KABWE Central MP Tutwa Ngulube has accused Kabwe Municipal Council of fraud by engaging a debt collector outside the Zambia Public Procurement Authority (ZPPA) Act, and forcing defaulters to pay a 10 surcharge to the same company.
The council is said to be involved in fraudulent activities in which it is alleged to have contracted Nshinda Debt Collectors without following any tender procedure and has pounced on defaulters without any warrant of distress and are collecting 10 percent more from each property owner that owes the local authority.
But Town Clerk Ronald Daka has maintained that there was nothing irregular about the whole debt collection exercise, saying the company contracted to collect K10 million owed to the council did not need any tendering process because it was not a big contract.
Mr. Daka said the local authority had not flouted any procedure, noting those who had failed to pay must face the debt collectors and incur the surcharge as the council will not pay anything to Nshinda for their failure to meet their obligation.
“For a long time now, our council has been cited in the Auditor General’s report as having failed to collect the debt we are owed and there is nothing wrong to engage Nshinda to get our money because at the end of the day, we have to provide a service to the people.
“The council will not spend anything. The company is just assisting the council because their costs are catered for through a 10 percent surcharge from defaulters.
“The procedure for contracting a debt collector is very straight-forward. It is not something we must be talking about any tender.
“Normal rules of debt collection mean that the director of finance will identify four companies and then recommends one and based on that, management makes a decision and that becomes our debt collector,” Mr. Daka said
But Mr. Ngulube reacted angrily to such assertions saying the council must come out clean on the matter as he had written to the Town Clerk but that the local authority had decided to ignore his letter.
Mr. Ngulube said there was no justification in Mr. Daka’s explanation because no local authority was exempted from the tender procedure and challenged Mr. Daka to explain what he understood by the provision of the Zambia Public Procurement Authority (ZPPA) Act which states that any project above K50, 000 must be tendered for.
“Did they follow the tender procedure? How will Nshinda collect K10 million without any tender procedure? No one can prevent the council form collecting its debt but that should be done legally and there is no legality in single-sourcing a contractor by any local authority. Who told Nshinda to be collecting their 10 percent from each property owner? In total, the company will collect K11 million and someone has the guts to say there was no need for tendering?
“How can they single-source services for a Government institution? There is need for investigative wings to investigate this company so that we know who is really behind it. What the council is engaged in is fraud and I will not condone it,” Mr. Ngulube warned.
He said the council was treading on dangerous ground for not only disregarding tender procedures, but also engaging in fraudulent activities.
“It is either there is a court order which compels property owners to pay the surcharge or not and in this case, there is no court order and whatever Nshinda is getting from property owners is illegal. People are complaining and we will not sit idle and allow this to continue. I wrote to them but up to now, they have failed to clarify this issue,” he said.
According to records at PACRA, Nshinda Debt Collectors are owned by Ishback Chituta, Mbita Chituta Sikazwe, and Eluid Lupiya.