Zambian Watchdog

Yamba orders ZRA to reinstate Bradwel, the ‘corrupt’ company Sata stopped payment of K4b for supply of scanners

December 15
06:52 2012

Secretary to the Treasury Fredson Yamba has instructed Zambia Revenue Authority to reinstate the company that President Michael Sata accused of corruptly supplying scanners to ZRA.

Just after assuming power in late 2011, the PF government appointed a commission of enquiry headed by Kingsley Chanda to investigate the various corrupt activities and contracts at ZRA at a very high cost to the nation.

Among the many issues handled was the concession agreement between Bradwell Global Corporation Limited for the operation and maintenance of relocatable containers/vehicle inspection scanners.

This followed President Michael Sata’ s action to  stop payment to Bradwell in the amount of K4 billion.

The Commission of Enquiry recommended the cancellation of the concession and cabinet approved the cancellation.

But sources within the ministry and ZRA have revealed that Secretary to Treasury Fredson Yamba has  instructed  ZRA to reinstate Bradwell and without tender and without cabinet approval.

ZRA has just issued a tender for the Onsite Acceptance Test for the 8 scanners to which a company is selected after the competitive bid.

‘We have been left wondering why Bradwell has been imposed on ZRA without going to tender.

‘This is a company that has a share capital of only £2.00 and has been making losses since inception with no international references. Their losses in 2011 are to the tune of £600,000.

‘We wonder what the British Embassy has to say to this as this is a one man show company involved in corruption. What does the law say in Britain regarding company’s involved in corruption. It would be interesting to know what the British Ambassador has to say seeing that two weeks ago he was officiating at the Worlds Anti Corruption Day’, said one source.

Sources believe that someone in government has been bribed to reinstate Bradwell?

‘Remember a Mr. Chipoya was fired from State House on allegations that Bradwell paid him US$2000 to set up a meeting with the President,’ said a source.

The sources explained  that Bradwell is a loss making company. See the attached financial statement for Bradwell.

‘How do you expect this company to perform? Bradwell is not even among the top 10 companies in the world in relation to scanner services.

‘Please help bring sanity to ZRA as we are about to go backwards. This is not professionalism at all. Even legally how do you explain this? Where is the fight against corruption? This is not professionalism at all’, said one source.

The sources further asked: ‘what was the purpose of holding the commission of enquiry and cabinet approving its findings if you are going to throw out everything that they recommended. If this is the case then ZAMTEL should be given back too. So should Finance Bank to FNB.’

Background

One of the earliest actions of President Michael Sata in office was to order the law enforcement agencies to stop a K4 billion payment by the Zambia Revenue Authority (ZRA) to a company that managed their scanners on the Zambia/Tanzania border.

He said that the company should not be paid because it was fake and was owned by someone who previously occupied his (Sata’s) office and that the company was registered under fake names “This morning, the Zambia Revenue Authority (ZRA) was supposed to pay K4 billion to a front of somebody who was in my office. This should not be done. The company was supposed to receive K4 billion as a result of a bogus agreement made with ZRA,” he said. He said the scanners at the border post belonged to the government but they were given to “conmen” to manage. He said the ZRA should hire its own people to manage the scanners and not a bogus company.  He instructed then inspector-general of police, Martin Malama, to ensure that no payment was made.

Subsequently he dissolved the ZRA board of directors, suspended the director-general and the head of customs.

He appointed a commission of inquiry.

Later, Finance minister Alexander Chikwanda issued the following statement:

Chanda ZRA enquiry: Government accepts all findings

Lusaka: Cabinet at its sitting on Wednesday 25th January, 2012 accepted without reservations the report on the findings of the Commission of Inquiry into the operations of Zambia Revenue Authority.  Cabinet has deemed it desirable and expedient to reverse fraudulent procurements regarding Zambia Revenue Authority related contracts with Bradwell International, and Cargo Scan.

Further, Cabinet has directed the reversal of the concession of the borders namely; Kasumbalesa, Nakonde, Jimbe, Kipushi, Mwami and Chanida and the reversal of tax concession offered to Varum Beverages Limited, the promoters of the Pepsi Zambia Project. In addition, Cabinet has directed the implementation of other administrative measures incidental to the same as recommended by the Commission of Inquiry.

Consequently, Cabinet has ordered with IMMEDIATE EFFECT:

a)    That the Cargo Scan contract on the operations and maintenance of Smith Detection scanners be terminated;

b)   That the Bradwell contract on the operation and maintenance of Nuctech scanners be terminated;

c)    That Nuctech be compelled to perform their contractual obligations of installation, operation and maintenance of eight scanners;

d)    That the pre-requisites for the installation and operations of scanners be met by government

e)    That ZRA assumes ownership of the scanners and work out appropriate measures for loan repayment for the scanners;

f)     That the Government takes over the Kasumbalesa border project and reverses the concession of the border;

g)    That five border concessions of Jimbe, Nakonde, Chanida, Kipushi and Mwami to one concessionaire be cancelled and that government takes up the responsibility of development of infrastructure at those borders;

h)    That Government immediately takeovers the Nakonde Border infrastructure development project which was concessioned under a PPP arrangement when it had reached 75 percent completion (roof level) worth K23 billion of certified works using government resources;

i)     That all policies and pieces of legislation that deal with awarding of public contracts be revised in particular the PPP policy and its Act is defective and at variance with the Public Procurement Act;

j)     That the role of the Council of Ministers under 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;

k)    That the PPP Unit in the Ministry of Finance be  immediately restructured and administratively re-organised to pave way for its directiveness and effectiveness;

l)     That the tax deferment for Varum Beverages Zambia Limited be revoked and company be made to pay outstanding tax arrears and criminal investigations be instituted on persons found wanting for unlawful conduct;

m)  That the Hallmark contract on the management and maintenance of the border infrastructure at Chirundu be cancelled and the Ministry of Transport, Works, Supply and Communication hands over the management of the Chirundu Border infrastructure to ZRA;

n)    That an urgent review of the ZRA revenue collection strategy and organisational structure be made;

o)   That appropriate action be undertaken based on the Commission findings with regards to the role played by some individuals whose names, positions and reasons are provided for in the report.

While Government will act with requisite expedition to put into effect the recommendations of the Commission of Inquiry in the conduct of ZRA, every conceivable measure will be taken to ensure that all actions are strictly in conformity with the law. Government has no scores to settle but there will be no sanctuary given to those who have committed crimes against society through fragrant abuse of office and trust which the people of Zambia reposed in them.

  • Issued by Hon. Alexander B. Chikwanda, MP,  Minister of Finance and National Planning, 26th January, 2012


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