AG reveals flaws in Harry Mwanga Nkumbula airport contract

Harry Mwaanga Nkumbula Airport - Livingstone, Zambia July 2013 Pre-UNWTO in Pictures

THE latest Auditor General’s report on parastatal bodies has revealed how a Chinese firm, Yangts Jiang Enterprise Limited hiked an initial contract sum of K33 million for the construction of the Harry Mwaanga Nkumbula International Airport to K66 million irregularly.

According to the report, on July 22, 2010, National Airports Corporation Limited, (NACL) awarded the Chinese firm a contract sum of K33,769,239 for phase one of the construction works at the Harry Mwaanga Nkumbula International Airport.

The scope of works involved construction of the concourse and departure lounge.

According to the report, for the financial year ended December 31 2012, the site was handed over to the firm on August 17, 2010 with a completion period of 20 months to April 2012.

The Public Procurement regulation number 150 (3) states that a contract shall include a maximum limit on the variation which may be issued without an amendment to the contract in accordance with Regulation No. 149.

However, contrary to the above provision, the contract had no ceiling for the maximum limit on the variation and in this regard, the contract was varied upwards by K32, 880,324 from the initial contract price of K33, 769,239.

This resulted into an increase in the contract price to the sum of K66, 649,563, signifying a 97 per cent increase on the initial contract price.

In addition, as a result of the variations in the contract sums, K5,026,485 was paid for redesigning the works.

The Auditor’s report however explained that in a response dated October 31, 2013, the controlling officer at the Ministry of Works and Supply stated that authority for the variations was obtained from the Zambia Public Procurement Authority (ZPPA), but as of December 2013, no documentary evidence was availed for audit.

In a related case, the Auditor General’s report also showed how NACL entered into a non-performing contract with Ubitech

System Incorporation of Canada at a total contracted sum of K2,412,242 for the supply, delivery, installation, and commissioning of Aeronautical Information System (AIMS).

According to the report, one of the pertinent deliverables in the implementation of the AIMS project was the provision of a system to allow the corporation to manage billing information and generate invoices and bills for the airspace users.

But the report revealed that, although as of December 2013, the contractor had been paid in full, the billing system for air navigation services and passenger service charges had not been doneand NACL had continued to use the manual system.

The Auditor General’s report also highlighted how, during the period July 2011 to June 2013, the NACL Board of Directors travelled to Mozambique, South Africa, Dubai and China for purposes of benchmarking the operations of those countries’ airports in line with re-developing the Kenneth Kaunda International Airport.

A total of K861,778 was spent in respect of allowances and airfares.

However, as of December 2013, no report on the benchmarking exercise had been produced and it was, therefore, not clear how that exercise had improved the operations of NACL.

The report further questioned payment of sitting allowances to board members in excess of K152, 500 in the period February 11, 2012 to July 13, 2013.


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