HRDC cautions Malawi govt over ‘corrupt’ dialysis clinic operator Fresenius Medical Care

Human Rights Defenders Coalition (HRDC) has said the Anti-Corruption Bureau (ACB) should investigate a dialysis clinic operator Fresenius Medical Care over allegations that the company paid bribes to in several countries to win or retain business including Malawi’s Ministry of Health which offered it a K262 million three-year contract to supply dialysis services to Kamuzu Central Hospital (KCH) in Lilongwe.

Fresenius has ben supplying dialysis unit HRDC chairperson Gift Trapence said the company should be investigated in Malawi following allegations that the US Department of Justice ordered it, in March 2019, to pay a fine of $231 million for violation of provisions of the Foreign Corrupt Practices Act.

Trapence said it is high time that institutions such as Public Procurement and Disposal of Assets Authority (PPDA) before contracting, they should have have due deligence to some of the companies that come to Malawi such as Fresenius Medical Care which admitted that it doled out bribes to officials in 13 countries including Angola, Morocco, Benin, Burkina Faso, Ivory Coast, Gabon, Cameroon, Senegal, Saudi Arabia and also failed to maintain proper internal accounting control.

“Malawians want value for their money,” he said.

On December 15, Ministry of Health officials wrote the PPDA requesting for a ‘no objection’ to award a three-year single-source contract to Fresenius Medical Care at the cost of K262 million.

In the same letter, the ministry also requested for a three-year extension of the company’s contract with Queen Elizabeth Central Hospital (Qech) in Blantyre at the cost of K200 million [R3, 644,942.88] without openly tendering.

PPDA has since rejected the KCH contract proposal on the basis that the tender for the contract should have been open-source but approved the ministry’s request to extend the Qech contract by three more years.

In a letter to the Ministry of Health, dated December 18 2020, PPDA argues—in rejecting the request to expand Fresenius Medical Care’s dialysis service to KCH—that the approach the ministry took did not satisfy any of the conditions for use of the single-source method of procurement, as provided for under Section 37 (9) of the PPD Act.

“The procurement of additional dialysis equipment and supply and delivery of dialysis consumables and related accessories should, therefore, be realised through open means in order for the government of Malawi to realise value for money in the procurement.

“You are kindly advised to conduct fresh procurement proceedings for the supply and delivery of dialysis equipment and services-level agreement for the supply and delivery of consumables and accessories for Kamuzu Central Hospital,” the PPDA letter to the Ministry of Health, which Patrick Nkunika signed, reads.

It is alleged that Fresenius has doled out bribes to officials in the Ministry of Health to get the dialysis deal extension despite even complaints of bad service they offered.

In Morocco, for instance, the department said the company paid bribes through a “sham” commission to a Moroccan state official in order to win contracts to develop dialysis centers at state-owned military hospitals.

The scheme worked by having the commission pay 10 percent of the value of the contract to the official, and the payment would be disguised as a bonus payment to a Fresenius company employee.

In addition to Morocco, Angola and Saudi Arabia, the company also paid bribes in Spain, the Justice Department said

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