Sunday, May 9, 2021

Ministry of Trade leased P60m office block without PPADB approval

Just like the Ministry of Defense and Security before it, the Ministry of Trade and Industry deliberately ignored and disregarded clearly laid out down rules and procedures that govern public procurement when it secured the office block that houses its headquarters at the central business district (CBD).

The latest Auditor General’s report reveals how the Ministerial Tender Committee (MTC) failed to adhere to expenditure limits set by the Public Procurement and Asset Disposal Board (PPADB) when it signed a lease agreement with the developer of the office block that houses the Ministry of Trade head offices at the CBD.

Official documents shows that the Ministry procured a lease with the developer in December 2012 for a five year period ending November 2017 at a monthly rental of P1, 013, 070. The total rental for the five year period amounts to P60, 784, 200 which is beyond the expenditure threshold of P25, 000, 000 appropriate for committees as predetermined by the PPADB. A study of official documentation relating to the lease has since indicated that in 2011, the Ministry of Trade had determined that it was essential for its headquarters and all its five departments to be housed in one office block as a way of reducing administrative costs.

In March 2011, officers from the Ministry of Trade set out in search of suitable accommodation and identified an office block in the CDB after recommendations from the Ministry of Lands and Housing. However in August of the same year, the Ministry of Trade withdrew its earlier submission before the Ministry of Housing could even respond. The withdrawal was made in favour of another office block, also located within CBD.

Sunday Standard understands that in 2012 the PPADB made a last minute enquiry into the matter, but hit a brick wall as the Ministry of Traded had already signed an agreement with the developer of its preferred office block. The PPADB reportedly instituted an audit to determine circumstances surrounding the multi-million Pula agreement.

“The audit found that in adjudicating over this tender, the Ministerial Tender Committee failed in its duty to adhere to its expenditure limits and to advise the Ministry, as the procuring entity, to refer to the matter to the PPADB as the appropriate level of approval for the expenditure involved,” notes the Auditor General in its annual report.

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