10/06/2026
ESCOM under fire for Bypassing Local Firm in K12.24bn Transformer Deal
The Electricity Supply Corporation of Malawi (ESCOM) is facing fresh scrutiny after documents emerged suggesting the power utility sought to proceed with a K12.24 billion transformer procurement involving a foreign company while a local supplier had already received regulatory clearance for the contract.
The procurement concerns the supply and delivery of 33 kilovolt (kV) distribution transformers.
Information contained in official documents shows that the Public Procurement and Disposal of Assets Authority (PPDA) had granted a no-objection for Creck Hardware and General Suppliers to undertake the project valued at K12.24 billion.
However, the matter was later referred to the Office of the President and Cabinet (OPC), triggering questions about why a procurement process that had already passed through the country's procurement regulator required further consideration.
A document submitted to President Arthur Peter Mutharika by the Chief Secretary to Government reportedly sought guidance on the transaction.
In a handwritten response, the President questioned whether authorities knew the ownership of the companies involved before directing that the proposed deal should not proceed with Creck Hardware.
The development has raised concerns among observers who argue that local companies should be given a fair opportunity to compete for major government contracts, especially after meeting procurement requirements.
The controversy comes amid another procurement dispute involving ESCOM and the supply of transformers and metering units worth K8.1 billion.
In that procurement, ESCOM reportedly selected Clavic General Suppliers as its preferred bidder despite the company not being the lowest evaluated bidder, contrary to conditions contained in the utility's own bidding documents.
PPDA subsequently rejected Clavic's selection, saying ESCOM had failed to follow its evaluation criteria, which clearly stipulated that the contract should be awarded to the lowest evaluated bidder.
In a March 30, 2026 communication to ESCOM, PPDA Acting Director General Timothy Kalembo instructed the power utility to re-evaluate the procurement process in accordance with Section 62(2) of the Public Procurement and Disposal of Public Assets Act, 2025.
The decision to block the K8.1 billion award while granting a no-objection to Creck Hardware's K12.24 billion transformer contract has fuelled debate about why the latter procurement was later escalated beyond the procurement regulator.
The latest revelations have also emerged against the backdrop of reports that ESCOM is facing questions over plans to award multiple contracts worth about K40 billion for the supply of wooden poles to Safari General Dealers, WL Trading and Uni General Dealers.
According to information circulating within procurement circles, the three companies are expected to share six contracts collectively valued at around K40 billion.
The succession of procurement controversies has intensified scrutiny of ESCOM's procurement systems, with governance advocates questioning whether the utility is consistently adhering to procurement laws and principles of value for money.
Responding to queries on the various procurement processes, ESCOM Chief Public Relations and Communications Officer Pilirani Phiri said it would be premature for the utility to comment as the transactions remain active and confidential.
He said the procurement processes were still underway and that no notices of award had been issued.
ESCOM has in recent years faced several procurement-related controversies, including investigations into major contracts and allegations of procedural irregularities.
