Cables can confidently reveal that the newly appointed Chief Executive Officer of the Small and Medium Enterprises Development Institute (SMEDI) has terminated a contract awarded to Sanga Civils for the construction of a factory shell at the SMEDI Mponela Enterprises Development Centre in Dowa.
The termination has raised serious questions over the circumstances surrounding the decision, particularly as the project forms part of SMEDI’s broader infrastructure programme aimed at supporting small and medium enterprises through value addition, business incubation and industrial development.
Government planning documents confirm that SMEDI has been implementing a major infrastructure programme at Mponela, including the development of purpose-built facilities and factory-related infrastructure.
Public procurement records also show that SMEDI has previously advertised procurement for construction works involving factory shells and other associated infrastructure.
Cables understands from sources familiar with the matter that Sanga Civils is challenging the termination and has taken the dispute to court, with the contractor reportedly demanding approximately K3.2 billion from SMEDI for alleged breach of contract.
Sources further revealed that the contract was terminated for political reasons and that efforts are underway to identify another contractor allegedly connected to individuals within the ruling Democratic Progressive Party (DPP).
The sources claim that the proposed replacement contractor could benefit from the project following the termination of the existing agreement, raising concerns about whether the process is being used to divert public resources through a politically connected company.
The Mponela facility is intended to contribute to SME development, including value addition and access to production and incubation facilities.
The World Bank has also previously identified the Mponela centre as an important location for SME training and value-addition activities.
Reports indicate that Sanga Civils contract was terminated without following due process followed and Malawians are to pay the contractor their hard earned tax payers money .
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