By Cathy Maulidi:
The Office of the Ombudsman has launched an investigation into National Oil Company of Malawi (Nocma)’s K128 billion fuel procurement contract with QLV DigitalFx (Malawi) Limited.
Under the deal, 250,000 metric tonnes (mt) of fuel would be imported from Sheikh Ahmed Bin Faisal Al Qassimi, purportedly a trader based in the United Arab Emirates (UAE).
Ombudsman Grace Malera confirmed the development to The Daily Times Wednesday, saying Nocma had been given a 21-day period within which to submit responses, in accordance with applicable complaint handling procedures.
“As such, it is the office’s expectation that the responses will be received not later than 14th October 2024,” Malera said.
Section 126 of the Constitution of the Republic of Malawi gives the Office of the Ombudsman power to issue appropriate directives to remedy any wrongdoing by any party, in the event of such wrongdoing as established by the investigation”.
Nocma spokesperson Raymond Likambale did not pick our calls when we made attempts to get the company’s response.
These attempts included a WhatsApp inquiry, which hit a snag.
The Ombudsman’s intervention follows a complaint lodged by Youth and Society (Yas).
Yas urged the office to probe the fuel supply contract, alleging that it was being done in contravention of the country’s public procurement laws and procedures.
According to the contract, a Lilongwe-based Forex Bureau, identified as QLV DigitalFx, would procure 250,000mt of fuel (125,000mt of diesel and 125,000mt of gasoline) from the Sheikh on behalf of Nocma.
“The complainant further alleges that the contract is reportedly valued as $74 million (equivalent to K128 billion), with provisions for the supplier to be paid 50 percent of the contract sum upfront through the local forex bureau,” Malera indicates in a notice of investigation sent to Nocma.
According to Malera, the complainant further alleges that irregularities have been noted, including the absence of a competitive bidding process and Nocma’s alleged failure to adhere to mandatory procurement procedures as outlined in the Public Procurement and Disposal of Public Assets (PPDA) Act.
“The complainant submits that given the lack of transparency and the deviation from established procurement procedures, there is a risk that the public may suffer significant financial losses as a result of this deal.
“The 50 percent upfront payment, combined with the absence of competitive bidding, increases the likelihood of overpricing, poor service delivery, or even fraud. Thus, according to the complainant, it is in the public interest that this deal is scrutinised to ensure that public resources are not squandered,” Malera further says in the notice.
The Ombudsman has, therefore, requested Nocma to prove the legality of the procurement process, in terms of whether Nocma complied with the required procurement laws and procedures as stipulated under the PPDA Act.
The office also wants to establish whether there was a public tender or invitation for bids for the contract.
It also wants to understand why a local forex bureau, QLV DigitalFx, was awarded a fuel procurement contract of such magnitude and related information.
“Your office is requested to submit the responses as requested herein within 21 days from the date hereof, and for the avoidance of doubt, this should be not later than 14th October 2024,” the Ombudsman says.
Meanwhile, Yas Executive Director Charles Kajoloweka has said they would wait for the outcome of the matter.
“We are happy that our complaint has passed the admissibility and prima facie tests. We look forward to the findings of the inquiry,” Kajoloweka said.
Two weeks ago, our sister paper Malawi News reported about the deal.
The Public Procurement and Disposal of Assets Authority (PPDA) has since blocked the deal by rejecting to grant a ‘No Objection’ to Nocma’s request for ‘No Objection’ due to alleged noncompliance with regulatory requirements.
