THE US$100 million TFM Holdings contract should not have been terminated via the ‘convenience’ clause because its implication is that government is in breach of contractual obligations and would therefore lose millions of dollars in compensation to the contractor, the Parliamentary Public Accounts Committee (PAC) has warned.
And Prof Lackson Kasonka was yesterday at pains to explain why he had terminated the TFM contract using a weak clause whose implication was that government was in breach of its contractual obligations and would therefore have to pay.
The PAC has said government’s termination of the TFM contract to construct prefabricated hospitals using the convenience clause should have been avoided because the clause was weak should the contractor sue the State.
The Committee has hence chastised Prof Kasonka for terminating the US$100 million TFM Holdings contract to construct via the ‘for convenience’ clause whose cost implication would be gigantic.
Prof Kasonka had claimed that the Ministry of Health had valid reasons to terminate the TFM contract after the contractor had allegedly failed to provide securities bonds in the stipulated period of the contract.
The PAC stated that it was a breach of contractual obligations for the Ministry of Health to terminate the contract using what it called a weak clause in the contract which would see government pay a lot of money to the contractor if litigated.
Prof Kasonka laboured to respond to the various questions claiming that the contract was terminated because of policy change after the UPND formed government in August 2021.
The committee wondered why Prof Kasonka kept insisting that he was not aware about the signing of the contract until a month later when there had been back-to-back correspondence between the contractor and the Ministry of Health.
PAC argued that it was not possible for Prof Kasonka to have been ignorant about the contract because the deal was approved by both the Attorney General Mulilo Kabesha and the Secretary to the Treasury Felix Nkulukusa.
“How could such a big contract involving millions of dollars be kept a secret? Was it a spiritual contract that is very difficult to understand, especially that the signing of such contacts are preceded with processes like signing ceremonies with witnesses,” they said.
But Prof Kasonga kept on claiming that the contract was sneaked into the Ministry of Health by some ministry officials and that TFM had tricked some officers at the ministry to sign and make commitments that were reckless that would cost the country a lot of money.
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