MCD Civil Engineers fail to account for K60m over supply of equipment, AG report
By Staff Reporter
MCD Civil and Mechanical Engineers Limited has failed to account for over K60 million meant for supply of construction equipment to government, the Auditor General’s report has revealed.
According to the 2016 Auditor General’s report on page 138, the company under the directorship of Annie Mulenga and Davies Mwenya of Kitwe, in November 2015 received US$9,240,370 against the contract price of US$11,875,800 for 12 dredgers to be supplied within eight months from the date of advance payment.
“MCD Civil and Mechanical Engineering in paragraph 40 of the Auditor General’s Report for the financial year ended 31st December 2015, mention was made of the total amount of US$9,240,370 paid to MCD Civil and Mechanical Engineering as of November 2015 for the supply of twelve (12) dredging machines at the total contract price of US$11,875,800 and a delivery period of eight (8) months from the date of advance payment,” the report revealed.
“It was further mentioned that as of July 2016, the supplier had not delivered any of the dredging machines. In their Report for the First Session of the Twelfth National Assembly, the Public Accounts Committee strongly recommended that the Ministry must give the contractor a deadline by which date all the dredgers must be delivered failure to which the Ministry must fully enforce its contractual rights.”
The report further indicates that a scrutiny of the contract document in 2017 revealed that specifications for the machinery to be delivered were six (6) cutter dredgers and six (6) excavators, not twelve (12) dredgers as indicated on the face of the contract document.
A review of the situation during the audit of 2016 accounts revealed that the contractor had only supplied three (3) amphibious excavators valued at US$2,968,950 leaving a balance of three (3) amphibious excavators and six (6) cutter suction dredgers costing US$6,271,420.
“It could not be ascertained as to when the three (3) undelivered excavators and six (6) cutter dredgers would be delivered and no security guarantee was availed for the balance of US$6,271,420 being held by the supplier.
In November 2015, an amount of $9,240,370 approximately K91,017,644 kwacha was paid to MCD Civil and Mechanical Engineers.
The net effect is that $6,271,420 of public funds were lost as no security guarantee was availed for the balance of $6,271,420 being held by the supplier as revealed on page 138 of the auditor general’s report.