The office of the Ombudsman has disclosed that it has instituted an investigation into the dubious K128 billion fuel procurement deal between the National Oil Company of Malawi (NOCMA) and QLV Digitalfx (Malawi Limited).
This comes in the wake of a complaint filed to the public protector’s office by the Anti-Corruption watchdog and the Youth and Society (YAS), halting the deal and calling for an investigation into the matter.
Reports indicate that QLV Digitalfx Malawi is due to receive a contract sum on behalf of a purported company representing the interests of the royal family of the United Arab Emirates (UAE).
The deal has raised eyebrows for several reasons including the fact that the contract will be paid in advance before any supplies are made to the government of Malawi which implies that the contract is likely to be financed by Malawian taxpayers; the contract sum will be paid to a Malawian account in local currency when fuel is imported from outside the company claims to be UAE based and the amount of lawbreaking that has come with the deal.
On the law-breaking front, the contractor for procurement of 250,000 metric tons of fuel, which consists of 125,000 metric tons of diesel and 125,000 metric tons of gasoline, was granted without any open tender as required by the law.
In its letter to the office of the Ombudsman, YAS executive director Charles Kajoloweka stated that the contract award process flouted the Public Procurement Act—which requires that public entities should use a competitive bidding process for contracts of this nature.
Section 31 of the Public Procurement Act mandates that contracts above K10 billion must be awarded through international competitive bidding (ICB).
“The contract is reportedly valued at US$74 million (equivalent to K128 billion) with provisions for the supplies to be paid 50% of the contract sum upfront through the local forex bureau.
“However, several irregularities have been noted in the manner in which this contract has been awarded, including the absence of a competitive bidding process and NOCMA’s failure to adhere to mandatory procurement procedures as outlined in the Public Procurement and Disposal of Assets (PPDA) Act,” reads an excerpt of the letter.
YAS has also cited the advance payment as a red flag.
“The decision to pay 50% of the contract sum upfront to a local forex bureau further exacerbates concerns surrounding transparency in this deal. This payment arrangement deviates from standard procurement practices, where payments are typically made upon delivery of goods and services.
“The involvement of a forex bureau in a contract of this nature also raises questions about whether proper financial safeguards are in place to protect public funds,” reads the letter.
Ombudsman Grace Malera confirmed receiving the letter in a written response to the Platform for Investigative Journalism (PIJ).
She indicated that her office was now processing the complaint.
“Yes, I can confirm that the office of the Ombudsman received the complaint from YAS. The complaint is undergoing screening processes in line with the office’s complaint handling procedures. If it establishes that the issues raised fall under the jurisdiction of the Ombudsman, the office will proceed to commence an investigation into the matter,” Malera said.
Recently, local media reported that QLV Digitalfx (Malawi) Limited representatives were granted a contract without following proper laws.
There have also been concerns about the company’s alleged links to a royal family in the UAE, raising suspicion especially as all payments were to be made via Lilongwe-based forex bureau, which its directors own.
Apart from the fuel deal, the UAE group is also allegedly to have been illegally granted another major Malawi government contract, a license to own a gold mine in Kasungu
