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Government getting zero from passports

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The Tonse-led administration is not getting any amount of money generated from passports since assuming office last year, allegedly due to a lethargic K47.4 billion contract which the previous government made.

As of this moment, the government has not yet settled a $16 million (approximately K12.6 billion at current rate) balance it owes Techno Brain from the deal they inherited.

The public has been piling pressure on Capital Hill to fulfill its campaign promise of reducing passport fees, flexible issuance of driving licence, free water and electricity connection among others.

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Malawi News investigations can reveal that before the May 2019 Presidential Election, the previous Democratic progressive Party (DPP) led administration under former president Peter Mutharika signed a US$60 million (K47.4 billion at present day value) contract with Techno Brain to supply soft and hardware equipment and 800 000 passport books.

Our findings show that the taxpayer is being forced pay for the contract as the money being realised from the passport deal is deposited into a separate account and not the government’s Account Number One.

Techno Brain Malawi General Manager, Tionge Chipeta, refused to comment on the matter when contacted.

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However, Immigration Department spokesperson, Joseph Chauwa, conceded that they are way behind schedule in settling the bill.

“Government entered into a BOT [Build, Operate and Trasfer] contract for the

upgrade of the Passport Issuance System and introduction of an ePassport for Malawi with Technobrain Limited. This type of contract means that the contractor invested his capital into the project and payment will be made quarterly from the money collected as fees.

“It is a three year contract projected to issue 800000 passports to be able to service the contract amount…We have not been able to reach the quarterly projections as a result of travel restriction due to the Covid pandemic, meaning that we are way behind in repayments,” he said.

This week, Minister of Homeland Security, who is also Leader of the House, Richard Chimwendo, also said in Parliament that the Tonse Alliance Administration is failing to reduce the passport fees because the DPP administration signed an exorbitant contract with a company, which he did not mention, to supply 800 000 passports at $60 million.

Last year, the World Bank debarred Techno Brain Kenya and its sister company for alleged collusive and fraudulent practices, among them influencing awarding of contracts to their favour.

Techno Brain has a branch in Malawi, and according to the company’s website, it conducts business with the Malawi Government.

Such deals include a contract to design and implement an Integrated Financial Management Information System (Ifmis) for 35 local councils.

World Bank Country Manager for Malawi, Hugh Riddell, last year told this paper that as a public institution, the World Bank Group strives to ensure that critical development resources are used for their intended purposes.

“As noted on this list, as part of the settlement agreement with its parent company, Techno Brain Global FZ-LLC, which is described in the press release, Techno Brain (Malawi) is subject to the sanction of debarment with a conditional release for a period of ten months, followed by an 18-month period of conditional non-debarment. While under debarment, the firm will be ineligible for new contracts financed by institutions of the World Bank Group.

“While under the conditional non-debarment period, the firm will again be eligible as long as it complies with its obligations under the settlement agreement,” Riddle said.

The bank banned Kenya-based Techno Brain (Kenya) Limited, an IT-services company, for 28 months while its parent company, United Arab Emirates-based Techno Brain Global FZ-LLC (“Techno Brain UAE”) has been debarred for 10 months.

The two companies will be ineligible to participate in projects and operations financed by institutions of the World Bank Group.

According to a World Bank statement, the ban relates to the Integrated Public Financial Management Reform Project II in Liberia.

The project was designed to improve domestic revenue mobilisation systems and strengthen financial control and accountability in public finances.

Techno Brain Kenya and Techno Brain UAE engaged in an arrangement to obtain and edit confidential bidding documentation so as to influence the awarding of a contract in their favour.

“Techno Brain Kenya was subsequently awarded the contract, even though its bid did not meet tender requirements, thus necessitating a substantial reduction in the extent of work provided under the contract. Furthermore, Techno Brain Kenya, guided by Techno Brain UAE, claimed technical qualifications of sister companies as its own to meet contract specifications. These actions are considered collusive and fraudulent practices, respectively, as defined by the World Bank’s Procurement Regulations,” reads part of the statement.

The statement adds that under the terms of the settlement agreement with the World Bank, the company commits to develop an integrity compliance programme consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines.

Techno Brain, founded in 1997 is headquartered in Nairobi, Kenya. It provides IT Solutions and IT Training among other services.

The company operates in 19 countries across the world including Research and Development centers in India and Kenya.

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