Scandal hits Malawi's Health Ministry, Mulli brothers in the mix
The extent to which Mulli Brothers corruptly infiltrated the government tender award process continues to unravel after the death of Bingu wa Mutharika, who was Mulli's close business associate and Mulhakho home boy.
A Ministry of Health procurement team in Malawi reportedly failed to scrutinise results of a December 2009 tender for the supply of mosquito spray equipment, which ended in favour of Mulli Brothers.
The move saw wrong gear being supplied, questions raised by donors and Mulli replacing some unsuitable equipment.
Experts question the manner in which the approval was fast-tracked when such exercises take a long time given the massive nature of documents involved.
According to the experts, the flawed decision may have hampered Malawi’s efforts to achieve Millennium Development Goal (MDG) 6C to halt and begin reversing incidents of malaria by 2015.
The World Health Organisation (WHO) recommends indoor residual spray (IRS) as a primary means of malaria control besides use of insecticide-treated bed nets and prompt treatment of confirmed cases.
The Nation interviews with some district health officers (DHOs) also showed that most of the supplied equipment is not suitable for indoor spraying, but rather for agricultural use.
Documents also reveal a protracted battle going on since 2010 with donors under the health Sector Wide Approach (SWAp), questioning how the Ministry of Health and its internal procurement committee (IPC) offered a K250 million (about $1 million) tender to Mulli Brothers—covering the sprayers, chemicals and protective gear.
The tender was for the supply of 1 990 indoor sprayers valued at K89 550 000 (about $358 200), chemicals at a cost of K127 088 000 (about $508 352) and protective equipment worth K32 945 962 (about $131 783).
The documents also point to some short cuts, which donors suspect and claim were meant to favour Mulli Brothers to supply the sprayers.
According to a November 14 2010 report to members of the Financial Management and Procurement Technical Working Group (FM&P TWG), a sub-sector in SWAp, short cuts were allegedly evident from the way the IPC handled the tender and the speed with which the ODPP handled the request for a no-objection to the Mulli bid.
According to the report, the Ministry of Health forwarded a letter seeking no objection from the Office of the Director of Public Procurement (ODPP) on March 9 2010 and by March 11, 2010, the review was complete, to the surprise of SWAp members.
“This was a very quick turnaround for a review which required the careful reading of eighteen (18) Supplier Bid Submissions, some of which contained more than one hundred (100) pages,” reads the report in part.
The package for review also included the standard bidding document (SBD) “for this tender dated December 14, 2009 (with which the reviewer would not have been familiar), the MoH IPC’s Bid Evaluation Report (BER) justifying its recommendation for the award of the contract and the procuring entity’s bidding document amendment addendum.”
The reviewer, a principal monitoring officer (PMO 3), wrote his comments of the bid for the approval by authorities indicating the bid was okay.
Former ODPP director Bright Mangulama endorsed and approved the no-objection on March 12, but wrote a formal official no-objection letter on Monday March 15 2011.
Apart from the speed, the conduct at the ODPP reportedly violated parameters agreed between the Malawi government and SWAp.
Among others, a memorandum of understanding (MoU) signed in 2004 stipulated that all procurements of goods by the Ministry of Health above K10 million (about $40 000) should be passed for a prior review by a Procurement Oversight Agent (POA) located within the ODPP premises.
Although the POA was around at the time the ODPP was reviewing this tender, the documents were not passed through him.
“Therefore, when ODPP chose not to pass the IRS Materials Tender Bid Evaluation Report (BER) and Recommendations for Award of Contracts to the POA for prior review, ODPP was in explicit breach of an international agreement signed by the Government of Malawi,” reads the SWAp report.
‘Matter was referred to ACB’
On Tuesday this week, Ministry of Health spokesperson Henry Chimbali acknowledged the donors queried the matter.
“There has been many observations as regards this issue and to clear that out, we sent the SWAp forensic audit report to ACB for further investigations and follow-up,” he said in a written response.
Asked why this was the case, Chimbali said the IPC “did observe the defect on the quality of the nozzles and corrective measures were made that they be replaced.”
According to Chimbali, Mulli replaced the nozzles without an extra cost. Mulli Brothers had supplied sprayers with wrong nozzles, contrary to tender specification.
Said Chimbali: “This shortfall was observed, that is why the defect on the nozzles was noticed and [we] asked the supplier to supply items as per the original specifications.”
Mulli bought the sprayers and nozzles from a Chinese manufacturer, G&E Equipment Limited.
A technical specification and compliance sheet for the bid document stipulated that the Ministry of Health wanted nozzle type 8002, but Mulli supplied flat nozzle type 8008 although in their bidding, they showed they would supply the former.
The POA, in his report, suggests that Mulli “made untrue statement by certifying that the equipment offered by their firm matches the required specifications.”
“It is possible that these two misstatements by Mulli Brothers may have confused the MoH’s Bid Evaluation team, but it appears that there was, nevertheless, a concerted attempt by the MoH IPC Evaluation Team to further manipulate the award of this contract in favour of Mulli Brothers by falsifying the outcome of the Post-Qualification part of the evaluation.
“This was done by stating that the Mulli Brothers Bid Submission complied with all the Post-Qualification criteria...,” concludes the SWAp audit.
But Chimbali argued the ministry believed the procurement process was properly done.
The sprayers, meant for the Indoor Residual Spraying campaign of the Malaria Control Programme, were distributed in malaria-prone districts of Karonga, Nkhata Bay, Mangochi, Chikhwawa, Salima and Nsanje.
Chimbali argued that most of the sprayers are still functional although some of them malfunctioned during the first round of the campaign.
“I know that some broke down, but I don’t have the exact figures with me now,” he said in his written response, without elaborating whether this was due to the wrong specifications or handling of the equipment by the users
The Nation audit of the equipment in Karonga, Nkhata Bay, Mangochi, Chikhwawa and Nsanje shows that SWAp or the taxpayer will have to cough more millions replacing the equipment if the exercise is to be successful in the second round.
According to Chimbali, respective districts will pay for repairs of the broken down sprayers from their budget allocations.
Chimbali said the ministry referred the matter to the Anti-Corruption Bureau (ACB) for further investigations.
But the ACB denies receiving any complaint for investigation on the matter, although the Ministry of Health insists they referred the issue to the bureau for action.
“Records indicate that the Anti-Corruption Bureau did not receive the complaint from Ministry of Health on the procurement of residual sprayers. You may wish to provide the information to the bureau for it to see what action...can be taken on the matter,” was the response from Egrita Ndala, senior public relations officer for the bureau.
Asked on Thursday on the irregularities regarding his company, Mulli Brothers chairperson and managing director Leston Mulli said he has nothing to say because “I am not the one who did the procurement.”
“Those who have a problem with the procurement can comment better,” he said.