By GIDEON NYENDWA
It has been revealed that Lamasat International Limited had defrauded the Zambian government of about US$4 million by submitting a bond document that could not be honoured in a contract they had entered with the Ministry of Agriculture to construct an irrigation system at Momboshi dam.
The Public Accounts Committee (PAC) committee heard that the Ministry of Agriculture had entered into a construct with Lamasat for the construction of an irrigation system at Momboshi dam and bond to get an upfront payment of $3.9 million for them to set up camp and work in 2016 but the works have not commenced up to now.
The committee heard that the contract with Lamasat was cancelled upon failure to perform but the bond could not be honored by the guarantor who was Innovate General Insurance who Lamasat had put forward.
The Ministry of Agriculture submitted that it had been trying to engage the Pensions Issuance Authority to make sure Innovate General Insurance honors the bond but nothing came of it.
The ministry also stated that the matter was reported to the police and was currently in court.
The committee queried the ministry to find out why they had not gone for the contractor who went away with the money instead of wasting time pursuing the guarantor.
For the last three days, the Ministry of Agriculture had been appearing before PAC from which many procurement concerns were raised including the adoption by the Ministry the method of procuring fertilizer vial single sourcing.
Yesterday, the Ministry of Agriculture officials failed to answer several question from PAC including why government had been defrauded US$4 million by Lamsat.
The committee also heard that Lamasat offered that they would supply the ministry with materials needed for that project as a form of payment for the money that was lost which they were still considering.
The committee gave a position that Lamasat should pay back the money because the offer they gave was not admissible as they were the ones who were evaluating the prices of the materials, they had offered which could not reflect the actual prices.
“The contractor must pay back the money without fail, this is the people’s money they are playing with, with such carelessness in handling finances that is why this county has failed to develop, what happened was pure fraud,” they said.
The committee further proposed a debt swap between the government and Lamasat because government on the other hand owes Lamasat a lot of money of money in other ministries.
