President Michael Sata has suspended Zambia Railways Limited (ZRL) chief executive officer Professor Clive Chirwa pending investigations by the Anti-corruption Commission on allegations of corruption levelled against him.

This is contained in a letter made available to the media by special Assistant for press and public relations George Chellah.

In his letter to Prof. Chirwa dated April 22, 2013, President Sata confirmed that he has suspended the ZRL chief executive officer due to several corruption allegations levelled against him.

“… I am suspending you from duty and you will be on half pay; and as part of other conditions you will have to vacate the lodge and wait in the Zambia Railways Limited accommodation until the matter is completed,” read President Sata’s letter in part.

“By copy of this letter the Anti-corruption Commission has been instructed to carry out full investigations concerning the allegations of corruption.”

And President Sata has with immediate effect appointed Ministry of Transport, Works, Supply and Communications permanent secretary Dr Muyenga Atanga to take charge of Zambia Railways Limited.

“…this will require you to take charge of the Rail Line including the Inter Mine Rail, which is so critical to the running of the mining sector,” directed the Head of State.

The PF Government reiterates its commitment to revamping the railway network that results in a rail system which will create the necessary economic drive.

Zambia Railways Managing Director Clive Chirwa has dismissed reports that he has been fired.

In an interview, Professor Chirwa laughed off rumours circulating on social media that he has been fired and replaced with Transport Permanent Secretary Dr. Muyenga Atanga.

“It’s all nonsense. It is not true. I spoke with the Principal a while ago and I was assured that my job was safe. I have heard the rumours but it is not true,” Professor Chirwa said by phone.

“I remain CEO of the company,” he said.

Professor Chirwa said he is happy that his job is safe and that he is interested in continuing with his vision of turning around the railway firm.
Meanwhile, Transparency International Zambia has demanded that Zambia Railways Managing Director Clive Chirwa steps aside to pave way for investigations.

[pullquote]“It’s all nonsense. It is not true. I spoke with the Principal a while ago and I was assured that my job was safe. I have heard the rumours but it is not true,” Professor Chirwa said by phone[/pullquote].

Meanwhile, TIZ President Lee Habasonda says it has received the news of the happenings at Zambia Railways with utter disgust.

Mr. Habasonda says it will not be fair that Professor Chirwa continues in office when he is at the centre of the allegations of impropriety raised by the dissolved Board.

He further demanded that President Sata as the appointing authority should act expeditiously on this matter and restore confidence in the programme of revamping Zambia Railways Ltd.

Mr. Habasonda said it is also important that President Sata learns lessons from this episode by not appointments Chief Executives of Parastatals through State House.

‘It is evident in the case of Prof Clive Chirwa that he feels that he is only answerable to the appointing authority who in this case is not the Board but the Republican President. President Sata should in part, shoulder the blame for the mess obtaining at Zambia Railways,” Mr. Habasonda said.
He said the accusations against Prof. Chirwa and his counter accusations against the dissolved Board are unacceptable.

Mr. Habasonda said the accusations and counter accusations bear the hallmark of a breakdown in corporate governance and a sad focus on personal benefits rather than public interest.

He said his organisation is on record having condemned the abuse of authority and resources during the period of the concession run by the Railway Systems of Zambia.

The TIZ President said it seems that this trend of using public assets for personal aggrandisement continues unabated.

Mr. Habasonda says TIZ demands a full investigation of all allegations of corruption including abuse of authority, conducted and complemented with a forensic audit whose results should be made public.

“TIZ wishes to emphasise that the $120million Eurobond, which is earmarked for ZRL, stands at a risk if the accusations either way are proved right. This is because the $120million is not a grant but a loan which will undoubtedly be recovered from all citizens and residents in Zambia who pay tax. These funds should therefore not be subjected to risky investments and unsustainable lavish spending- these funds should be employed in reviving the railway systems.”

“We deplore what seems to be a calculated move of turning Zambia Railways Limited into a cash cow serving the interests of a few people. It is preposterous for Prof. Chirwa can demand for such a colossal amount of salary as KR248 000 a month in a country where others live on approximately one dollar per day,” he said.

“We also find it outrageous that the Board had 28 board meetings from January to March in 2013 spending over KR400 000 which is an allocation for Board meetings for one year. It is clear that in the final analysis it is the poor people who will bear the brunt of such wanton greed and disregard for good corporate governance.”

He added, “We challenge other public sector Boards to exercise their fiduciary responsibilities with the utmost care and ensure prudence in the utilisation of public funds.”

Transaparency International Zambia (TIZ) has demanded that Zambia Railways Limited (ZRL) Managing Director Prof. Clive Chirwa should step steps aside in order to allow investigations to remain objective and independent. In a statement released to the media and signed by Chapter President Lee Habasonda, TIZ said that it will not be fair that Pro Chirwa continues in office when he is at the centre of the allegations of impropriety raised by the dissolved Board.

TIZ also said that Republican President. President Sata should in part, shoulder the blame for the mess obtaining at Zambia Railways.

Below is the full statement

Monday, 22nd April, 2013
For Immediate Release
News Article

DEVELOPMENTS AT ZAMBIA RAILWAYS LIMITED

Transparency International Zambia has received the news of the happenings at Zambia Railways with utter disgust. The accusations against the Managing Director Prof. Clive Chirwa and his counter accusations against the dissolved Board are unacceptable.

These accusations and counter accusations bear the hallmark of a breakdown in corporate governance and a sad focus on personal benefits rather than public interest.

TIZ is on record having condemned the abuse of authority and resources during the period of the concession run by the Railway Systems of Zambia. It seems that this trend of using public assets for personal aggrandisement continues unabated.

TIZ demands a full investigation of all allegations of corruption including abuse of authority, conducted and complemented with a forensic audit whose results should be made public.

In order to ensure that these investigations remain objective and independent, we demand that Prof. Clive Chirwa steps aside for the duration of the investigation. It will not be fair that he continues in office when he is at the centre of the allegations of impropriety raised by the dissolved Board.

President Sata as the appointing authority should act expeditiously on this matter and restore confidence in the programme of revamping Zambia Railways Ltd. It is also important that President Sata learns lessons from this episode, namely that appointments of Chief Executives of Parastatals should not be done through State House but should be left to the respective Boards of Directors.

It is evident in the case of Prof Clive Chirwa that he feels that he is only answerable to the appointing authority who in this case is not the Board but the Republican President. President Sata should in part, shoulder the blame for the mess obtaining at Zambia Railways.

TIZ wishes to emphasise that the $120million Eurobond, which is earmarked for ZRL, stands at a risk if the accusations either way are proved right. This is because the $120million is not a grant but a loan which will undoubtedly be recovered from all citizens and residents in Zambia who pay tax.

These funds should therefore not be subjected to risky investments and unsustainable lavish spending- these funds should be employed in reviving the railway systems. We deplore what seems to be a calculated move of turning Zambia Railways Limited into a cash cow serving the interests of a few people.

It is preposterous for Prof. Chirwa can demand for such a colossal amount of salary as KR248 000 a month in a country where others live on approximately one dollar per day.

We also find it outrageous that the Board had 28 board meetings from January to March in 2013 spending over KR400 000 which is an allocation for Board meetings for one year. It is clear that in the final analysis it is the poor people who will bear the brunt of such wanton greed and disregard for good corporate governance. We challenge other public sector Boards to exercise their fiduciary responsibilities with the utmost care and ensure prudence in the utilisation of public funds.

Lee Habasonda
Chapter President

Zambia Railways Managing Director Prof. Clive Chirwa says there is nothing irregular about his salary demands and other hefty allowances.

Prof. Chirwa said the K140 million salary per month and the K38 million rentals on his upmarket villa at Fallsway Apartment is nothing for a Chief Executive Officer of his stature.

“This is nothing, infact there are some many people staying there (Fallsway Villas), even Ministers, Permanent Secretaries, NGO leaders, they are all there,” Prof. Chirwa said.

He revealed that it was government that offered to take him to Fallsway Apartment when he was recalled from the UK.

“I didn’t take myself there. It was government that looked for that apartment for me and the board was asking for tenancy agreement but there is no tenancy agreement because the place is like a lodge, you pay per night,” Prof. Chirwa said.

[pullquote]“This is nothing, infact there are some many people staying there (Fallsway Villas), even Ministers, Permanent Secretaries, NGO leaders, they are all there,” Prof. Chirwa said.[/pullquote]

He was speaking on Sunday Interview television programme on ZNBC after a dramatic day which saw the board dissolved shortly after it issued a statement accusing him of gross mismanagement and making “obscene” executive demands.

But Prof. Chirwa said the demands he made to the board were part of the negotiating tool that his lawyers drafted for him before taking up the appointment.

“Those were my demands as advised by my lawyers because when I was offered the job, I had to go and consult my lawyers and that was basically my negotiating tool which the lawyers came up with.”

On demands to be offered 25 percent of ZRL after serving five years as CEO, Prof Chirwa said he believes he is entitled to a share option in the company as a Zambian.

“There is nothing irregular because in the turnaround plan for the company, we want to offer shares to the public through the stock exchange and I believe as CEO I should be offered a certain percentage to buy.”

He revealed that he differed with the dissolved board after it started demanding to be paid huge sitting allowances.

“We differed because they started pressurizing the Finance Director for allowances for merely seeing the Minister for five minutes. They had 25 board meeting in three months. That’s madness. I refused to have the Director of Finance release payments for those meetings because some of them were not even minuted,” he said.

[pullquote]“Am ready to fly back to the UK if am pushed. I came here to help and am not demanding a lot, if anything I’m the one losing much by being in Zambia.”[/pullquote]

He said the executive pay demands are not irregular because he was making two million pounds per year before he came to Zambia to take up the position of CEO of Zambia Railways.

“Am ready to fly back to the UK if am pushed. I came here to help and am not demanding a lot, if anything I’m the one losing much by being in Zambia.”

Prof. Chirwa dismissed allegations that he had refused to move to Kabwe saying the house is not yet ready. He explained that he was not the only one staying at Fallsway saying there were Ministers, Permanent Secretaries and other CEO.

On allegations that he tried to engage Clavel Incorporated, the firm he owns with his wife and two children to train ZRL engineers, Prof. Chirwa said the matter was closed after the board objected citing procurement rules.

“I dropped those demands after they said no. It’s not an issue anymore but what i wanted for Clavel to come and train the workers here because of IPR (Intellectual Property Rights) issues and that’s not corruption,” he said.