Africa-Press – Zambia. THAT government has finally decided to terminate the US$100 million TFM Holding contract for its own convenience is confirmation that the contract was clean and devoid of any form of corruption, Mcebisi Mlonzi, the chairman and chief executive officer of TFM Holdings has said.
And the termination, at government’s convenience, of the US$100 million TFM Holdings contract for the construction of prefabricated hospitals is going to cost the Treasury a whopping US$40 million in compensation, the terms and conditions of the contract so dictate.
Attorney General Mulilo Kabesha had warned the Ministry of Health that the termination of the TFM Holding contract for government’s convenience was going to cost the State colossal sums of money in compensation.
According to the terms and conditions, the US$100 million contract which was signed by the Ministry of Health in May this year, Government is bound to compensate TFM Holding about 40 percent of the total contract for cancelling to contract on its convenience.
Section VII subsection 56.2 on termination of the contract states thus: “The employer or contractor may terminate the contract if the other party causes a fundamental breach of the contract.
Mr Mlonzi has explained that in this case, the Ministry of Health has committed a fundamental breach by terminating the contract for its own convenience.
Subsection 58.2 of Section VII of the contract states that: “If the contract is terminated for the employer’s (government) convenience or because of a fundamental breach of contract by the employer, the project manager shall issue certificate for the value of the work done, materials ordered and other auxiliary costs which in this case shall amount to 40 percent of the cost of the contract.
Mr Mlonzi, who is owner of the South African company that was awarded the US$100 million contract for the construction of prefabricated hospitals says the duly awarded contract to his company was only disowned after Health Minister Sylvia Masebo allegedly demanded for a bribe in cash and a luxurious motor vehicle.
He says it was shocking that the Ministry of Health decided to inform his company about the termination of the contract through social media instead of the procedural and normal communication channels in serious matters such as cancelling a contract of the US$100 million magnitude.
He has disclosed that TFM management received the letter via social media (WhatsApp) sent by a Mr Kalangwa who is said to be from the Ministry of Health communication department.
Mr Mlonzi says management of TFM is wondering why the government of Zambia decided to communicate a matter of confidentiality such as termination of a contract via social media because all communications on the project had previously been done through the Permanent Secretary or procurement department.
He explained that it had been traditional etiquette that all communications about the US$100 million contract had been through established government channels and that the representatives of TFM Holdings would pick up hard copies of the correspondence from the offices of the Permanent Secretary.
“It is surprising that the client opted to send such a serious letter bordering on confidentiality on project matters to social media. We saw it around mid-night of Friday, 25th November 2022. As regards the content, it is the client’s option to terminate for convenience. It is provided for and our role now is to give them costs. It will be a lot of money considering that this is a turnkey project of which the largest cost is on equipment and steel prefabrication contracts. We will give the client the costs and pay as provided for in the contract,” Mr Mlonzi said.
He stated that the contract although initiated during the PF administration, the project was duly validated by Ms Masebo who at the time had adopted it because according to her, he had wanted to manage the project on behalf of Zambians.
Mr Mlonzi is insisting that TFM Holdings hosted Ms Masebo in Sandton, Johannesburg where she had gone to persuade management to honour her with a luxurious motor vehicle and cash money before she could sanction the contract.
“This termination will cost government and the Zambian people US$40 million on account of the TFM refusing to bribe the minister. The Attorney General had adequately advised Ms Masebo and the Permanent Secretary at the Ministry of Health but it seems his legal advice has been defied so we have no option but to demand for what is due to TFM,” Mr Mlonzi said.
For More News And Analysis About Zambia Follow Africa-Press
