March 5, 2015 By Jariatu S. Bangura
Chairman of the Public Account Committee in parliament yesterday revealed that four ambulances which cost US$284,000 are still in Dubai awaiting to be air-freighted to Freetown since August last year even though full payment had been made to Kingdom Security and Logistic Services – the private contractor hired to procure them on behalf of the government of Sierra Leone.
Hon. Chernoh R.M. Bah, who doubles as Deputy Speaker of Parliament, blamed former Permanent Secretary in the Health Ministry, Sadiq Kapuwa, for failure to make adequate moves to put pressure on the Sierra Leone Embassy in Dubai to expedite the process of shipping the ambulances to Freetown.
According to the Deputy Auditor General, Tamba Momoh, records such as procurement and evaluation committee minutes and matrixes disclosed that Kingdom Security and Logistics Services was solely contracted to procure the ambulances, apparently in violation of procurement rules, while the contract agreement was not submitted for audit review.
He said Clause 16.1 of the General Condition of Contract requires an advance payment of 60% within 30 days of the signing of the contract to be followed by the final percentage within 45 days of the acceptance of delivery, but that the final payment of 40% was paid even before the ambulances were tested or examined on delivery, also in flagrant violation of the rules.
Momoh explained that even though the contract was between the Ministry of Health and Kingdom Security and Logistic Services, auditors realised that payments were made to a foreign bank account belonging to Uniworld General Trading LLC, who were not party to the agreement/contract as there was no evidence to show that Uniworld was party to the contract.
He further maintained that owing to the incompleteness and vagueness of the contract, relevant clauses related to the delivery and transportation of the ambulances were excluded from the contract agreement, adding that the anomaly resulted to payment of an additional amount of US$360,000, over the contract value of US$1,050,000.
According to Momoh, their findings revealed that the said amount was paid to the same supplier to air-freight 17 out of 20 ambulances, and that upon review of the tally card maintained at the Central Medical Stores, it was observed that only 16 ambulances were air-freight and delivered.
He said that was a clear indication that the agreement was badly drawn in a bid to prevent the payment of 10% NRA withholding tax levied on foreign suppliers.
In his response, Procurement Officer at the Ministry of Health, Ibrahim Brima Swaray, conceded that 60% payment should have been made within 30 days with the final payment made after delivery of supply, but because the ambulances were needed urgently due to the high death rate among Ebola patients, the contract was signed and payment promptly made.
He said the condition of payment for release of the funds to the supplier was stipulated by the Emergency Operations Centre (now renamed National Ebola Response Centre), adding that because many suppliers had increased their price rate only Kingdom Security and Logistics Security was available at lower cost.
Mohamed Paul Kamara of Kingdom Security and Logistics said the contract award was through Free on Board (FOB) transactions, noting that one Mr. Kawusu Kebbey from the Ministry of Finance had to travel to Dubai to air-freight the ambulances because a Nigerian airline had failed to airlift the cargo.
He said there was not enough space to accommodate 17 ambulances, thus 16 ambulances were airlifted to Freetown, for which an additional amount of US$388,000 was paid, including the fueling of the flight, which document was given to KPMG for auditing.
He said when the ambulances arrived they were straightaway taken to the Medical Stores by the Deputy Minister of Health and Sanitation, Ms. Madina Rahman and Deputy Minister of Transport and Aviation, Brima Mansaray .
He said Ministry of Finance officials did not tell him to pay withholding tax as it was not part of the contract – which was an FOB transaction.
However, Hon. Bah maintained that in a letter or report written by Mr. Kebbey on the issue, the latter stated that although 20 ambulances were procured only five had valid life supporting machines.
“Inspections were not made by the technical team as it was not necessary whether a trap was set or a bomb has been placed there to kill people, and it was distributed without checking them,” Hon. Bah said in an apparent reference to lapses in procurement rules.
The deputy speaker argued that an FOB transaction does not preclude the payment of withholding tax, and urged that the payment must be made and the remaining ambulances shipped into the country.
On his part, erstwhile Permanent Secretary in the Ministry of Health, Sadiq Kapuwa, said in August last year the ministry had say in the signatories process as it was engulfed in numerous internal problem he said he was not at liberty to disclose at the public hearing.
He said his role was mere purse controller and not a vote controller as he only signed documents and cheques with orders from the minister. He said the ministry had requested Kingdom Security and Logistics to pay the withholding tax of US$52,500, but the company failed to comply.
The hearing is due to continue on Friday, 6 March when Health for All Coalition boss, Charles Mambu, is expected to face the committee.