Corruption Concerns over ZTE’s No-Bid Contract in Lusaka

Accusations of government graft are quickly spreading in Lusaka following the revelation that a $210 million contract from the Ministry of Home Affairs to provide CCTV services was awarded a Chinese company, ZTE, without going through the normal public tender procedures.

The tender to install street cameras in Lusaka was awarded to ZTE early this year, but sources have raised an alert saying the business was going to cost the treasury colossal sums of money, with many people accusing Patriotic Front officials of getting a kickback.

There have been plans by the previous government to introduce closed circuit television (CCTV) cameras on Zambian streets, but when the PF regime took over, the tender aspect was ignored and opted to engage ZTE through the direct contract method.

The direct contract method is used to engage suppliers when there are “no other firms that have the capacity to do the required works,” but in the CCTV tender, other local and foreign companies had showed the capacity and interest to do the work.

“Without going through a public tender process, potential contractors do not have the opportunity to evaluate the bid carefully and submit the best solution and price for the work involved. Any public tender needs such scrutiny because savings are made. Without an open public tender, local companies were denied an opportunity to do business,” said a source familiar with the Ministry contract.

The initiative to install CCTV on the streets was meant to help the law enforcement agencies such as the police, Road Transport and Safety Agency and Drug Enforcement Commission to curb crime and assist in their criminal investigations.

The Zambia Public Procurement Authority Act dictates that all public procurement deals must only be given to the preferred supplier following an open public tender. This gives an opportunity to all deserving would-be suppliers to participate and to also allow the government to weigh-in competition, compare rates and have a wider set of options.

“Such an approach is the best and prescribed under the public tender procedures because it ensures the best solutions and the government budgets are implemented with much efficiency,” the source said.

Without such checks and balances, projects risk the same pitfalls as similar projects elsewhere that have run into problems amid allegations of sub-standard equipment, delayed installation and corruption.

According to sources at the ministry and Zambian firms that wanted to participate in the business, senior government official allegedly received hefty bribes before awarding the direct tender to ZTE.

“Some people have queried how the US$210 million tender was awarded to ZTE when there are other interested people who have the equal capacity. This is the same corruption, which the PF members complained about under MMD. In fact, the plan to install CCTV cameras was started by the previous but the current leaders seem to have mishandled it,” the source said.

The sources from the ministry of Home Affairs and the private sector claimed that the US$210 million tender awarded to ZTE was an exaggeration because the tender to install street cameras in Lusaka cost a quarter of this amount.

“This amount of US$210 million is too much for such a job. It could have been much better if the tender was subjected to a public tender so that the companies compete. According to people who wanted to participate in the tender, the job was going to cost taxpayers about a quarter of that amount.

The government has other CCTV contracts with ZTE n which the Ministry of Defence is installing cameras in strategic places and security installations. In January 2013, the Ministry of Home Affairs signed a US$13 million CCTV contract

That original US$13 million contract was signed in January and the Ministry of Home Affairs CCTV project was tacked on to that just two weeks later as a next phase expansion and at US$210 million was more than 16 times the value of the original underlying agreement.

Ministry of Home affairs Permanent Secretary Maxwell and representatives from the Chinese ZTE firm were not immediately available for comments at the time of publishing.

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