GOV’T AGREEMENT WITH MILAI UNDER SPOTLIGHT

The Public Accounts Committee (PAC) has voiced its concerns over the Government’s Public Private Partnership Agreement (PPPA) with Milai Ltd.

On Monday 22nd of November, the Chairman of the Public Accounts Committee (PAC), Matai Seremaiah, attempted to table the report of the 2021 enquiries of the Committee in Parliament only to be blocked by an objection from the Government side as to the legality of the tabling.

After the Office of the Attorney General provided advice to the Speaker that there was no legal issue preventing the tabling of the Committee’s report, Seremaiah was finally able to table the report on the morning of Tuesday 23rd of November.

After tabling the enquiry report, Seremaiah then moved a motion for an urgent debate about one of the investigations that was reported on, the Public Private Partnership Agreement (PPPA) with Milai company for the provision of cattle for the Government’s cattle restocking program. This motion was seconded by the Leader of the Opposition, Ralph Regenvanu, who stated in Parliament that an urgent debate was necessary to encourage the Government to reverse a recent Council of Ministers (COM) decision that was going to exacerbate the many irregularities and possible illegalities created by the original agreement. The Government voted against having an urgent debate, essentially stopping the public from hearing about these issues.

In June 2020, the Ministry of Agriculture, Livestock, Forestry, Fisheries and Biodiversity (MALFFB) entered into an agreement with the company Milai Ltd (which owns what used to be the South Santo Cattle Project) for:

1. The purchase of 1,800 cattle per annum at VT45,000 per head plus VAT, and

2. The provision of 200 hectares of land for a “food basket”.

Enquiries into the agreement revealed some issues that according to the PAC, violate the Government Contracts and Tenders Act (GCTA) and its regulations. The issues are as follows;

1. The PPPA was entered into without the prior approval of the Central Tenders Board as required by law,

2. The Agreement was entered into without the prior approval of the Council of Ministers as required by GCTA.

Five months after from the date of the execution of the agreement — in November 2020 — an advice was sought from the State Law Office on the legality of the Agreement. The State Law Office advised that since the agreement had an aggregate value of VT93,150,000 it needed to comply with the GCTA. The PAC is of the view that because it had not had prior approval of the Central Tenders Board (CTB) and the Council of Ministers, this agreement should have been ended from that point and a new arrangement sought which complied with the law.

However, the State Law Office advised that the Ministry should seek the approval of the CTB for a “sole sourcing” arrangement on the basis that the agreement was necessary to address an urgent issue pursuant to Regulation 40 of the GCTA regarding emergency procurement under a State of Emergency. The PAC is of the view that this advice is incorrect and that this procurement is not an emergency procurement in nature. With this advice, the Ministry then requested the CTB to consider the request and approve this procurement. It is important to highlight here that at this stage the agreement was already entered into, contrary to the GCTA. In the same month of November, the COM endorsed the CTB decision and MALFFB and MFEM facilitated the total payment of the agreement of 93,150,000 vatu.

It was revealed to PAC according to the report tabled in Parliament, that upon the expiry of the agreement June 2021, there were still 1079 cattle – well over half the number agreed upon — which had been paid for in full but had not been delivered. Also, none of the other services included in the schedules of the agreement had been implemented – the land for the food basket included. Pursuant to its mandate, PAC then asked the MALFFB to recover and remove all these remaining cattle and deliver them to where they were supposed to be delivered.

After the required 28 days for the Ministry to respond, MALFFB reported back to PAC that Milai did not have sufficient stock to deliver the remaining cattle as per the agreement that had already expired in June of 2021. MALFFB also reported that they were working to sort the matter out with Milai. However, whilst MALFFB officials were trying to “sort the matter out”, COM proceeded to endorse another 2-year agreement to be entered into with Milai for cattle restocking and other services. This despite Milai having failed to fulfil the first agreement and again contrary to the GCTA, which requires the prior approval of the CTB, and despite other companies offering cattle at a cheaper price than Milai.

The GCTA and its regulations exist to ensure that all government contracts are entered into fairly and that the Government gets the best value for public money. When funds are appropriated by the Parliament, it is the responsibility of the expending agency to ensure that the funds are appropriated for what they were appropriated for and according to the laws enacted by Parliament in the interest of all.

The Opposition’s attempt to have these matters raised in debate in Parliament so that the COM could be persuaded to reverse its decision to issue a new contract to Milai was stifled by the Government, who voted not to allow the matter to be publicly discussed.

The Opposition is urging the Government not to enter into any new agreement without following the law, and to consider other options like using the state’s 700 hectares of unused land at the International Forest Plantation in East Santo for development of a food basket among other services.

The PAC will continue its investigation into this matter in January with a public enquiry.

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