Electricity Supply Corporation of Malawi (ESCOM) awarded contracts for K3 billion worth of bulbs to two companies based in Dubai and Mauritius, and this had led to questions over the ownership of the companies.
The local media reported on Saturday that ESCOM awarded contracts to Lilypeck General Trading LLC and Teligenta Limited companies based in Dubai and Mauritius respectively.
There are claims on social media linking Lilypeck General Trading LLC to former First Lady Getrude Mutharika and Teligenta Limited to former President Peter Mutharika.
Malawi24 could not independently verify these claims.
According to the local media report, Teligenta will supply 290,000 bulbs costing USD2,985,000 (about K2.1 billion) while Lilypeck will supply 125,000 bulbs costing US$1,400,000 (about K1 billion).
On June 12, Escom’s Acting Director of Finance Brian Ndisale and Allexon Chiwaya, Chief Executive Officer, advised FDH Bank to arrange to establish an irrevocable Letter of Credit in order to pay 75 percent of each of the contracts awarded to the two companies
“Could you please arrange to establish an irrevocable Letter of Credit with cash cover for USD1,050,000.00 (One Million and Fifty Thousand United States Dollars) in favour of Lilypeck General Trading LLC, being 75% of the contract sum of USD1,400,000.00 for the supply of Led Tubes through our Account Number 1850000006243,” reads a letter signed by Chiwaya and Ndisale.
ESCOM Public Relations Manager Innocent Chitosi told local newspaper Malawi News that the company aimed to replace fluorescent bulbs with the LED with the aim of reducing energy consumption.
“Escom conducted an energy efficient lighting survey in 2016 and it revealed that around 80% of all industrial, commercial and public institution customers in Malawi use incandescent fluorescent tubes for lighting,” he said.
Malawians on social media have since asked the government to investigate the award of the contracts.
One social media user said the use of companies in offshore jurisdictions is usually done with the purpose of looting.
“Any invoice from a company incorporated off shore should clearly raise red flags at first glance. The problem is that most people responsible for processing payments deliberately shut their eyes to such manifest thievery,” he said.
The revelations about the ESCOM contract come days after President Lazarus Chakwera’s administration temporarily suspended all Government contracts in order to carry out a quick audit of the contracts.