Dar es Salaam. A deal to buy 299 freight wagons worth close to Sh60 billion from India was full of irregularities, according to an initial investigation report by the Public Procurement Regulatory Authority (PPRA).
Kigoma South Member of Parliament David Kafulila told reporters yesterday that TRL gave the firm the deal without carrying out further investigations despite the fact that it was supposed to establish whether the winning firm had the finances and experts to manage the project.
“TRL didn’t conduct due diligence before awarding the tender to Hindustan Engineering and Industries Limited--contrary to the law,” says the report that Mr Kafulila handed out to reporters.
Even though international competitive tendering procedures were expected to apply, the PPRA report shows that the tenders were advertised only in a local newspaper contrary to the procurement law. TRL’s failure to advertise broadly did not only break the law but also denied international companies the opportunity to compete.
TRL also delayed the advance payment. TRL and Hindustan Engineering signed the contract to import the wagons on March 3, 2013, and the firm was expected to import the wagons within a year of signing of the contract. But TRL delayed the advance payment until August 2, 2013, and this delayed the implementation of the contract. According to Mr Kafulila, who is also the shadow minister for Energy and Trade, PPRA’s initial investigation also shows that TRL ordered the wagons without setting out specifications.
TRL reportedly sent four teams to India on different occasions to inspect the wagons that were being manufactured and each team issued new directives--which means the TRL user department did not work out specifications before awarding the tender meaning that one of the key factors for determining the price of a unit was not there.
The document indicates that PPRA will complete its investigation on the matter within the next two months, provided that it is accorded the assistance it needs from other authorities.
According to the report, PPRA intends to request experts from the Surface and Marine Transport Regulatory Authority (Sumatra) and the Tanzania-Zambia Railway Authority (Tazara) to inspect the quality of the wagons.
Transport minister Samuel Sitta, who is new to the job, earlier this month stopped importation of the remaining 124 freight wagons supplied by an Indian firm pending a report by a taskforce that was mandated to investigate claims that they were defective.
The minister also ordered the board to prepare a report on the matter by Friday. The report is expected to recommend the fate of six senior TRL officials who were suspended in connection with the scam.
TRL signed two contracts with an Indian company in 2013 for the purchase of 25 Ballast Hopper Bogie wagons worth Sh8.3 billion and 274 goods wagons worth about Sh51 billion.
TRL has so far received 150 wagons and the other 124 are expected by the end of this month (Tuesday). The carriages in question were bought from India’s Hindustan Engineering and Industries.
If any irregularities are discovered the government will take action against the supplier, according to Mr Sitta.
The first step would be to terminate the contract on grounds of lack of trust. The suspects would then be taken to court on a charge of economic sabotage.
“We are serious about this and the engineering department will help us inspect them because we want to satisfy ourselves that the wagons are durable,” Mr Sitta told reporters at a press conference earlier this month.
TRL did not incur any loss, the minister added, because it did not pay fully for the consignment as the contract allows the purchaser to withhold part of the payment until the wagons are tested within the warrant period.
Six TRL officials were sent home to pave the way for an investigation into their alleged role in the procurement tender.
Former Transport minister Harrison Mwakyembe ordered the suspension of the officials, including the company’s deputy managing director and the finance director.
Dr Mwakyembe also ordered TRL to disband the tender board and suspend all officials who travelled to India to assess the wagons that were
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TRL’s Sh60 billion Wagons deal sealed without any checks
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Shadow minister for Industry and Trade, Mr David Kafulila, displays a Public Procurement Regulatory Authority (PPRA) provisional report at a news conference in Dar es Salaam yesterday. PHOTO|VENANCE NESTORY
By By Frank Kimboy The Citizen Reporter
Posted Sunday, March 29 2015 at 10:25
In Summary
Kigoma South Member of Parliament David Kafulila told reporters yesterday that TRL gave the firm the deal without carrying out further investigations despite the fact that it was supposed to establish whether the winning firm had the finances and experts to manage the project.
If any irregularities are discovered the government will take action against the supplier, according to Mr Sitta.
The first step would be to terminate the contract on grounds of lack of trust. The suspects would then be taken to court on a charge of economic sabotage.
“We are serious about this and the engineering department will help us inspect them because we want to satisfy ourselves that the wagons are durable,” Mr Sitta told reporters at a press conference earlier this month.
TRL did not incur any loss, the minister added, because it did not pay fully for the consignment as the contract allows the purchaser to withhold part of the payment until the wagons are tested within the warrant period.
Six TRL officials were sent home to pave the way for an investigation into their alleged role in the procurement tender.
Former Transport minister Harrison Mwakyembe ordered the suspension of the officials, including the company’s deputy managing director and the finance director.
Dr Mwakyembe also ordered TRL to disband the tender board and suspend all officials who travelled to India to assess the wagons that were later proved to be of low standard.
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