CMST loses K196 million in masks deal
At least K196 million has been blown in a procurement deal which Central Medical Stores Trust (CMST) entered with Reliance Trading Company to supply them with 1,400 N95 facemasks at K1400 each.
A settlement agreement from the High Court, dated May 25 2021, indicates that the two sides had mediation on May 6, 10 and 12 2021, when the parties agreed that the price per facemask be K1,400 from K1,700.
The court directed that the K196 million be paid by May 31 2021.
Lawyer for the claimant Kuleza Phokoso confirmed Sunday that the price was reduced to K196 million from K234.6 million and the case was closed.
Initially, the High Court ordered CMST to pay Reliance Trading K234.6 million for 1,400 N95 facemasks that the company supplied to CMST.
Reliance Trading, through lawyers Phokoso and Company, took the matter to court after CMST refused to pay after the company duly supplied the facemasks.
Documents show that, in February 2021, CMST ordered 140,000 N95 facemasks valued at K234.6 million from Reliance Trading, through Local Purchase Order (LPO) number CMST 000719 as an urgent purchase.
The order specified that the facemasks ordered for purchase were the N95 type, which were like the facemasks the company had previously supplied on an immediate past order and on which the course of dealing between the parties in regards to facemask supplies was built.
Reliance Trading accepted the LPO and sourced the facemasks.
On February 5 202I, the company delivered the facemasks to CMST, which took delivery and duly executed a delivery note.
CMST, further after the delivery, told the company that the facemasks supplied had been approved by the Ministry of Health and that it was processing payment.
However, in breach of the concluded contract of the sale of the goods, on March 2 2021, Reliance Trading received an email from CMST informing it that the facemasks had been rejected by their customer and requested the company to collect the goods.
CMST further refused to pay the price for the goods, which forced Reliance Trading to seek court redress.