Taming corruption crocodiles through open contracting

By Matthias Makwacha

Three years ago, government was faulted for delayed completion of some projects. In a 12-page document, the opposition leaders outlined 20 projects that stagnated despite Parliament allocating funding year-in and year-out. Among other projects mentioned were the Liwonde-Nsanama Road which had stalled for 10 years, the Zomba-Jali-Phalombe-Chitakale Road, the Blantyre Police Station project and the idle Nsanje World Inland Port.

“Rampant corruption, theft and embezzlement of public funds and resources at the highest levels of government have destroyed the developmental impact of all these massive investments. It is a cost which is borne by the tax-payer,” reads the report in part.

In February 2018, Vice-President Saulos Chilima fumed at RBL Engineering, designers and supervisors of Tengani dyke, for the poor construction work. The 823m dyke, built under the World Bank’s Shire River Basin Management Project, was constructed to protect people of Tengani area in Nsanje district from floods.

Chilima described the dyke “a waste of resources” and demanded answers on why the contractor spent K290 million of government money on something which was not sustainable.

“The dyke is of substandard. Even though I am not an engineer, I am justified to call the construction work substandard,” said Chilima.

Last year, Lilongwe Water Board (LWB) was embroiled in a controversy over the award of a contract to Sawa Group Limited worth over K528 million. The public uproar came after the parastatal placed in the local newspapers a notice of the award of contract to Sawa Group to drill and test 20 exploratory boreholes under World Bank’s Lilongwe Water and Sanitation project.

It was at this stage the public knew that Sawa Group defeated over three Malawian-owned companies such as GIMM Water, FISD and Master Drillers. Sawa Group is said to be in a cartel of politically-connected people winning contracts through alleged corruption, but that is a story for another day.

It is estimated that at least 70 percent of the national budget is spent through procurement of goods, services and works. Government engages in projects that involve procurement. However, many projects funded by public money take place in the communities without people themselves being aware of the processes. 

Local councils, for instance, engage contractors to drill boreholes, construct school blocks and roads. They also buy goods and services using public money. There is a litany of substandard roads and bridges that got damaged soon after the contractor finished construction. Some school blocks collapsed because the contractor did a shoddy work. It could be the contractor used inadequate materials as per agreement or the selected contractor was under-qualified.

There are numerous cases where suppliers failed to supply agreed supplies because they connived with some officials. Recently, the law enforcing agencies were investigating companies that provide cement for the Decent and Affordable Housing Programme (DAHSP), popularly known as Cement and Malata subsidy programme, for ripping poor and vulnerable families, the beneficiaries of the programme.

The investigations came following reports that the companies were colluding with officials and suppliers that instead of giving beneficiaries 50kg bags of cement they were taking off 10kgs to make separate bags.

“This has been going on with the collusion of government officials and suppliers ripping off unsuspecting poor Malawians who are supposed to be beneficiaries of the programme by giving them underweight cement bags,” Nyasatimes quoted a source privy to the investigations.

The aim of DAHSP is to provide subsidized cement, iron-sheets and other related building materials for the low-income households to build and improve their own houses. And then some ‘crocodiles’ are colluding to defraud government?

Stitch in time

The Oxfam 2015 report indicates that there is increasing poverty and inequality among Malawians especially in rural areas due to inadequate public services resulting from corruption, embezzlement and wastage of public resources meant to provide public services. Procurement function, therefore, becomes very important to deliver goods and public services to the people.

According to Malawi Economic Justice Network (Mejn), 40 percent of the national budget is lost through corruption. Since a huge sum of public money is channelled towards procurement of goods, works and services, one would conclude that most of the corruption occurs in the public procurement system. There is need to effectively manage public procurement.

The many failed projects and substandard structures are a result of crocodiles of corruption in the public sector procurement system that continue to eat the big meat. No one gives checks and balances. To tame such corruption ‘crocodiles’ the introduction of open contracting in procurement processes comes into focus.

Open contracting is about publishing and using open, accessible and timely information on government contracting to engage citizens and businesses in identifying and fixing problems – from concessions of natural resources to procurement of goods, works and services for citizens. It ensures disclosure and engagement throughout the entire procurement process, including planning, tendering, awarding and implementation. The combination of these activities helps to save money, fight corruption and expand the number of participating businesses.

There are more than 17 million people out there and the money belongs to them. They have the right to know how their money is spent; and what difference it is going to make in their lives. Despite having the Public Procurement and Disposal of Public Assets Act 2017 that regulates all public procurement activities, many people are not aware of it.

Chief Development Officer at the Public Procurement and Disposal of Assets (PPDA), Peter Makanga, says the law is clear on how the public can be engaged and access information in all the stages of public procurement.

“The law is very clear and provides for areas where we can access information, say, when a public procurement and disposing agency prepares its budget it is supposed to come up with procurement plan which is supposed to be made public and you can seek that information from the entities,” said Makanga.

Social activist Dalitso Kubalasa said if procurement was done in compliance with the provisions of the Act, it would lead to great savings of public funds and increased confidence in public institutions.

“Public procurement is a tool for spurring economic development and at the centre of budget execution as most resources are spent through the activity. Procurement officers need to be fair, non-discriminatory and everyone should be treated equal.

“We need to move out from acquiring goods and services from friends and relatives and procure efficiently, effectively and economically using limited public money,” said Kubalasa.

Civil Society and government relationship

There is need for Civil Society and government to work together to achieve open contracting. Civil Society organizations can improve accountability through increased publication of procurement processes and public contracts and build capacity of local structures and communities to actively participate in tendering processes and monitor delivery of goods/services by contracted private suppliers.

They can also strengthen trust and transparency through enhanced competitive and fair bidding practices; lobby and advocate for regulatory reforms to allow for mandatory formal disclosures of both procurement processes and public contract information so as to pave the way for public scrutiny.