What is in it for President Banda?

Something is not adding up in the way President Joyce Banda has been intervening in procurement processes in the public sector as well as getting embroidered in issues that should otherwise be dealt with by sector ministries, government departments and agencies.  

Last December, the President cancelled contracts that the Central Medical Stores Trust duly processed to buy cholera, malaria and diabetes drugs that were needed as an emergency.

The Office of the Director of Public Procurement had given a ‘No Objection’ after the trust clarified the procurement authority’s earlier concerns.

Defending the President’s interference in a highly technical process that went through all the required steps, the State House press office said at the time that the President has powers to directly intervene if things are not going well for the benefit of Malawians.

“The President noted some irregularities in how some contracts were done in favour of foreign suppliers and at the expense of local suppliers who could deliver the same products in the right amounts, quality and much faster as well as in a manner that gives value for money. The President has oversight responsibility to ensure good governance and accountability. She has powers to intervene where things are not going well for the benefit of all Malawians,” argued presidential press secretary Steven Nhlane.

This sounds reasonable at first glance, but when it later transpired that one of the suppliers she had reportedly preferred to get the deals and publicly praised it when she visited its premises had ended up being awarded the contract, some of us can be forgiven for wondering aloud whose interests the President intended to serve with her meddling.

Even the then Malawi Law Society (MLS) president John Gift-Mwakhwawa said at the time that what Banda did was overstretching her presidential powers.

“Procurement is not the domain of the President. There are procedures laid down and as long as those procedures have been followed, it is not the prerogative of the President to choose who should supply,” said Mwakhwawa.

Then in January this year, the President once again flexed her muscles on public procurement, this time forcing the Ministry of Tourism and Culture to cancel a deal with Peermont Hotels, which the procurement system approved as the preferred bidder to operate the multi-billion kwacha Umodzi Park in Lilongwe, which comprises Bingu wa Mutharika Conference Centre, the President Hotel and Presidential Village.

President Banda ordered the ministry to re-tender the job to a restricted few this time, amid reports that the First Citizen had a soft spot for a South African hotel chain, rejecting Peermont Hotels, also from the land of gold, which had come out favourite from the initial bid evaluation.

At this point, government had already opened negotiations with Peermont, but she ignored advice, apparently hoping that the restricted method would ensure that Legacy prevailed.

But it was not meant to be. Legacy failed to impress the bids evaluation committee that comprised technical people from various spheres of the industry both in and out of government.

Meanwhile, the Attorney General has warned that the cancellation of negotiations willy-nilly with Peermont was legal recklessness as the aggrieved company could sue for damages that the already overburdened taxpayer would have to shoulder.

That advice was ignored.

But as we speak, Peermont has given government seven days to explain its decision to stop negotiations with it or the two parties will face off in court.

Also discarded was the warning that the dilly-dallies on the hotel management contract could cost government more than K 1 billion in lost business and unproductive expenditure to keep the hotel in shape, according to a report by Umodzi Holdings Limited board of directors.

Desperate to have Legacy Hotels for some inexplicable reason, the President has reportedly ordered that Legacy—despite its failure during evaluation—be engaged on a single-source procurement deal. Now, single sourcing is only acceptable under the Public Procurement Act in the following major circumstances: if (a) an emergency is involved (b) the company being sought is the only one with the expertise and (c) if the firm was already cleared in a prior procurement deal and only needs to increase supplies.

Nothing in the push for Legacy falls under these conditions.

Whatever the case, the President’s meddling in technical matters that have legally constituted bodies mandated to manage the processes is proving costly to Malawians.

The question is: Why is the President getting neck-deep in operational matters when she has a whole host of strategic issues that need her leadership? What is in it for her for centralising procurement at Capital Hill?

Only time will tell.