There was a hard-hitting interrogation when the Road Transport and Safety Agency (RTSA) appeared before the Parliamentary Public Accounts Committee (PAC) regarding the signing of a concession agreement between the agency and Intelligent Mobility Solutions (IMS), without approval from the Ministry of Finance.
Ironically, it was ex-RTSA chief executive officer Zindaba Soko who represented the agency, since the concession was signed during his time in office.
The interrogation, which started at 11:00 hours and ended at 19:40 hours, began with committee members expressing discomfort when Soko, who is now facing some money laundering charges in connection to the speed cameras before the Lusaka Magistrates’ Court, introduced himself as a Zambian citizen.
Feira PF member of parliament Kapembwa Simbao called the meeting to order by asking committee chairperson Howard Kunda to halt the proceeding until Soko introduced himself appropriately as the former RTSA CEO.
After Soko obliged, the committee discovered that RTSA only attached to its submissions copies of an unsolicited proposal of a contract with IMS without attaching copies of other bidders who participated in the process so that a comparison could be made.
Transport and Communications Permanent Secretary Eng Misheck Lungu, who led the ministry and RTSA officials, however, assured the committee that he would make proposals from other bidders available to the committee.
After PAC members insisted on the documents, Ministry of Transport and Communication director of Public-Private Partnership (PPP) Kita Shicholeka said they were already provided for in the PPP Act and were included in the appendixes.
Milenge PF member of parliament Mwansa Mbulakulima, however, tried to simplify the question for Shicholeka to make him understand what was required of him to provide.
“My understanding is that this offer was given to Lamise. Now, what about these other two, three or so companies that also made the submissions? Now, [according to you] Lamise came out top based on the Net Present Value (NPV) in return on investment and so on. On paper, it sounds very good. So now, we want to have hands-on the job. We want to see Lamise [on] column one, Mbulakulima column two, Kasonso column three, and Kasempa column four and see how they compared so that this committee will be able to zero in and say ‘indeed Lamise was the best.’ Is that what you are not understanding?” Mbulakulima asked.
Kunda then asked Shicholeka if he was still insisting that the requested for documents were already provided.
Eng Lungu answered on behalf of Shicholeka saying: “Honorable chair, no, I am not sticking to this.”
Eng Lungu then promised the committee that he would make the documents available and Kunda told him but the documents in question should be made available by Monday (today).
Tambatamba and Kunda then observed that a lot of pages were omitted from the evaluation report, wondering if it was one way of hiding some information from the committee.
In response, Eng Lungu blamed the omission on a digital glitch.
“I want to apologize for that omission. I think it is when you command the digital platforms to scan, it missed the even numbers. Chair, through your office, I can submit a complete separate copy of the evaluation report [because] it is available with me,” Eng Lungu responded.
Mbulakulima then asked the PS to explain why the ministry was silent and never acted when all such things were happening.
Before giving the PS chance to respond, Kunda added to the question: “And PS, as you respond to that, there is also another ministry which was also part of this before the signing takes place, and that is the Ministry of Finance. Why was it absent?
In response, Eng Lungu said the project to install speed cameras was initiated by RTSA.
“I think this project was initiated between RTSA and PPP unit. And if you [see] the way the interaction was until when they signed the contract, I chaired a meeting which culminated into addendum number one because when I saw the final document, I was alerted to say ‘no, hold on, we have 1, 2, 3, 4, or 5 items which need to be incorporated’. And that was when this project came to the ministry,” Eng Lungu said.
Kunda subsequently interrupted the PS’ response and insisted on knowing why the Ministry of Finance was never engaged before entering into an agreement with IMS.
“Yes PS, we hear you. But is that the procedure? Were the procedures followed? You are saying that the issue was between RTSA and Lamise. Is that the procedure of how these issues to do with the contracting, borrowing or whatever term that you can use? Is that the procedure that these institutions can follow without the ministry or the mother present?” Kunda asked.
Eng Lungu, in his response, said RTSA was mandated to conduct its own independent procurement and that as a matter of courtesy, the agency could notify the government.
“The procedure is that RTSA is a statutory institution and has a board, has a chief executive officer and they do their independent procurement. Under courtesy or in terms of notifying government, RTSA notifies the ministry on reporting of what they are doing and we can pick an item of where we are interested. We provide guidance in terms of policy to RTSA to implement…,” Eng Lungu said.
But Kunda interrupted the PS and asked him to explain what he meant by “just courtesy”.
“I am not comfortable with what you are saying PS. You are saying ‘just courtesy’ [meaning] that they can let you know or not let you know, depending on how they wake up or rather just forget about you. Is that the procedure PS?” Kunda wondered.
This question forced Eng Lungu to withdrew his statement and said, instead, that the correct procedure was that it was a requirement for the agency to report to the ministry.
“That’s not the procedure. The procedure is to let me know. I am withdrawing the statement of ‘courtesy’. The ministry’s involvement was when RTSA finalized with the regulatory institution of concerning PPP projects came to present the project to us and we took interest as a ministry to look through the document and hence we caused Addendum number one. So, from that angle, it was a mandate of the CEO to report to the ministry that ‘we intend to get into this [in order] to solve the problem that you have seen in the transport sector, we found a solution and this is the solution.’ At that point of the solution, we say let’s look at your solution and when we look at it, we say ‘add this and that to add value to the document, we support the solution,” he said.
“In terms of the procurement procedures, RTSA followed the procedure [but] in terms of reporting, RTSA missed the procedure.”
At this point, Soko was itching to chip in to add his point but the chair asked him to hold his breath as his time was coming.
But Eng Lungu noticed Soko’s agitation and requested that he be given an opportunity to relieve his itch.
“Chair, I can see the former chief executive officer itching to say something. I want to give him chance. I mean, he is responsible for [what happened],” Eng Lungu observed.
Once allowed to speak, Soko said all the stakeholder ministries were present during the pre-negotiating stages.
“This particular process and procedure of this contract was followed step by step and procedure according to the various relevant legislations. This unsolicited proposal was advertised, evaluated, what happened next was that there was that preferred bidder status that was issued from the PPP unit. So, when that was done, the negotiating team from the start of the first negotiating meeting, Ministry of Finance was part of the team, Ministry of Housing and Infrastructure was part of the team, Ministry of Transport and Communications was part of the team, National Road Fund Agency (NRFA), Road Development Agency (RDA) were all part of the negotiating team. So, whatever took place, there was representation of the stakeholder ministries,” Soko said.
He also blamed the Attorney General’s office for causing all the confusion on the concession agreement deal, charging that it gave two different opinions on one matter.
Soko also said the Ministry of Finance should have guided the agency, especially concerning matters of the Public Finance Management Act.
“Suffice to say also honorable members that this particular concession went through the normal processes of approval and it was signed in 2017. Upon clearance by Attorney General’s Chambers, another opinion arose one year after signing those concessions from the same Ministry of Justice. And this is what has caused all these problems. We had two different opinions from the same ministry. Before we signed the concession, we feel by then as I was CEO, we followed the correct procedure because we followed the law and that’s how we executed this contract. I don’t see any discrepancy on what we failed to follow as RTSA when I left that agency. Yes chair, we signed without the Ministry of Finance guiding because we were guided by the PPP Act. So now, with the Public Finance Management Act, I think these are matters that when Ministry of Finance sat on those Committees, they should have ably guided for us not to have such a situation,” Soko said.
But when asked for his opinion, the Ministry of Finance accountant general disagreed with Soko’s accusation that the ministry did not provide guidance.
“Chair, I don’t think it’s correct to say that we did not guide. We are always open to all the line ministries and we are open to the extent that from time to time, we engage them through workshops and trainings, especially on issues of financial regulations. Even when they understand them, we still take them for such trainings. So I don’t think it’s correct that we didn’t guide them. If they didn’t ask, probably that’s why they were not guided but if they asked, we would have actually guided,” the Accountant General said.
Simbao then sought to know which law was superior between the PPP Act, which RTSA followed, and the Public Finance Management Act.
Eng Lungu responded, saying the Public Finance Management Act was superior.
“Chair, I think Acts are Acts and Acts guide our behavior in terms of administration. In terms of prudence, the Public Finance [Management] Act supersedes any other Act in terms of supervision. In terms of the ZPA Act, the ZPPA Act supersedes other Acts. So the Public Finance here takes precedence,” Eng Lungu.
After the PS failed to provide other documents with regards to correspondence between the concessionaire and RTSA on the preliminary awarding of the contract to IMS, Mbulakulima suggested that the committee resumes sitting when the requested documents were presented.
“I see ourselves sitting three or four times here. It’s not a child’s play. We are here to tackle the issue because in my mind, the Solicitor General and the Attorney General have to appear because asking them who made a better recommendation? [These] will not answer. And all this information should have been provided here which they could have come with and it’s a serious matter. When are we going to finish this project?” Mbulakulima asked.
But Kunda insisted on wanting to know if the concession agreement had blessings from the Secretary to the Cabinet as required by law.
“It is the Secretary to the Treasury that gives authority. Was it granted that you can now append this signature?” Kunda asked.
Shicholeka then said authority was not granted.
“The written authority from the Secretary to the Cabinet was not granted on that particular aspect,” Shicholeka responded.
Chavuma UPND member of parliament Victor Lumayi also noticed some inconsistency on the type of the contract as well as the authority under which it was signed.
“I wanted the controlling officer to come out strong on whether the PPP Act which states that a contract which is under seal can only be signed by the chairperson of the board and the one which is not under seal can be signed by the CEO. Now here, this concession was under seal and if you go to appendix eight, you find that this concession which was under seal was signed by your CEO. So, I want you to come out clear whether this was the right thing,” Lumayi said.
“And chair, in the same vein, for the sake of progress, I want to find out from the concessionaire. There are two issues which have come on this report, one issue was to do with capital items amounting to US $9,487 million of which the invoices were not submitted to the agency, and also money being deposited in personal accounts and not government accounts. I want to understand if you had any problems with the agency for these invoices not availed to RTSA and the reason why government money was put in individual accounts?”
In responding to the issue regarding the seal, RTSA legal counsel fumbled to explain the difference between “under seal” and “not under seal”.
“The interpretation was that this document we had (original concession agreement) was not required to be under seal. Yes, the document reads ‘signed, sealed and delivered.’ If it was supposed to be under seal, it should have read as ‘the common seal of the agency is affixed.’ Then there you have to affix the seal. I don’t think I am in a position for now to explain it. I will need to make it up. It doesn’t have a seal honorable chairperson. It is not sealed,” the legal counsel responded.
And when addressing the question to do with undelivered invoices, IMS managing director Davis Reynolds said the invoices had not been raised by the manufacturer and supplier.
“The honorable member asked if the absence of invoices supporting the US $9.8 million asset value and investment was in any way due to perhaps issues and problems we had with the agency. In August, the senior management team of the agency visited to physically verify the presence of those assets which was done. At that point, it was explained to them that the invoices were not available because they had not been raised by the manufacturer and supplier. Indeed, those invoices are work in progress and even the value of those invoices is still subject by category of assets to the negotiations going on through the addendum,” Reynolds said.
And Eng Lungu chipped in, saying the ministry had suggested other remedies to compel IMS to provide the documents.
“When IMS failed to produce these documents through the chief executive officer, I guided your committee that in the event that David is not able to submit this information, there is a procedure in the agreement with him that we can cause for steps to remedy the misunderstanding. There is a procedure in here by letter that we have requested for information and he is not proving. On several occasions, he hasn’t provided it. And it is only prudent that we can guide the committee that the procedure is provided if the party is not providing the information and cause a dispute,” Eng Lungu said.
The issue dragged on for a while, with RTSA and IMS lumping blame on each other.The committee noted that there was still conflict between the involved parties.
Meanwhile, on the issue to do with monies being deposited into individual accounts, RTSA director for finance Progress Siwana said the online account was opened by the concessionaire but that the agency immediately suspended the online payment platform upon realizing that the monies were being deposited into illegal accounts.
Siwana added that all the monies that were paid through the online platform were remitted to a Zanaco account which was opened by the Ministry of Finance but admitted that the concessionaire did not follow the correct procedure when authorizing the online payment platform.
And in winding up the discussions, Kunda said the committee would not tolerate any such illegalities going forward.
“We can continue with this subject until tomorrow but I am sure you have learnt from this. First of all, the issues to do with procurement of these contracts, our analysis are that sometimes the law is put aside. We need to follow every law that connects to these issues. We need to be serious. We cannot be spending time talking about these issues that are guided in the way we deal with them. We are very expectant and we will be here because we have been given the mandate for five years. We don’t want a repeat of these things. And it should not take the Auditor General to come and find out. It should take yourself as a controlling officer, you are the one who is in charge of all these sub-warrant orders. If they are not doing their work, show them the door because we have a lot of people who are looking at how their money is being managed, and if they are failing to do their work, they are not supposed to be there. It’s that simple,” said Kunda.