An Economist Digs Into Fire Tender Deal

 

By a Zambian economist

 

In January 2017, Lusaka Executive Mayor His Worship Wilson Kalumba and Inspector General of Police, Kakoma Kanganja visited the city of Albuquerque, New Mexico in the USA for consultations and future partnerships between Zambia and New Mexico under the Sister Cities Foundation.

 

One of the critical outcome to the visit was a donation made to the City of Lusaka-a fire truck worth $750,000.00.

 

The picture showed what appeared to be a refurbished and old truck.

 

But the tag of the pricey donation was almost a $1million apiece.

 

So we might have to agree that Fire Tenders or Fire Trucks and equipment they carry are not cheap!

 

A quick search reveals that the cheapest, bare entry truck appears to be worth $300,000.00

 

*WHY THE CRISIS OVER 42 FIRE TENDERS?*

 

“A case of lack of information or case of corruption?”

 

Critics have said the tender must be flawed because the price of $1m per Scania truck is too expensive?

 

Further that a local company with no known previous experience in the matter won this tender.

 

From this point alone, they state that the procurement process must be riddled with manipulation and corruption and the 42 trucks were highly over priced!

 

But a quick look at the 16 bidders showed that only Albion Export Services had previous experience in supplying fire tenders and their bid responding to the specifications included, was pegged at $49million for 42 fire trucks.

 

On 13th September 2017, Vice President Inonge Mutukwa Wina officiated at the handover of local authority’s brand new 42 fire tenders.

 

She unveiled the paraded trucks at a colourful ceremony held in the Lusaka show grounds.

 

Before long, the debate shifted to the price and procurement process of the fire trucks.

 

Some stated that; government needed to invest in fire hydrants and infrastructure first, before it could purchase high-end expensive pieces of equipment.

 

But few people knew that this procurement has been running since 2012!

 

Few people knew that five (5)Cabinet Ministers holding the portfolio of Local Government and Housing have seen this process (Prof. Nkandu Luo, Sylvia Masebo, Emmanuel Chenda, Stephen Kampyongo and Vincent Mwale and their Permanent Secretaries; Rev. Howard Sikwela, Dr. Chileshe Mulenga, Misheck Lungu and Amos Malupenga)

 

Few people were even aware that this procurement was scrutinised, disputed, appealed to; and taken to a London High Court for arbitration.

 

Again it is clear that few people were aware that the Zambia Public procurement Authority (ZPPA), the Anti-Corruption Commission (ACC) and the London Arbitration had processed and cleared the questions, complaints and dispute.

 

*The Story of Fire Tenders Begins*

 

In 2012, while officiating at the “Fire Day”, President Michael Sata directed that the provision of fire services should be decentralized.

 

Shortly after this directive a U.K. company, Albion Export Services submitted an unsolicited bid and later entered into a Memorandum of Understanding to supply fire trucks and safety equipment, and construct fire stations at a cost of $168million.

 

This MOU was revised several times to meet concerns around budget constraints and scope of the huge project.

 

In the 2015 revised MOU, Albion Export Services committed to supply 63 fire trucks for $66m(over $1m per truck in 2015).

 

But 22nd July 2015, the ZPPA rejected the direct solicitation or direct bid of Albion Export Services

 

ZPPA directed that the procurement be subjected to a competitive process.

 

Further the Attorney General also advised that the scale of the project required that it be subjected to a public tender while the Secretary-to-Treasury, Fredson Yamba proposed that the project be unbundled in two or three phases to ease pressure from the Treasury.

 

To this effect, the Ministry of Local government was funded $45m and K75m to;

 

1. buy 42 fire tenders and

 

2. contract construction companies to build the first fire stations in areas where they were unavailable.

 

It is this tender that ran in September 2015,the Ministry advertised for one month as required by law.

 

After evaluation of 16 bidders and a company called Grandview International won the bid committing to provide machines that would meet technical specifications and duration as provided for in the solicitation documents.

 

Albion Export Services whose bid was $49m for 42 fire trucks, Savenda Management Services and DL NAFFCO disputed the results and appealed to ZPPA.

 

ZPPA heard the appeals and dismissed their petitions for lack of merit.

 

Similarly the ACC was also made aware of the concerns of the bidders.

 

But both institutions cleared the process and the procurement procedure was okeyed.

 

*Was the Tender legal or irregular?*

 

From the debate, it is clear that people are asking moral not legal questions.

 

This matter has been dealt with by the ZPPA, the ACC and a London High Court Arbitration process!

 

Clearly the tender was above board, legal and clean.

 

Is it because a local company, a Zambian company, led by a youngman won the tender?

 

How come we do not query tenders worth millions or billions of United States Dollars given to foreigners?

 

Government spends upto $3billion in procuring goods and services and no question is raised (because the bulk of this procurement goes to Chinese, Indians, South Africans?).

 

In fact a Zambian entrepreneur stands a better chance to win local tenders if they have tagged a foreigner along!

 

The fire tender procurement has been put through appeals to the ZPPA, subjected to thorough criminal investigations by the Anti-Corruption Commission (ACC) and rigid court process under the London High Court Arbitration.

 

For those doubting the capacities of our institutions, earlier irregularities such as direct bidding by Albion Exports were rejected by Mumba Malila as Attorney General and the ZPPA.

 

The attempt to bundle the procurement as one lot was also rejected by by the Secretary to Treasury who advised that the procurement be unbundled to ease pressure from the Treasury!

 

But the debate appears to persist but hinged, not on legal or validity of the process, but on moral or the prudence of the expenditure!

 

Could Zambia afford so many Fire tenders purchased at the same time and priced $1m a piece?

 

Wasn’t there an opportunity to prescribe a cheaper version with low-level equipment than the high-end specs requested by experts at the Ministry of Local Government?

 

Citizens are also asking whether government should have first invested in fire stations, fire hydrants, fire proof building materials, anti-fire roof sprinkler systems and; compliance to fitting fire extinguishers in homes and public buildings.

 

Citizens are also calling for a tribunal or fresh investigations.

 

Clearly the gap in lack of information since 2012 on this matter is glaring and is making citizens ask questions that have already been answered.

 

*So what is the matter? What is the Conclusion.*

 

The procurement process was divorced from politicians(Cabinet Ministers and District Commissioners) to avoid known past abuses.

 

So the Cabinet handbook and the ZPA act forbid ministers from participating in any tender processes.

 

The Zambia Procurement Act which established the ZPPA was designed to promote transparency and integrity to the purchase of goods and services with public money.

 

It established a decentralized procurement to ministries and spending agencies; instead of a ministerial committee that used to sit once in a while and centralized corruption!

 

This was also done to increase financial absorption capacity of public money and projects as in the past, tender processes were tedious and let government money go back to Treasury year-in-year out and projects remained stagnant or undone.

 

However this was not meant to decentralize corruption as is now being suspected but was designed as a response to deliver projects on time and to cut tender processes to timely periods.

 

However provisions like direct bidding/single sourcing, were designed to attend to urgent, emergency, special or unique procurements but now appear to have been abused.

 

The concerns of every bidder is that they smell corruption and malpractices are rife by tender committees.

 

There is probably need to strengthen transparency mechanisms  to eliminate corruption and corrupt tendencies in the process.

2 Responses to "An Economist Digs Into Fire Tender Deal"

  1. Thabo Kawana   September 25, 2017 at 7:30 pm

    What about a simple tabulation of the cost of each truck, each specialized addition/modification, cost of transportation, customs, transit insurance, ka profit margin for the tenderer etc. per truck. And show us the “receipts” for each transaction. no essay type answers please, let the numbers speak for themselves.

  2. mwakale   September 29, 2017 at 11:09 am

    In the 2015 revised MOU, Albion Export Services committed to supply 63 fire trucks for $66m(over $1m per truck in 2015).

    How come the same price per fire truck quoted by Albion was quoted by Grand-view meaning that some one within the tender committee was giving inside information and that is where the smell of corruption is coming in. Inside trading is an offence and that disqualifies Grand View.