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Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI

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Prospective government acts

TIZ urges probe on blacklisted company’s Itezhi-tezhi contract


The Post Newspapers Zambia

By Kabanda Chulu & Bright Mukwasa
March 20th, 2012
TIZ has challenged the government to establish how a French company blacklisted by the World Bank for corruption got a contract to supply equipment worth K135 billion for the Itezhi-tezhi power project.

The World Bank has blacklisted and fined two subsidiaries of Alstom SA, a French engineering company, after the companies allegedly offered a K781 million bribe to an entity controlled by a former senior government official (not named) for consultancy services for a World Bank-financed power-rehabilitation project in Zambia in 2002.

The Alstom subsidiaries, Alstom Hydro France and Alstom Network Schweiz AG in Switzerland, will pay K50.1 billion in restitution and be blocked from bidding on World Bank contracts for up to three years.

Commenting on the matter yesterday, Transparency International Zambia (TIZ) president Reuben Lifuka said it was shocking that in 2011, the MMD government went ahead and awarded Alstom a contract to provide turbines and generators worth K135 billion for the 120-megawatt Itezhi-tezhi hydroelectric project.

“We wonder what sort of due diligence was done given the many investigations that this company and its subsidiaries are facing in a number of jurisdictions. It is absolutely necessary that a procurement audit of this particularly contract is conducted by government, with the involvement of all necessary law enforcement agencies, especially the Anti Corruption Commission. It is our expectation that the Zambian government, through the Zambia Public Procurement Authority, will equally blacklist this company from participating in any future contracts,” Lifuka said.

“We further demand that the Zambian government through the Anti Corruption Commission should immediately commence investigation against the former senior government official who received the bribe that has landed Alstom in this situation of debarment. Clearly, the action of the World Bank is a good beginning but the Zambian authorities should play their role and bring this official to book.”

He advised government to seize all proceeds of crime from the official in question in order as a deterrent to all public officers engaged in public procurements.

“It is time that as a country we do everything possible to bring to an end these criminal acts of corruption. The PF government should pursue all those that were involved in this case and bring them to book, regardless of their standing in society,” Lifuka said.

“We also demand that the World Bank clearly stipulates how the K50.1 billion restitution fee will be administered specifically for the Zambian situation. It is our considered opinion that these funds should go towards compensating Zambia for the damage caused by this act of corruption by the two Alstom subsidiaries. It is evident that the bribery paid out is a cost that the Zambian government has had to pay in terms of the loans obtained for the Zambia Power Rehabilitation Project.”

He further challenged the European Investment Bank (EIB) and the African Development Bank to equally apply the debarment measures against Alstom.

“We are aware that under the Zambia Power Rehabilitation Project, Alstom subsidiaries were involved in different aspects of the rehabilitation contracts for Victoria Falls Power Station, Kariba North Bank Power Station and Kafue Gorge Hydro Power Station and government obtained credit for this project from various funding entities, including the World Bank,
EIB, AfDB and Development Bank of Southern Africa. So it makes sense that all these entities effect the blacklisting of the two Alstom subsidiaries for the same misconduct,” said Lifuka.

Uganda blocks Chinese loan over procurement concerns


Forum on China-Africa Cooperation
Image via Wikipedia

ComputerWorld Zambia

By Michael Malakata

August 4, 2011

As wariness about China’s investments in Africa grows, allegations of procurement flaws and overpricing has moved the Ugandan government to block a US$74 million loan from the Import and Export Bank of China (EXIM) meant for a digital migration project.

The loan process has been halted even though the Ugandan and Chinese governments had already signed a Memorandum of Understanding (MoU). Keith Muhakanizi, the deputy secretary to the Ugandan treasury, made the announcement last week and has thus far given no indication that the loan process would be restarted.

The move highlights growing controversy surrounding the awarding of ICT contracts to Chinese firms in the region. It comes less than two weeks after the Pan African Group of China controversially won a tender for Kenya‘s digital TV signal distribution operation. Opposition lawmakers accused the Kenyan government of flouting the tender process and knocking local companies out of the bidding.

Zambia is also in talks with the Chinese government to supply and install digital equipment at the national broadcaster, the Zambia National Broadcasting Corp. (ZNBC), without subjecting the tender to the bidding process as required by the country’s laws, according to opposition political parties.

As in many other countries in Africa, the Chinese government has been funding a number of ICT projects in Uganda through loans whose conditions are that supply and installation contracts are given to Chinese companies…The Ugandan government has been under pressure from opposition lawmakers who questioned the cost of the contract and the manner in which the contract was awarded.

Opposition leader Nandala Mafabi told journalists last week that the list of equipment in the tender was totally different from that of the contract. Nandala claimed the real value of the contract is between $20 million and $28 million and not the $74 million being claimed by Huawei TechnologiesRead more.

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