Chinese firm’s contracts grab
By Deogratias Mmana:
The awarding of a contract to a Chinese firm, China Civil Engineering Construction Corporation, to relocate water pipes off Lilongwe’s six-lane Kenyatta Road project, which it is also implementing, adds to several other projects awarded to the same company.
And while transparency and governance experts have raised doubts, government has defended its move, insisting it will ensure objectives of the projects are met.
On April,11, 2022, the government published a notice of intention to award consultancy services and works contracts to five companies, two of which were the same company; China Civil Engineering Construction Corporation.
In the first case, under procurement number RA/ DEV/BT-MHG/2021-2022/02, the company has been awarded a contract to upgrade 20 kilometres of Lirangwe- Chingale-Machinga Road (S139/7401) to the tune of K7,262,490,212.66.
The same company has also been awarded a contract for capacity improvement of Kaunda Road (Bingu National Stadium Roundabout- Chendawaka Junction) under procurement number RA/DEC/ LLC/2021-22/06 at the cost of K8,552,953,381.26.
The government through Lilongwe Water Board has also awarded China Civil Engineering Construction Corporation of Post Office Box 30336, Lilongwe, Malawi, a contract to relocate water pipelines for capacity improvement of Kenyatta Road and Sharrar Street in Lilongwe.
And on March 17, 2022, Lilongwe Water Board wrote the Public Procurement and Disposal of Assets Authority asking for a No Objection to grant the award to the company under contract number LWB/W/KSR/22/1.
“I write to seek your approval for Lilongwe Water Board to proceed with the award of contract for procurement of works for relocation of water pipelines for capacity improvement of Kenyatta Road and Sharrar Street as follows: recommended bidder; China Civil Engineering Construction Corporation P.O. Box 30336, Lilongwe, Malawi; contract price MK5,242,933,311.64.
“We attach hereto minutes of Internal Procurement and Disposal Committee (IPDC) meeting in which this matter was discussed, the bidder document, bids and the bid evaluation for the above noted tender which was realized through Open Tender Procurement Method for your review and approval,” reads the letter from LWB.
Bid opening minutes dated February 25, 20222 show China Civils was the fourth lowest bidder at K5.2 billion. The other three lowest bidders were Victory Vision Construction at K3.4 million, Malbro International Ltd at K4.8 billion and Project Group Ltd at K3.6 billion.
China Civil Engineering Construction Corporation, while it is awarded a contract to relocate pipelines on the Kenyatta Road and Sharrar Street, it is also awarded the contract to upgrade the same Kenyatta Road and Sharrar Street to a six-lane road with installation of street lights-all costing about K20 billion.
President Lazarus Chakwera launched this project in August 2021. It was supposed to be completed in 18-months but almost 10 months later, there is no progress on the road.
Centre for Social Accountability and Transparency (Csat) has since wondered if the contractor would be able to implement all the projects to desired quality and in time.
“Does this company have the capacity to handle all these projects simultaneously? I am afraid this might delay completion of the projects and it might even compromise the quality of work,” Csat Executive Director Willie Kambwandira said.
Kambwandira also said he hoped that China Civil Engineering Construction Corporation will abide by the 30 percent legal requirement to sub-grant the works to local companies.
“Under the construction laws and regulations a foreign company is supposed to sub grant at least 30 percent of the shares to local companies. So what is important is to make sure that these laws are enforced to avoid monopoly of multinational corporations,” Kambwandira said.
He said even if it were that procurement processes and procedures have not been flouted in this case, “we have seen such preferences have ended up fueling corruption in the past.”
Also adding his views is Human Rights Defenders Coalition (HRDC) Chairperson Gift Trapence.
“HRDC is not against offering contracts to any company that has bid and won through equal footing. Government should also be able to have a reality check on companies which are dominating the same industry. There are so many players in the sector and giving one company so many contracts compromises finishing such projects within the time lines and also compromises the quality of the work.
“It’s high time that government should spread the risk by also giving opportunity to other companies who are equally good. We used to see the same trend during the time of DPP where some contractors were more preferred than others. This is also a recipe for corruption. Let government and government departments level the ground by also giving equal business opportunities to equally professional and capable contractors,” he said.
We did not manage to get a comment from China Civil Engineering Construction Corporation on its capacity to handle all the projects as expected.
However, Minister of Transport and Public Works Jacob Hara has backed both the company and the government for awarding the contracts to one company.
“Each time a contractor bids for a job, they provide information that they have capacity to handle such a job. The fact that they bid for a number of jobs and won multiple contracts, means they provided bid securities for each project. That is also a means of ascertaining capacity. They obviously must have been other issues that evaluation committees considered as well,” Hara said.
Commenting on two specific tenders falling under his ministry, thus the upgrading of 20 kilometres of Lirangwe- Chingale-Machinga Road and capacity improvement of Kaunda Road, Hara said:
“Both these jobs were tendered a while ago and thus the issue of one contractor with multiple contracts didn’t occur then as each bid is handled by a separate adhoc evaluation committee.”
But he warned that the government would not hesitate to terminate the contracts if capacity issues are identified.
“Should we see that the contractor has capacity issues during implementation, we will not hesitate to terminate the contract as we have done with other projects before,” Hara said.
He disclosed that the government is working on a policy to build capacity and empower local Malawian firms.
“We will shortly announce measures on how we will achieve that,” he said.