist Financing and Proceeds of Serious Crimes Act in relation to cashgate.

The revelations led to an uproar from civil society organisations such as Centre for Human Rights and Rehabilitation and Centre for the Development of People who called for his immediate removal.

But government, through Attorney General Kalekeni Kaphale, dismissed the call, arguing that Chioko was only a suspect.

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