Prosecute Rupiah, urges ZRA inquiry

Prosecute Rupiah, urges ZRA inquiry
By Kabanda Chulu
Fri 27 Jan. 2012, 14:00 CAT

THE ZRA Comm-ission of Inquiry has recommended that appropriate action be taken against Rupiah Banda and 12 former government officials for the fraudulent procurements regarding border scanners and concession-related contracts.

But home affairs minister Kennedy Sakeni yesterday said the 12 of those referred to in the report would have to face the law but there was a predicament in terms of making Banda answerable because of issues of his immunity from prosecution.

And the government has with immediate effect terminated the contracts given to Bradwell International and Cargo Scan to manage border scanners. The government has also cancelled the concession given to one company to develop border infrastructure across the country.

Meanwhile finance minister Alexander Chikwanda has said the government has no scores to settle but will provide no sanctuary to people who have committed crimes against society.

According to the report of the findings of the Commission of Inquiry released yesterday, senior MMD government officials, among them former president Banda must be investigated regarding the role they played in the fraudulent manner in awarding Zambia Revenue Authority (ZRA) related contracts.

Banda, then vice-president, played a key role in the procurement of four extra scanners and the increase in the loan from US$ 100 million to US$ 125 million while former finance minister Situmbeko Musokotwane was involved in awarding contract to Bradwell International and giving an illegal tax deferment on consumption taxes to Varun Beverages (Pepsi).

Dr Musokotwane has since been questioned by security wings investigating various offence committed by the previous government.

It stated that former ministers Mike Mulongoti, Prof Geoffrey Lungwangwa and Dr Musokotwane must be investigated for irregularities surrounding the awarding of the Kasumbalesa border concession.

But Mulongoti responded that the council of ministers had authority to approve the border projects.

"It was a project initiated by the developers and they sponsored it because they had money and ideas so what is the loss to government? The questions to ask is, was it public money or private money and would it be normal that an investor comes to Zambia with an idea and money be subjected to public tender, for what?" asked Mulongoti.

"Ask yourself, if you were to build a hospital in Kalingalinga and you have money and it is your idea, would you accept that they do a public tender for your money an idea for the other people to come on board is that possible?"

The report also stated that appropriate action must be taken against former ministers Mulongoti, Eustackio Kazonga, Prof Lungwangwa and Chileshe Kapwepwe for awarding the five border post concessions to a single entity.

The report further recommended that former secretary to the treasury Likolo Ndalamei must be investigated for the role played in the cancellation of the Nakonde border construction project, while former finance permanent secretary Emmanuel Ngulube should also be investigated in the role played in awarding of the Bradwell contract.

When asked for a comment, Kapwepwe said she would only comment when the report is availed to her with Prof Lungwangwa saying: ‘I can't comment on something that I have not read."

Ndalamei said: ‘I don't think I did anything wrong but I need to read the context of the findings before I can comment.'

But Sakeni said all those mentioned would have to provide answers to investigators.

He said the only predicament was on Banda because of the immunity clause.

Sakeni said the immunity issue had been left to people to debate first.

He said security officials were on the ground and there would not be any sacred cows.

The report stated that appropriate action be taken against ZRA board secretary Nana Mudenda and director of administration Tenthani Banda for their involvement in payments to Cargo Scan with no regard to service delivery and contract terms.

The report also recommended that former ZRA commissioner generals Wisdom Nhekairo (who has since been warned and cautioned by police) and Chriticles Mwansa should be investigated for their involvement in the Bradwell contract, justification of direct bidding (single sourcing) based on flimsy grounds, payments to Cargo Scan with no regard to service delivery and contract terms and justifying the procurement of four additional scanners that were not needed and reduction of floatation period.

It further recommended that former ZPPA director general David Kapitolo and his predecessor Samuel Chibuye be investigated for failing to verify information availed to ZPPA by ZRA in relation to direct bidding.

And the government has further revoked the tax deferment for Varum Beverages and ordered that the company pays the tax arrears and people involved in the transaction face criminal prosecutions.

Chikwanda said Cabinet had deemed it desirable and expedient to reverse fraudulent procurements regarding Zambia Revenue Authority related contracts with Bradwell International and Cargo Scan as well as the concessions to operate border posts.

He said ZRA must assume ownership of the scanners and work out appropriate measures for loan repayment for the scanners.

"We have terminated with immediate effect, the Cargo Scan contract on the operations and maintenance of Smith Detection scanners and the Bradwell contract on the operation and maintenance of Nuchtech scanners, and Nuchtech be compelled to perform their contractual obligations of installation, operation and maintenance of eight scanners," Chikwanda said, during a media briefing.

"We have also taken over the Kasumbalesa border project and the concession has been reversed and also the five border concessions of Jimbe, Nakonde, Chanida, Kipushi and Mwami be cancelled because they were given to one company and government will take up the responsibility of development of infrastructure at those borders."

He said the government has immediately taken over the Nakonde border infrastructure project which was concessioned under a PPP arrangement when it has reached 75 per cent completion worth K23 billion of certified works using government money.

"We shall revise all policies and pieces of legislation that deal with awarding of public contracts in particular the PPP policy and its Act is defective and at variance with the public procurement Act," Chikwanda said.

"The role of ministers under the PPP Act should be reviewed and reduced to policy guidance while awarding of contracts should be retained by ZPPA in consultation with the Attorney General's office."

He said the tax deferment for Varun Beverages had been revoked and the company should pay outstanding arrears amounting to K13 billion per annum.

"Concessions or incentives must be given within the confines of the law and not exclusively to individuals or friends because there is procedure to follow when doing things and investors who acquired incentives or concessions should not worry so long the deals were done within the law. We are not prosecutors or judges but it is up to law enforcement agencies to take up these matters especially where there was unlawful," said Chikwanda.

"Government has no scores to settle but there will be no sanctuary given to those who have committed crimes against society through abuse of office and trust which the people of Zambia reposed in them."

And Secretary to the Treasury Fredson Yamba said the government will soon write the affected parties about the development.

"For tax deferment, I would have loved the money to be refunded immediately but we shall write to Varun so that they give us a position and when they can pay. But the incentive was illegal because it was exclusive but they will continue enjoying other incentives and for border concessions, it is something that needs negotiations so that there is proper transfer of operations," said Yamba.