MINISTRY of Health permanent secretary in charge of administration Dr George Magwende says government has so far saved about K103 million after renegotiating contracts for the supply of essential commodities.

In an interview, Dr Magwende said the Ministry was renegotiating all signed contracts and had so far managed to renegotiate one contract and was almost concluding on three others.

“The Ministry of Health is renegotiating all the signed contracts. These contracts are signed by human beings so there is nothing that is impossible. So we have been engaging these colleagues of ours and I must say they have been magnanimous. We have sat and dialogued and we are making significant progress. Just end of last week, we did manage one contract and we negotiated and we saved this country over $5 million. Today we are almost concluding on the other three. Once we are done with these contracts, you will find that this country will save a significant amount of money. Over $5 million dollars is equal to about K100 million which is a lot and can be used to buy other commodities,” he said.

“So you can only speculate where that money could have gone to. One of our argument points is that this contract has got no other hidden ramifications. You will not have to pay any Minister, Permanent Secretary or Director. What you sell is what you get paid for. I did not give them any offer. All I told them is that we have no other hidden financial agendas. So the initial contract sum was at a cost of $76,844,503.80 but they have brought it to $71,427,809.40 and we have saved $5,416,694.40. Actually, at first, I thought they were talking about K5 million but then they told me Dollars and I was like what! Then I said my goodness.”

Dr Magwende said government was also looking at modalities of how to dismantle debt owed to drug suppliers while it handled the current situation with cash payments.

“Once we get these commodities we will not make them wait for one year before they are paid. We will not take six months before they are paid. The advice has been that almost on a monthly basis, we will receive money for procurement. So we are not adding on to the debt that we found. We are actually looking at modalities of how to dismantle the debt while we handle the current situation with cash payments. We want to be open to our colleagues and we want them to predict how they will be paid. One of the pharmaceutical suppliers was even saying ‘you should even remove the 25% advance payment from your contracts’. I agreed with him because if we are not going to pay that, why should it be there?” he questioned.

Dr Magwende said he was prepared to renegotiate all contracts for as long as government was paying out money.

“So it will take a little bit of time and we need to be consistent in doing things right. It will take each and every Zambian to play a part. We cannot change things alone. We need to make these offices as open as possible because others used to pay to just see the Permanent Secretary. So that used to happen and we need to change that. Additionally, ZPPA has given a price index. For example, if you are buying a laptop, it is giving a range within which everyone providing that should fall. It never used to be there,” he said.

“To be honest with you, I am prepared to negotiate on all contracts. For as long as this government is paying out money, I will interface and speak. Even if it means saving one cent for this country, I will do it. Of course, we will have to be reasonable because there are those that are just on borderline and understand if we prove that the price is cost-effective. If they refuse and we are the ones paying, we look for somebody else. It is simple as that. These are contracts for instance to say I will be buying from you for one year, I will just wait for December to come and it expires meanwhile, I am getting from somebody else. It is because you are not encouraging me to come to you.”

Dr Magwende said on average, in one budget year, Zambia could have been losing close to a billion Dollars which would just go to individuals.

“There are a lot of players on the market. What affects the supply chain is when you do not prepare well. Most of these contracts were prepared by Ministry of Health. So now they had to be moved to ZAMMSA. All we are saying with ZAMMSA is we work together and let us renegotiate. And because I trust my negotiating skills, I would want to have a hand in these negotiations. It is actually unbelievable and when you write that in your papers, people may think it is just stories,” said Dr Magwende.

“So all this has given me a drive to renegotiate most of these guys. Just on a small order of about K30 million, we have negotiated and they have given us about K3 million off. So you can imagine how that K3 million could have just gone to an individual. It was a circus and you can imagine in all Ministries it was like that. So on average in one budget year, Zambia could have been losing even a billion Dollars just going to individuals.”