MRA spends K7 billion on China’s ‘free’ scanners

There are questions on how government, through the Malawi Revenue Authority (MRA), may have spent billions of kwacha on cargo scanners that the late president Bingu wa Mutharika announced as gifts from China.

According to an approved budget for the scanners that Weekend Nation has seen, the scanners project was planned to cost around K7 billion (about $28 million).

Of this budget, MRA was supposed to raise K1 billion (about $4 million) while around K6 billion (about $24 million) was planned to come from government.

But a progress report of MRA projects covering the period between July 2011 and February 2012 shows that at the end of the reporting period, almost 90 percent of the total estimated cost of the project (K7 billion), was used up.

“Two scanners are already in the country and two drivers are undergoing training. Three government officers are also undergoing training. Technical training for customs officials is already scheduled.

“Almost 90 percent of the total estimated cost of the project is used up. The project may need additional resources considering the insurance premium of K55 million [about $220 000] to be paid and the training of customs officials,” reads the progress report in part.

A senior MRA official confided that although the scanners were initially budgeted at K7 billion in the authority’s 2011/12 projects/development budget, government has spent around K17 billion (about $68 million) on the equipment to date.

We could not establish what caused the budget to shoot and what all that money was spent on given that the equipment was a donation.

Finance Minister Dr. Ken Lipenga, in his 2011/12 revised budget statement in January, alluded to the donation of the mobile scanners which would be installed at major border posts nationwide.

“Mr. Speaker, Sir, three scanners kindly donated to Malawi Government by the People’s Republic of China, have already arrived in the country and are expected to be operational by March 2012,” said Lipenga.

When Weekend Nation shared its findings with the minister on the scanners, Lipenga said in an interview on Tuesday that “to the best of my knowledge, the scanners were a grant from China.”

He explained that the scanners were processed through the Chinese Embassy and that former Secretary to the Treasury Joseph Mwanamvekha and recently fired MRA commissioner general Lloyd Muhara travelled to China to facilitate the process of bringing the equipment to Malawi.

New MRA commissioner general John Biziwick said when contacted on Monday: “As you know, I am still new. I do not know anything.”

Muhara and Mwanamvekha could not be reached for comment. MRA board chairperson Thom Mpinganjira said on Monday that he was out of the country and could not, therefore, talk about the issue.

Former MRA board chairperson associate professor Charles Mataya on Thursday said the scanners were a donation to MRA from China.

Asked how the authority could then blow a budget of about K7 billion on the same if they were a donation, Mataya referred Weekend Nation to Muhara.

“The scanners were donated by China. The expenditure could be on the transportation of the equipment from the shores in Dar es Salaam, Tanzania. But ask the former commissioner general on that one.”

Chinese Embassy press officer Wang Juncheo on Thursday also said their government donated the two scanners to Malawi, adding the Chinese government will also soon donate three more scanners to MRA.

According to progress report, the scanners’ project’s main objective is to facilitate trade and ensure that the right amounts of duties are paid on a consignment.

It says the use of scanners at the customs border will also deter the smuggling of dangerous and harmful items, thereby protecting Malawians from such weapons.

The MRA source also complained that despite the billions spent on the project, the authority never carried out a cost-benefit analysis to appreciate the feasibility of such an investment.

The report also has updates on other MRA projects such as data processing centre (DPC), valuation database upgrade, motor vehicle importation system and remote direct trader input.

Other projects contained in the progress report included network resource sharing, information, communication and technology (ICT) security; help desk management system, IT literacy enhancement, maintenance of buildings, electronics records management system and archiving, integrated tax administration system and electronic tax register, among other projects in the 2011/12 national budget.