K2tn claims saddle government


By Mandy Pondani

Government has said it is struggling to settle claims in excess of K2 trillion from private firms, contractors and companies emanating from legal compliance anomalies of contracts.

Treasury spokesperson Williams Banda said this in an interview Friday following concerns from Attorney General (AG) Thabo Chakaka Nyirenda, who described most of the claims as outrageous and pure theft.


“The bulk of our payments are statutory obligations that compel us to go into borrowing. The Attorney General is right; we have a challenge on matters of contract negotiation and implementation. We have weaknesses in project management that breed so much controversy, thereby costing government billions,” Banda said.

Nyirenda said his office is having a tough time in challenging court determinations against government in which private firms, most of them owned by non-indigenous businesspersons, are demanding huge sums of money.

He said a majority of such claims are made in instances where such companies never supplied any services or goods to the people of Malawi but government was found in breach of terms of contract.


“The claims are more than our annual budget, technically in excess of K2 trillion. There are some firms that have just so many demands, I will give you an example of Batatawala; him alone has cumulative claims of about K250 billion. There are court judgements, we are appealing and defending government in all those cases,” Nyirenda explained.

He also said government ministries, departments and agencies (MDAs) are most of the times embroiled in controversy due to dubious award of contracts to companies that are most of the times owned by the same individuals.

Nyirenda has since suggested to Parliament and other stakeholders to have a register of  beneficial owners of companies in which those that are suspicious and have records of fraud would be deregistered together with the shareholders.

“Most of the deals border on theft. What I have seen is that there are at times 30 companies owned by one person and compete against each other during bidding processes. We need to start banning such companies and completely stop them from doing business with government,” the AG said.

He added: “Need I say that not all non-indigenous companies are dodgy; actually some local ones are dodgy too. Just that so far, most of these huge sums are demanded by Indian-owned entities.”

Citing an example of a court case in which his office is challenging a K30 billion combined claim by Savenda and another company over supply of basic life support ambulances to Ministry of Health, the head of Malawi’s bar alleged that most of the problems arise from MDAs where some public officers collude with companies to defraud government.

Following revelations that some government officials pocketed allowances from some of the bidders and went on evaluation tours in Dubai and Zambia during the procurement process in 2019, there have been two bid cancellations resulting in lawsuits against government, even though no single ambulance was supplied.

“For those claims to arise, it starts from MDAs where transactions of those contracts are concluded. We need to start prosecuting such officers and ordering them to pay if we are to save public resources,” Nyirenda added.

Meanwhile, Legal Affairs Committee of Parliament Chairperson Peter Dimba has said they are also concerned about what he termed as shocking determinations from courts against government.

“We commend courts that have trimmed some reasonable amounts; suffice to say that we want to engage the Judicial Service Commission over some shocking amounts that are awarded to contractors or companies,” Dimba said.

But Judiciary spokesperson, who is also Registrar for the High Court and Supreme Court, Gladys Gondwe, said yesterday courts operate within their constitutional mandate of protecting, interpreting and enforcing the law.

“When those judgements are arrived at, the courts deliver within that mandate in an independent and impartial manner. Where the judgment is not in tandem with the dictates of the law, the law provides for remedial measures which aggrieved parties can follow,” Gondwe said.

The office of the AG has a 10-member legal team against the required number of 40, a thing which apparently throws spanners into efforts to effectively defend some cases.

The office also gets monthly funding of K20 million. According to Nyirenda, the funds are not enough to match the workload.

Recently, the AG said he is scrutinising about K800 billion worth of compensation demands from lawyers representing different people in the country.

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