Posted on December 19, 2017
By Chila Namaiko, Times of Zambia
A company cited in the latest Auditor-General’s Report for failure to deliver on a multi-million dollar contract to supply dredging equipment, faces having to pay back to Government more than $6million within 90 days.
Transport and Communications Permanent Secretary Misheck Lungu told the Parliamentary Accounts Committee (PAC) on Friday that the ministry had written to Solicitor General Abraham Mwansa to compel MCD Civil and Mechanical Engineering Limited to pay the Government more than US$6 million within three months for failure to deliver dredging machines.
Appearing before PAC for the second time to respond to queries raised in the latest Auditor General’s Report yesterday, Mr Lungu said the Solicitor General would recover $1,875,800 as performance guarantee for failure to perform as agreed in the contract.
Mr Lungu informed the committee chaired by Howard Kunda said that MDC Civil and Mechanical Limited would also be asked to return the $5,541,707 it was keeping for failure to deliver the equipment.
The Committee heard that the original end-date of the contract was October 14 2016, given that MDC was paid 72 per cent of the contract sum.
“The contract delivery was extended to May 31, 2017 to allow the supplier to deliver the dredgers in full,” Mr Lungu said.
PAC heard that after some reminders, the ministry decided to ultimately write a letter to the contractor on October 13 this year for non-renewal of the contract. Mr Lungu said a letter had also been written to Ministry of Justice requesting it to recover the money for non-renewal of the contract. He told PAC that Mr Mwansa had also agreed to follow up the matter in order to recover the money.
The committee was informed that the matter had also been reported to the Zambia Police as well as the Drug-Enforcement Commission (DEC) which had already been in contact with his ministry and would issue a comprehensive report after concluding its investigations.
Mr Lungu said he had been informed that on its part, MDC had taken legal action against Big Machineries of Netherlands, the company engaged to manufacture the equipment for breach of contract.
The Government paid $9,240,370 to the company in 2015 for the supply of six cutter-dredging machines and six excavators towards a total contract price of $11,875,800 with a delivery period of eight months.
The latest Auditor General’s Report has revealed that as of July last year, MDC had not delivered a single dredging machine.
It says the Copperbelt-based company had only supplied three amphibious excavators valued at $2,968,950, leaving a balance of three amphibious excavators and six cutter-suction dredgers worth $6,271,420 .
“It could not be ascertained as to when the three undelivered excavators and six cutter-dredgers would be delivered and no security guarantee was availed for the balance of $6,271,420 being held by the supplier,” the report reads in part.
In a follow-up question, Lukashya independent Member of Parliament Mwenya Munkonge wondered whether the supplier had paid the manufacturer. In response, MCD Civil and Mechanical Engineering executive director Davies Mwenya told the committee that he paid the manufacturer up to 60 per cent of the agreed contract sum. Mr Mwenya explained his company had been having some misunderstandings with the Big Machineries over certain specifications relating to the ordered equipment.
Source: Times of Zambia
