MERA Board to meet on Aggreko generators deal

By Mulotwa Mulotwa:

Malawi Energy Regulatory Authority [MERA] board is meeting on Tuesday this week to consider extending the Aggreko contract.

This board has specifically been called for the Aggreko deal.

Reviewing its decision on new oil deal, which it rejected last week, is not part of the MERA board agenda, but Secretary to the President and Cabinet [SPC] and NOCMA board chairperson, Zangazanga Chikhosi has exerted pressure on the energy regulator to reconsider position on oil deal, on Tuesday when board meets for Aggreko.

We are yet to see if the MERA board will play ball.

We will get back to the NOCMA oil deal shortly. Please, don’t be confused. It is two deals we are addressing; new oil contract and Aggreko.

Let us deal with Aggreko, now. The K57.7 billion emergency power generators deal, which the Electricity Supply Corporation of Malawi (Escom) awarded to Aggreko in November 2017, was done without following procurement procedures.

The power which Escom buys from Aggreko is very expensive, pegged at an average of K216 per kilowatt per hour (Kwh) compared with Egenco’s hydro generated power which costs K31.8 per Kwh. Aggreko’s power at K216 per Kwh is even more expensive than Escom’s electricity selling price of K92.78 per Kwh, at the time Deloitte audited Escom [as at June 30, 2019]. Hypothetically, it is a funny model, even when the generators are switched off, Malawians deep into their pockets and pay Aggreko, still. Thanks to Perks Ligoya, Lloyd Muhara and Collins Magalasi, the smart boys who negotiated the deal.

As MERA meets on Tuesday to consider Aggreko, the new administration has not identified an alternative. Your guess is as good as this page what will happen if there is no alternative to Aggreko, 6 months in government. Clearly, there is no intention to clear the rubble nor DPP’s mess. Good reasons for continuing with Aggreko, built already.

Pasted below is a document, snippets of how Escom procured services in the past, over and above Aggreko.

Both President Lazrus Chakwera and Vice-President, Saulosi Chilima vehemently campaigned against the Aggreko deal, describing it “stinky” and no sooner they were to get into Government than the deal would breathe its last. It remains to be seen if the campaign talk will be walked as last week Chakwera lambasted voters for querying campaign promises, calling it an obsession.

No hope!

Kambala, Minister of Energy and Natural Resources, is also on record to have spanked the Aggreko deal, when he was appointed Minister, saying it won’t be renewed.

Something has changed, the 3 [ Chakwera, Chilima & Kambala] are quiet and it is up for extension on Tuesday by the board and should MERA board side with Malawians, it will be rejected. On good authority, that rejection won’t augur well with the current administration, if it were to occur. They can as well refute this assertion, we will report when they do and correct the position, then.

Back to the oil deal, MERA board rejected to approve NOCMA’s wish to have IPG and Lakeside Oil be given oil deals, largely because, Helen Buluma and her Management declined to share the evaluation report of all bidders with MERA, even when the regulator asked [ in writing] them to, NOCMA simply said: “No, thank you.” This was the biggest hurdle for the board last week and had no choice but to reject, accepting IPG and Lake Side oil deals, just like that.

MERA had no choice but to rubbish the entire transaction and withheld their approval. Quick facts, Helen rushed to ACB, a few months back, accusing Presidential aides of cajoling her on the deal and at the same time cancelation was expected and re-tendering.

None of that happened, it is from the same list of bidders that NOCMA found the “new” winners and asked MERA to approve. Now it is clear, they are only differing on who should be awarded the deals. They ALL agree, somehow, the same list must be considered, it is on WHO, should be awarded, where lies the scandal and in effect betrayal to Malawians.

For the avoidance of doubt, the exchanges between NOCMA and MERA, which we have seen, lately, are between Ishmael Chioko and Helen Buluma. Today, this page will not discuss the duo’s political persuasions nor why Buluma is still in charge at NOCMA. The entire Lazrus Chakwera ranting at State House last time on correcting the position at NOCMA, was a smokescreen. The woman in charge at NOCMA is Helen, to this day.

Minister of Energy; Newton Kambala announced at a news conference late last year announced the cancellation of the oil tender, adding that he had already written to the Nocma board to put a new executive management team in place, through a transparent process within the shortest possible time.

Said Kambala: “In the absence of a credible management, the fuel supply tender be cancelled. As a government, we take public outcry very seriously and this is why His Excellency the State President issued a directive through his public statement on November 5 2020, that issues at Nocma needed to be resolved immediately.

Kambala’s statement last year, runs counter to new developments.

MERA already dealt with the oil deal, threw it away and NOCMA is required to re-start the process. But SPC, Chikhosi who chairs the NOCMA board is for lack of a better term asking MERA to eat a humble pie, reverse its own decision and proceed to approve Lakeside Oil and IPG

It is a strange request coming from the SPC.

Housekeeping issues.

At its peak, the DPP regime modelled the NOCMA board to be chaired by former SPC Lloyd Muhara. This was irregular, and Tonse when in opposition condemned this arrangement. It is now water under the bridge, the DPP model is being followed religiously by MCP. Guess it is working for MCP too. DPP remains a system, there is a reason for every bad law/decision they passed.

To support eating, simply.

So, in Government, the MERA Board and all other boards for state firms report into Comptroller, largely, over and above regulatory arms, who then report into SPC. The irony is that SPC chairs the NOCMA board, does it mean he is reporting to Comptroller, his junior on NOCMA? Or he now reports NOCMA business to his boss President Lazrus Chakwera directly?

The Mulotwa Mulotwa and its sister page Waiting for Godot pages, conclude that SPC reports all NOCMA Business to the State President and whatever he is doing has the blessing of his only BOSS and that is the President.

The Presidency may wish to refute this assertion and the page will correct the position, then.

The confusion is, as Chikhosi exerts pressure on the MERA board to reconsider its decision on the oil deal, is that in his capacity as NOCMA board chairperson or SPC?

This is troubling the MERA board.

SPC is senior to the MERA board and can direct business, somehow, but as NOCMA Chairperson, he is limited and has to be respectful as MERA is his regulator.

Good people, don’t be like Everton Chimulirenji, are you following the conflict of interest here? Or are you still wondering why Helen Buluma is still calling shots at NOCMA or why SPC is not being fired despite messing up severally?

This page will post how all companies that bid for oil performed, ranked and in your judgment see how Lake Oil and IPG, who were chosen, scored. This will make you understand why the evaluation report is being kept as a secret for a public procurement, like this one. The two were not the best, maybe IPG was close, but Lake Oil is not even in the top 10, of the 23 bidders.

This MCP government [Call them Tonse when drunk] is becoming an interesting entity.

Next, we will start sharing snippets as to who these oil companies are, such as their bankruptcy downsides, for some etc.

Godot, we waited for long, you raised our expectations. So it is the “eaters” voters who changed, merely, the meal remains the same.

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