Monday, November 28, 2022

Crisis over gov’t deal with Jamali’s company

The Public Procurement and Asset Disposal Board (PPADB) had rejected the P33 million lease agreement between a company owned by land mogul Sayed Jamali and the Ministry of Defence, Justice and Security; secret documents passed to the Sunday Standard have revealed.

The report states that both the Ministry of Defence Justice and Security and the Ministry of Lands and Housing tasked with negotiating the lease with Varsha Enterprises ÔÇô a company owned by Jamali – flouted PPADB tendering procedures.

The confidential report, compiled by PPADB, suggested that the process for acquisition of office space to house the headquarters of the ministry of Defence, Justice and Security should be started afresh.

It emerged during the Public Accounts Committee of Parliament that government wanted out of the agreement after realizing that PPADB procedures had been flouted, but were bound by the agreement they signed with Jamali’s company.

Permanent Secretary in the Ministry of Defence, Justice and Security, Seagakweng Tsiane, also owned up to her mistake though she was trying to distance herself from a lease agreement between the landlord and the Ministry of Lands and Housing.

She informed the committee that the lease has caused many problems after it was signed in 2012. She said that the landlord had already approached them demanding P19 million from them though they had not yet occupied the building. She said they are unable to pay the amount because they don’t have money.

According to the confidential report, the ministry of Defence, Justice and Security first made a request to the Ministerial Tender Committee for approval of the building’s rental charge on the 5th of October last year.

Barely a few days later on October 10th and before receiving feedback from the Ministerial Tender Committee, officials at the ministry of Defence, Justice and Security instructed the Ministry of Lands and Housing to lead negotiations with Varsha Enterprises.

Five days later on 15th October the Ministerial Tender Committee was ready with its feedback and preferred the matter to be referred to PPADB since the lease amount was above the committee’s threshold. Notwithstanding the advice the request was not re-directed to PPADB and instead on the 1st of November 2012 the Ministry of Defence, Justice and Security wrote again to the Ministerial Tender Committee and, strangely, the request was approved on the same day.

On the 9th November 2012 Permanent Secretary in the Ministry of Defence wrote to the Permanent Secretary Ministry of Lands and Housing, indicating the Ministerial Tender Committee had approved the lease rental negotiations and sough assistance in the negotiations.

“While the expectation would have been that the lease negotiations led by Ministry of Land and Housing would have started anytime from the 9th of November 2012, the board noted that the head of lease terms were signed by Varsha Enterprises on the 6th of November. In the head of lease terms the commencement date is also stated as 1st October 2012 (a date which comes before the ministerial tender committee even approved the negotiations),” the report reads in part. This is despite the fact that the ministry had not taken occupation of the offices and the building was still undergoing partitioning.

“Through its letter of 19th November 2012,to the ministry of Defence, Justice and Security the department of land already indicated that the memorandum of agreement of lease had already been forwarded to the landlord for signing…This was done even before the final approval of either the ministerial tender committee or the PPADB,” it further states.

The board also stated that the ministry of Defence, Justice and Security breached procedures in identifying Varsha’s CBD offices for rent.

‘It appears that they did not search the market for possible properties that could meet their requirements before identifying Varsha’s Enterprise property.’Infact as a formality following approval of to negotiate with Varsha Enterprises,

‘A joint inspection to establish properties under construction within the CBD at the time was only carried out on the 28th March 2012′.

Also, an ITT required for vetting was never obtained for permission for the single sourcing to lease Jamali’s property. The ministerial tender committee had directed that the ITT be submitted.
The observation made in the tender document is that contrary to rules, the ministry of Justice, Defence and Security made a random selection of Varsha’s property and ‘did not demonstrate any urgency in acquiring the identified property in order to protect life or the environment’ for single sourcing of leasing the property. See story on page 4)

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