Civil society organisations, led by National Advocacy Platform (Nap), have written Ombudsman Grace Malera, asking her to probe purported maladministration in the arms’ procurement deal which has seen Capital Hill initiating a $4,983,400 payment to a firm related to United Kingdom (UK)-based businessman Zuneth Sattar.
In a letter dated February 6 2024, signed by Nap Chairperson Benedicto Kondowe, the CSOs ask the Ombudsman to “urgently” intervene in the issue, claiming that there are portents of maladministration in the way the issue has been handled.
The deal involves the Malawi Defence Force (MDF) and International Armoured Group FZE.
According to the letter, the CSOs say after their recent meeting with Defence Minister Harry Mkandawire on February 1 2024, they feel that the office of the Ombudsman has work to do on the issue.
“Our concerns primarily centre on the potential abuse of power by officials involved in the arms deal, ranging from the execution of the deed of assignment to the initiation of the initial payment totalling $4,983,400, which is part of a contract price of $19,993,600.
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“Additionally, we request scrutiny into the decision making and financing of the pre-shipment inspection to Dubai [United Arab Emirates] by the procuring authority,” the letter reads.
The CSOs argue that it is their belief that a comprehensive investigation by the Ombudsman would shed light on any potential irregularity or instances of abuse of power in the procurement process, thereby upholding principles of accountability and the rule of law.
“We are also open todiscuss this matter with you further. We are available to meet at your earliest convenience. Your prompt attention to this request is appreciated, and we eagerly await your response. Please accept the assurances of our highest consideration,” the letter says.
Office of the Ombudsman spokesperson Mandy Pondani Sunday acknowledged receipt of the letter.
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“I can confirm. We are in receipt of the letter. Like with any other complaint, it will go through our screening process to assess its merits and whether it falls within [the] Office of the Ombudsman [‘s] jurisdiction,” Pondani said.
The CSOs have also penned the Ministry of Finance to suspend the finalisation of payment to International Armoured Group FZE.
“We have identified critical aspects of this transaction, particularly the initiation of the payment process by the Ministry of Finance, which require attention before the aforementioned payment is completed.
“Additionally, it would be important [to ensure that] the said payment is interrogated within the provision of Section 46(c) of the Public Procurement and Disposal of Public Assets Act (Chapter 37:03). The said section reads: ‘A procuring and disposing entity may terminate a procurement contract for convenience if it is deemed in the public interest. Termination is subject to payment for completed work or services, reimbursable expenses, goods specially manufactured, and reasonable termination costs, excluding lost profit,” the letter reads.
They argue that given the intricate nature and lack of clarity surrounding the contractual arrangements, as well as the transfer of obligations from Malachitte to International Armoured Group (IAG), they believe that it is imperative to underscore their call for a suspension.
Treasury spokesperson Taurai Banda was not immediately available for comment yesterday.
However, briefing reporters in Lilongwe last week, Information Minister Moses Kunkuyu and Mkandawire said the government has not engaged in any new contract with Sattar-related business entities; neither are there plans to do the same.
Kunkuyu said the legal effect of terminating a contract for public convenience is that government is, as a procuring entity, under obligation to pay for goods supplied, goods delivered or goods that were under production at the time of the termination.
“Government wrote Malachite FZE on 11 January 2022, informing them that the contract for the supply of APCs had been terminated. Malachite FZE was advised that the company would be paid for only the value of equipment supplied, or specifically made, or which are being specifically manufactured under the procurement contract and not for lost profits.
“In this regard, government, through the Auditor General, instituted an audit and other investigations which established that some goods were already delivered while some had already been produced. In view of this discovery, and in line with Section 46 of the PPDA Act, government is under legal obligation to pay for the goods produced and/or delivered.
“The government, therefore, initiated payments to International Armored Group FZE, the manufacturers of the equipment for the produced APCs. The payment is yet to be externalised by the Reserve Bank of Malawi. However, there has been misinformation and media sensationalism to the effect that the ‘government is still in bed with Sattar’ and making payments to Sattar’s companies despite termination of the contracts regardless of the above facts,” Kunkuyu said.
