The controversy surrounding the proposed FTJ Chiluba University has given rise to public debate and it has become a subject of many a political discourse. ON 12 May 2022, the erstwhile governing party- the Patriotic Front held a press conference, ostensibly to respond to the political attacks levelled at the party leadership and former Cabinet ministers, following a couple of arrests by the Anti-Corruption Commission in relation to the disbursement of US$33 million for the project. It was expected that the PF would provide clarity on a number of lingering questions, but the party leadership focused on political banter and tried to distance itself from the saga. However, the party officials presented two confusing scenarios vis-à-vis the monies released for this project. Firstly, the Acting President of the party -Given Lubinda placed the onus on Hon Felix Mutati to explain to his colleagues in the UPND government where these funds were paid to. Hon Mutati has since responded that he was not the Minister of Finance at the time but he provides vital information on the disbursements made by government. Secondly, Prof Nkandu Luo, as former Minister of Higher Education, acknowledged that the US$33 million was paid as 15% counterpart funding and this was intended for the bank facilitating the loan arrangements. The narrative from the UPND government and its members is that the US$33 million was most likely misappropriated and accordingly those involved should be investigated and where necessary, funds recovered.
There are many moving parts to this story and clearly the general public deserves full explanation from the former PF government and to some extent the current UPND government. A perusal of information in the public domain, reveals a lot of “confusing facts” and all this underscores the need for the political leadership and technocrats from the past administration to correct the record so that we can all focus on the real issues of concern. Context matters and the following points provide further information which may enrich the discourse on this important matter of a university that was greatly talked about and never materialised and mysteriously some buildings “disappeared as lamented by Prof. Luo.
Background to the FTJ Chiluba University
In July 2012, former President Michael Sata, announced the establishment of a university to be called Luapula Province and to be located in Mansa. It is publicly reported that in November 2013, President Sata laid a “foundation stone” and this launched the project. It is not clear whether the PF government did budget for this project which in some circles was reported to have been estimated at US$50 million and expected to accommodate 1,000 students. In January 2016, the Luapula Province Permanent Secretary – Ms. Joyce Nsamba was reported in the Zambia Daily Mail to have indicated that the construction of the over K213 million Luapula University would commence after the end of the rainy season. She further stated that a consortium of three contractors had already been selected to start the long-awaited works. According to the Deputy Permanent Secretary, the site handover took place on November 20, 2015 and the three contractors were – China Energy Engineering, 15 MCC Africa and Ndilila Associates. Ms. Nsamba indicated that the construction works would take a duration of 104 weeks.
On 29 June 2016, President Edgar Lungu renamed the Luapula University, whose procurement process had commenced, after the second Republican President, late Fredrick Titus Jacob Chiluba. Of significance, the project now had two sites – FTJ Chiluba University – Mansa and FTJ Chiluba- Kasama. Again, it is not clear why a decision was taken to include a second campus in Kasama but this greatly changed the estimated costs for the project. There is a public record of an Environmental and Social Impact Assessment (ESIA) for the FTJ Chiluba University -Kasama, prepared by Greenfield Consult dated September 2017 and formally submitted to the Zambia Environmental Management Agency (ZEMA). The ESIA outlines that the Kasama university was planned to accommodate 1,500 students and it was to be constructed at a cost of US$110 million. The ESIA for the FTJ Chiluba University – Mansa is not available on the ZEMA website and this would have provided vital information on the official project description and the cost. However, on February 28, 2018, the Ministry of Higher Education Spokesperson, Ms. Kawanda Chiselwa, is reported to have said that the FTJ University -Mansa project would cost US$132 million and works were expected to commence in 2018 and be completed within 24 months. She further underscored that the logistical challenges that had slowed down implementation had since been sorted out. Basically, this means that the Mansa campus which initially was estimated at US$50 million had now moved to US$132 million. There is no official explanation for this change in scope and project costs and the public accountability is needed.
Funding arrangements and works contract
It is important to appreciate that there are two contracts at play and possibly more but most prominently, there is funding agreement and a works contract with either the consortium of three contractors mentioned in 2016 or just one main contractor – China Energy Engineering Corporation. This must be clarified so that the Zambian people can understand who was paid the US$33 million, given the different versions of facts out there.
It is not clear how the PF Government under President Sata wanted to finance the construction of the Luapula University, but available documentation shows that the PF under President Lungu intended to obtain a loan to finance the project. The total cost for the project is US$225 million. Hon. Joe Malanji, as Minister of Foreign Affairs, is reported in the News Diggers of 11 May, 2020, to have indicated that on April 21, 2020, he wrote to the Chinese Ambassador to Zambia Li Jie asking him to expedite the disbursement of a loan to facilitate the speedy implementation of the FTJ Chiluba University in Mansa. Hon. Malanji, contended that according to Ministry of Higher Education records, tthe US$255 million contract for design and construction contract was awarded to China Energy Engineering Group to construct the FTJ Mansa and FTJ Kasama universities. This information is contrary to what was presented by the Minister of Housing and Infrastructure Development – Hon Vincent Mwale on 16 October 2019 in Parliament, when responding to a question by the late Hon Mwenya Munkonge- MP for Lukashya – who wanted to know when the Lukashya University (probably a reference to the FTJ University -Kasama) would be constructed. Hon, Mwale in response stated that the construction of a university in Lukashya Parliamentary constituency, commenced in the year 2018. The estimated cost of the project was US$225 million for the two universities in Kasama and Mansa districts.
Two researchers – Deborah Brautigam and Yinxuan Wang from the China Africa Research Initiative (CARI) at John Hopkins University in the USA, provided clarity on the funding arrangements for the FTJ University project. CARI has been tracking Chinese lending to African governments and State-Owned Enterprises in Africa for past decade. Brautigam and Wang in a Briefing Paper (Zambia’s Debt in the Pandemic era) published in September 2021, highlight that the Zambian Government had in 2018 signed a loan agreement with the Industrial and Commercial Bank China (ICBC). They point out that the 2018 Mid-Year Economic Report for Zambia listed this loan as borrowed from ICBC and the loan commitment was for US$191 million (representing 85 percent) for the FTJ University in Mansa and Kasama. Brautigam and Wang, however, indicate that Chinese sources reported the loan as a syndicated export buyer’s credit with the participation of the Industrial Bank and that the project had been delayed by funding and disbursement issues. This position corresponds to what the Executive presented to the Committee on Government Assurances who were following up on the assurance to complete the FTJ University. The Executive is said in the Report of the Committee on Government presented in 2021 to the Fifth Session of the Twelfth National Assembly, to have indicated that the slow pace of construction works was due to the non-release of funds by Industrial and Commercial Bank of China (ICBC) who were the financiers of the project.
The Works Contract was signed with either the China Energy Engineering Group Co.Ltd or its subsidiary China Energy Engineering Corporation Limited. This is not clear. In the Company Annual Report of 2018 for the subsidiary -China Energy Engineering Corporation Ltd, it is reported that in 2018, the company successfully signed the contracts for representative international engineering projects including the Zambia FTJ Chiluba University. Of interest however is that this is a company founded on 19 December 2014, the company is a joint stock company with limited liability established and co-sponsored by the China Energy Engineering Group Co, Ltd. It is not apparent the procurement method of China Energy Engineering Group Co.Ltd adopted by the PF Government- was there an open tender or was this company selected on the basis of single sourcing?
Notwithstanding the identity of which of the two entities signed the works contract, Hon Joe Malanji in the April 2020 letter to the Chinese Ambassador indicated that the Zambian government had already fulfilled all the requirements for disbursement of the loan including the disbursement of 15 percent of the total contract sum to the contractor. The recent statement by Hon Mutati, is aligned with this position and he confirms that between 28 February and 1 June 2018, China Energy Engineering Group was paid US$33,750,000. The 15 percent therefore was not paid to the bank as claimed by Prof Luo or other PF supporters, but this money went to the contractor. This was an advance payment made to the contractor and it is important that information is provided on what these funds were intended for- was this part of the mobilisation resources to enable the contractor move on site? Did the Contractor provide a performance bond as is normally the case on such projects? What is puzzling is that the advance payment was made in 2018 and yet even as late as 2021, the PF government were still pushing for the disbursement of the loan. What safeguards did the Government put in place to ensure that funds would not be misappropriated given the uncertainties encountered with the loan disbursement? The Auditor General, the National Council for Construction and the Buildings Department under the Ministry of Infrastructure, should all take interest to ascertain the value of works done on the two sites in relation to the initial amounts paid.
Progress made on the sites
The progress on the two sites has consistently been reported as FTJ University in Mansa -as 10 percent and the FTJ University in Kasama at 5 percent. The detailed report 2018 Annual Progress Report for the Seventh National Development Plan 2017-2021 of the Ministry of National Development Planning, and the Ministry of Higher Education Annual 2018 -with Prof Luo as Minister, both recorded this progress on the two sites. The Report of the Committee on Government Assurances presented in 2021 to the Fifth Session of the Twelfth National Assembly highlights that the Executive, in its update to the Committee, indicated that the status quo at FTJ University had marginally improved with the Mansa Campus project at 10 per cent, while the Kasama Campus was at 5 per cent. It therefore comes as a surprise that Prof Luo claims there were buildings at the FTJ University -Mansa. Unless there is information to the contrary, what is apparent is that the only work done was in 2018 when the 15 percent was paid to the contractor.
On 9 June 2021 in the Daily Nation, the Permanent Secretary for Luapula Province at the time, Chrispin Mushota, was reported to have assured stakeholders that works on the FTJ University would resume as soon as the Ministry of Finance released the funds. The Permanent Secretary mentioned that Government had set aside some funds in the 2021 budget. He attributed the erratic fundings to the Covid-19 pandemic. A review of the 2021 Estimates of Revenue and Expenditure (Yellow Book), indeed confirms under Head 65 -Ministry of Higher Education that K496.8 million was earmarked for the construction of FTJ University and the completion of infrastructure that are at least 80 percent complete. Again, this point has to explained, did the Treasury allocate and disburse these funds?
The FTJ University project has a lot of unanswered questions and these need to be attended to diligently by those who had the reigns of power. We need to have accountability for whatever transpired on this project. We should not get caught up in the weeds of the political posturing and at times propaganda. The people deserve to know the truth. The UPND Government should allow the relevant investigative agencies to professionally do its work and assess if there was any wrongdoing and hopefully even the contractor will be talked to at the earliest opportunity. At the same time, the Minister of Infrastructure and the Minister of Finance should provide updates on the future of this project, is it still going ahead? Has the re-scoping been done and all impediments to the loan disbursements addressed?
Rueben L. Lifuka
Anti-Corruption Researcher /Governance Activist