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Lloyd Muhara named in K57 billion Escom genset deal

Lloyd Muhara

Reyneck Matemba

Former chief secretary Lloyd Muhara and two others are said to have been at the centre of the K57.7 billion emergency power generators deals which the Electricity Supply Corporation of Malawi (Escom) awarded to Aggreko in November 2017 without following procurement procedures.

The deal to hire the emergency power generators was initiated by Escom before it was cancelled and handed over to Electricity Generation Company (Egenco) and then handed back to Escom where it was awarded to a company that was earlier rejected because it did not follow procedures.

In a letter that we have seen from Human Rights Defenders Coalition (HRDC) addressed to Anti-Corruption Bureau (ACB) Director General Reyneck Matemba, the coalition questions the manner in which the emergency power generators deal was awarded to Aggreko with three top officials seemingly facilitating it.

HRDC zeros in on how three top senior officials from the government, State House ad Escom got involved in the deal and made recommendations to Escom to hire companies without going through the bidding process.

Reads the HRDC letter: “The Chief Secretary [Muhara], then Economic Advisor to the President [Collins Magalasi] and the then Escom Board Chairman [Perks Ligoya] brought Altaaqa Energy to Escom and instructed Escom to hire emergency generators from them. Escom thought the pricing was expensive. The Board Chairman then brought back Aggreko, who were hired without going through a bidding process.”

HRDC is asking ACB to investigate the role of the three top officials in the matter.

HRDC Chairperson Gift Trapence confirmed authoring the letter, saying the move is one of their whistleblower initiatives.

“The Board Chairman then brought back Aggreko who were hired without going through a bidding process. We have information that Aggreko had brought second hand generators that they had been using in Madagascar and that their generation capacity is less than the indicated 78 megawatts.

“We are further informed that the ACB started probing these allegations but were forced to curtail the investigations. We appeal to ACB to commence the investigations as soon as possible and that the anti-corruption body should update the nation when the investigations have started,” reads the letter.

Matemba confirmed receipt of the letter but did not say much about the alleged malpractices. Efforts to speak to Muhara proved futile as he could not pick up our calls.

The controversy surrounding procurement of the generators started in August 2017 when Muhara cancelled the initial deal for Escom to hire the generators and instructed Egenco to take over, according to the documents that The Daily Times has seen.

“We are further informed that Egenco advertised for open tenders and recommended that the bids be awarded to Aska Energy and Master Power,” reads part of HRDC’s letter.

The cancelled bids were for Mapanga, Kanengo and Chinyama, and before the cancellation, it was recommended that two sites in Mapanga and Kanengo, valued at $34,641,918.47 and $24,925,247.77, respectively, be awarded to APR Energy and one site in Chinyama valued at $18,871,083.57 be awarded to Aggreko.

On August 29, 2017 the office of the Director of Public Procurement wrote the then Escom Chief Executive about its findings following an investigation the ODPP has conducted into the hiring of the emergency generators.

Signed by the then Director of Public Procurement Paul Taulo, among others the report found that the tendering process was followed but the evaluation state was not properly concluded.

Following the presentation, another evaluation was conducted in March 2017 and the results changed in favour of Aggreko International Projects which was awarded all three lots [sites].

The investigation found the level of accuracy of the information presented by the complainant to be very high and as such, the investigation concluded that there must have been a leakage of confidential information to suppliers before the evaluation process was concluded.

In its recommendation, the report suggested the immediate cancellation of the tender number ESC617/RT/S/FY2016- 17.

After the cancellation, however, all sites were awarded to Aggreko after Escom’s Internal Procurement Committee (IPC) disregarded the recommendations.

Egenco, however, thought the hiring of emergency generators was very expensive and informed the Chief Secretary of this fact. The Chief Secretary did not respond to this letter and Egenco cancelled the bidding process.

Meanwhile Escom was processing a separate deal with Aggreko that got all the three sites without bidding. Altaaqa Energy, on several occasions, tried to inform both the Chief Secretary and the then Escom Board Chairperson of the misprocurement but the two did not help.

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