Government has directed the Roads Authority (RA) board to commence disciplinary action against its Chief Executive Officer Trevor Hiwa because he has a case to answer for awarding to his own firm Infracon Limited a K217 million World Bank funded project contract
Secretary to Treasury Ronald Mangani, in his memo to RA board chairperson dated July 14 2016 with reference number ST/2/219, has told the board while it is investigating the matter, it should also consider the position of Treasury on the issue.
Mangani has urged the board to expedite the investigation.
In the letter headlined ‘Award of Contract to Infracon Limited’ Mangani faults Hiwa for awarding the contract to his own firm using a single source procurement method arguing he and his wife have interests in the company since they have shares.
Writes Mangani: “I refer to the article which appeared in the Malawi News newspaper of 4-5 June 2016 on the above subject. I write to inform you that the Treasury has reviewed the matter after consultations with the appropriate authorities and has established that Mr Trevor Hiwa Chief Executive Officer of the Roads Authority has a case to answer in the award of a contract to Infracon Limited by the Roads Authority.”
Mangani says Treasury’s investigations have established that Hiwa was in conflict of interest.
“In particular the Treasury has established that Mr Hiwa holds a significant ownership interest in Infracon Limited both in his personal capacity (1%) and through his joint ownership (with his wife) at Madada Trust (99%).
“The fact that the Roads Authority proposed a single source procurement method in favour of a company in which Mr Hiwa has such an interest grossly compromised the credibility of the entire procurement process. It is the Treasury’s view that at least in part Sections 18 and 19 of the Public Procurement Act 2003 were worrisomely violated in the handling of the procurement in question,” reads Mangani’s letter.
Mangani minces no words but calls on the RA board to take disciplinary action against Hiwa.
“Accordingly, I am obligated to request the Roads Authority Board to commence disciplinary action against Mr. Hiwa in keeping with the provisions of Section 18 (b) of the Public Procurement Act 2003.”
In conclusion, Mangani writes: “Recognising that the board has already set up an independent committee to investigate the matter, I trust that the Treasury position communicated herein will inform and expedite the board’s action.”
The letter is addressed to RA board chairperson and is copied to Chief Secretary to the Government, Attorney General, Secretary for Transport and Public Works, Comptroller of Statutory Corporations and Minister of Finance, Economic Planning and Development.
In an interview, RA board chairperson Jackson Gomani said the board had planned to meet on Friday (yesterday) the team of the investigators they instituted to give them terms of reference.
When Malawi News first broke the story, deputy director of Public Procurement Edward Jeke described the contract award as conflict of interest and asked the Anti Corruption Bureau to come in and do their work.
ACB said they were investigating the matter.
World Bank had contract No. RA/CON/2015-16/09 for the Design and Construction Supervision Services of Various Roads in Central Region and
Southern Regions for US$303 823 following the floods that devastated the country in 2015. This was called the Malawi Flood Emergency Recovery Project (MFERP).
And Hiwa wrote the World Bank seeking permission to use single sourcing method and further justifying the selection of Infracon Limited, his own firm.
Among the justifications for Infracon Limited, Hiwa wrote the bank saying:
The choice of Infracon is based on the fact that their work load is currently lighter as compared with other consultants present in Malawi. It is therefore our belief that they will provide a better and dedicated service to the Malawi Flood Emergency Recovery Project (MFERP).”
And on December 18 2015, Hiwa wrote Infracon Limited giving them notice of acceptance.
“This is to notify you that your proposal dated 27th October, 2015 for execution of the Design and Supervision Services of Various Road Construction Works in the Central and Southern Regions of Malawi, Contract
No. RA/CON/2015-16/09 for the Contract Price of US$303 823 (Three Hundred
Three Thousand Eight Hundred and Twenty Three United States Dollars), as corrected and adjusted in accordance with the Instructions to Bidders is hereby accepted.
“You are hereby instructed to proceed with the execution of the said services in accordance with the Contract documents. Let me congratulate you on your success in this tender and wish you a successful execution of the contract.”
When asked to explain conflict of interest in the contract, RA spokesperson Portia Kajanga said the Internal Procurement Committee met over the selection of the company.
She said minutes were available but she did not produce them. She said the project was an emergency, hence RA’s request for single sourcing procurement method.
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