TRANSPARENCY International Zambia (TIZ) says it is not proper for President Edgar Lungu to continue ignoring the cruel loss of public resources through the dubious award of contracts to individuals and companies that are not qualified to provide services.
And TIZ says it is unfortunate that the ministry, which is at the centre of the COVID-19 response and general healthcare services to the Zambian people, has now become the hub of unsavoury activities insofar as procurement of goods and services is concerned.
Meanwhile, TIZ says the Zambia Public Procurement Authority (ZPPA) must takeover all procurement activities at the Ministry of Health until sanity is restored.
A News Diggers investigation has revealed that the Ministry of Health paid a Chinese company called Ganzhou Etone amounts exceeding US$1.5 million (approximately K31.3 million) for supply of Coronavirus test kits under a tender that was awarded to a different firm called Kingphar Company Ltd.
The investigation has also revealed that companies that ‘competed’ and were awarded Covid-19 supply contracts at the Ministry of Health were owned by PF cadres, relatives and friends of those that are linked to the ruling party, while some companies which won contracts were registered a months before the tender was floated.
According to the Public Procurement Act No. 12 of 2008 schemes between two or more bidders, with or without the knowledge of the procuring entity, designed to set bid prices at artificial, non-competitive levels is a prohibited collusive act and a crime, as is the fraudulent practice of “misrepresentation facts in order to influence the procurement process or the execution of the contract.”
Commenting on the revelation, outgoing TIZ president Rueben Lifuka said it beats logic that a Ministry can award a contract to a company only incorporated a few months ago with no real experience in meeting the procurement requirements.
“It is not proper that President Lungu as the appointing authority of both the Minister and the Permanent Secretaries who should provide leadership in cleaning up this flawed procurement system, continues to ignore this wanton loss of public resources through the dubious award of contracts to individuals and companies that are not qualified to provide these services. It beats logic that a Ministry can award a contract to a company only incorporated a few months ago with no real experience in meeting the procurement requirements. We find it hard to believe any reasonable argument exists to justify what is apparently collusive if not fraudulent practices by the companies that have been cited in the expose by News Diggers. While we would like to see and we should celebrate as many Zambians participating in this line of business, we will not condone those who want to use underhand methods to access public contracts,” Lifuka said.
“There are a number of suitably qualified Zambian companies capable of delivering on these public contracts, who are denied the opportunity simply because they are not cadres and know no one in the corridors of power. It is not correct to assume these are the best that the Zambian business community has to offer as suppliers of the different items even under this emergency procurement environment. Political patronage, nepotism, state capture and conflict of interest are all forms of corruption which rob this country from achieving value for money for all these public contracts awarded,”
He said it was shocking that leaders were not moved by the illegality and wondered if this was because the beneficiaries were relatives, friends and party sympathisers.
“For far too long, this PF government has waxed lyrical about fighting corruption, but it continues to fall short on its actions. Therefore, despite this damning expose, we will most likely see no action taken against anyone. As a country, we seem to be permanently welded to mediocrity and illegality particularly in the area of public procurement. It seems those who want to follow the rule book do so at their own great disadvantage but this should not be the case. We have normalised corruption and wrong doing in this country to a point where the corrupt fear nothing, not even the long arm of the law. The corrupt conduct their activities in the full glare of the law and they know fully well that they are untouchable because of the political backing they receive. In certain instances, we blame the Zambia Police, ACC or DEC for not doing their work but our anger should also be directed at those in elected office who facilitate this illegality – whether directly or indirectly,” he said.
“It is shocking that our leaders are not moved by this illegality as long as the beneficiaries are their relatives, friends and party sympathisers. It does not take special imagination to know what the reaction of the government would be if the companies involved in such collusive and fraudulent conduct were owned by members of the opposition political parties. These would swiftly be arrested and street demonstrations instigated to besmirch their character. Indeed, the words of the former Peruvian field marshal and President – Oscar Raymundo Benavides, are kept alive come in Zambia – “For my friends everything, for my enemies the law.””
Lifuka said TIZ was concerned with the unrepentant attitude of the senior leadership in the Ministry of Health.
“It is now a matter of great concern that the Ministry of Health continues to be in the headlines for what is evidently poor public procurement processes. Last week, the Auditor General in his Interim report on the COVID 19 response, cited the Ministry of Health for breaches of the public procurement law and procedures and this expose by News Diggers, validate the findings of the Auditor General. It is unfortunate that the Ministry, which is at the center of the COVID 19 response and generally healthcare services to the Zambian people, has now become the center of all manner of unsavory activities insofar as procurement of goods and services is concerned. We are worried by the unrepentant attitude of the senior leadership in the Ministry because these complaints have become commonplace and there is no evidence to suggest a reform is underway. This now is a case of impunity where the Ministry of Health officials clearly do not see anything wrong to handle procurement of goods and services based on political patronage and without due regard to basic rules of probity and integrity,” Lifuka said.
He proposed that the Zambia Public Procurement Authority (ZPPA) directly handles all procurements for the Ministry until such a time that corrective measures have been put in place at the ministry
“The continued poor handling of public procurement at the Ministry of Health has been going on for some time now and previously, donors went to the extent of suspending their support to the health sector. It is time that all authorities took interest and took decisive actions. Specifically, we want to call upon the newly appointed Director General at the Zambia Public Procurement Authority – Mrs Idah Chella, to bring sanity in some of the Procuring Entities like the Ministry of Health,” he said.
“If it is possible, this delegated authority should be revoked as this Ministry lacks the capacity to fulfil the requirements of the Zambia Public Procurement Act. We call upon ZPPA, to investigate these reported breaches at the Ministry of Health and we would like to see measures taken against all erring officers. In the meantime, we propose that ZPPA directly handles all procurements for MoH until such a time that corrective measures have been put in place at the ministry. The Procurement Committee under the Controlling Officer for MoH as well as the procurement unit have failed in their duties and we should no longer pretend that all is well,”
Lifuka called on investigating wings to take keen interest in the fraudulent activities.
“We further call on ZPPA, Zambia Police and Anti Corruption Commission to take keen interest in the fraudulent activities of all companies cited in the expose and in line with the provision of the law, ZPPA should consider permanently barring or blacklisting these companies from participating in any future public procurement. This impunity will only stop when ZPPA takes decisive steps to clean up this mess. Any company that uses fraud, corruption, price fixing, collusion or any such malpractices, does not deserve to participate in public procurement. We cannot have public procurement being reduced to a conduit for appeasement or reward political cadres or political benefactors,” said Lifuka.
“Recently, we read of a senior party official encouraging his members to form companies so that they could benefit from public contracts. Is it surprising therefore that the 2019 Auditor General’s report points to a growing figure of undelivered materials or lack of specific performance on public contracts? Government cannot talk about fighting corruption when the public procurement arena is riddled with such illegal conduct.”