‘Tax-dodging’ Chinese firm confirmed as N$343m tender winner

The Ministry of Finance and Public Enterprises’ review panel has supported the decision of the Roads Authority (RA) to award a Chinese company accused of avoiding to pay tax a N$343-million roads tender.

The panel on 28 August said the tender will go to Zhong Mei Engineering Group as decided by the RA.

This is despite evidence pointing to Zhong Mei having circumvented tender requirements and not being in possession of a valid tax good standing certificate issued by the Namibia Revenue Authority (Namra).

This decision was made on Monday last week after the review panel held a hearing, following several objections to the awarding of the tender launched by other bidders.

The RA contracted Zhong Mei Engineering Group this month to build the road between Usakos and Karibib.

“In terms of Section 60 (a) of the Public Procurement Act, through a majority decision the review panel hereby dismissed the review application and hereby confirms the decision of the Road Authority . . ,” the review panel’s order reads.

China Railway Seventh Group objected to the review panel’s decision and insisted it should “correctly apply the evaluation criteria as per its rules”.

According to the company, the RA broke the public procurement law since the reconsideration and standstill period were not complied with.

Other concerns include having a lower bid price (N$306 million) than Zhong Mei.

“The public entity (the RA) shall provide proof of implementation of this order to the procurement policy unit within 30 days from receipt date of this order,” the order further reads.

The tender review panel consists of chairperson Browny Mutrifa, Kandali Iyambo (from NamPower), Michael Gawaseb, Mekondjo Katunga (from the Namibia Institute of Pathology) and Ehrenfried Honga.

Mutrifa, Iyambo and Honga are said to be supporting the recommendation to award the tender to Zhong Mei.

In its findings, the review panel admitted that the RA was supposed to give aggrieved bidders a seven-day grace period, which it did not.

“That, although the act did not intellectually prescribe as to how long the public entity must wait before it awards a procurement contract after it responds to the application for reconsideration.

“It is common cause that the Roads Authority is supposed to give an aggrieved bidder seven days’ grace period for a bidder to apply to the review panel.

“The Roads Authority awarded a contract immediately after it responded to the bidder’s application for reconsideration,” its findings reads.

Zhong Mei has been in the spotlight in recent months after Namra deducted over N$33 million from it’s bank account.

Between 2013 and 2018, the company allegedly paid no tax, despite having made N$1 billion from government projects.

The Namibian has seen a petition by aggrieved bidders addressed to the review panel’s chairperson, dated 1 September, purporting “corruption in the awarding of the tender”.

“We are petitioning to you as the chairperson of the review panel that we are unhappy for the following reasons: We are calling your committee to act professionally, avoid bribes, corruption, nepotism, and conflicts of interest for the benefit of all Namibians,” the petition reads.

The aggrieved bidders have accused the review panel of continuing with its order, despite the tender having been “unfairly awarded”.

“We are appealing to you for the whole process to be cancelled and started afresh, or review the whole process if the advertisement criteria for the tender was changed, inform the public, and we want such information as soon as possible,” the petition reads.

Seven companies applied for the tender.

Apart from Zhong Mei, they are Shandong Luqiao Groupwhich, China Henan International Cooperation Group Co, Unik Construction Engineering, China Jiangxi International, China Civil Engineering Construction Corporation, and China Railway Seventh Group Co.

Mutrifa yesterday said the review panel’s decision is final.

“The review panel does not receive petitions and use it as merit to make decisions on matters before it. And it is correct that this is the final order that was communicated to the parties,” he said.