Parliament Scrutinizes Samoa Land Corporation Procurement Processes

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Dealings with ‘middle man company’ allegedly reflect ‘corrupt practices’

By Sophie Budvietas

APIA, Samoa (Samoa Observer, Dec. 22, 2013) – The dealings between the Samoa Land Corporation (SLC) and a "middle-man company" involving millions of tala have been questioned by Parliament.

The questions are raised in a Report by the Officers of Parliament Committee (OPC), which say the decision by the Corporation to continue to work with the company over a long period of time "reflects corrupt practises."

Such "practises," according to the Committee, were used at a time when the Corporation’s state of finances were poor, failing to meet its estimated revenue by $11million.

The concerns are highlighted in the Committee’s report tabled in Parliament last Tuesday. A copy of the report has been obtained by the Sunday Samoan.

The report identifies the "middle man" company as "Seyleck Global Supplies." The Committee’s investigation uncovered that although the company is registered in New Zealand – with the Corporation paying for its services using New Zealand and United States currency – the company, is in fact, owned by a local businessman with a branch at Vaitele.

The Committee tells Parliament that SLC used the services of Seyleck to purchase a "Water drilling rig" which ended up costing the Government $996,142.97 more than what was initially approved by Cabinet.

According to the Report, the price approved by Cabinet for the rig was ST$1,196,067.93.

"It’s valued at ST$1,089,750.78 being the price of the truck plus ST$106,317 for the consultant," a translation of the report reads.

"Or the American currency of US$410,000 for the (Drilling Rig) and US$40,000 for the specialised engineer or (consultant).

"However the total cost of the Drilling Rig and spare parts was ST$2,192,210.90 from the ST$1,899,968.10 expended on the drilling rig, plus duty of ST$292,242.80. "Which means that a sum of ST$996,142.97 or 83 per cent had exceeded the total price paid for the truck, than that approved by Cabinet.

"This additional price of ST$996,142,97 should have been referred back to either Cabinet or the Tenders Board for consideration and approval.

"However the investigations of the Committee have proven that no additional request was submitted to either Cabinet or the Tenders Board for approval of these additional costs for the payment of the whole price of the drilling rig.

"This action is not in order with the asset purchasing policy especially of major assets, of Government thereby reflecting complete ignorance of the Corporation of these policies."

The Committee says SLC did not follow the Government’s policies for the Procurement of Assets.

"The Committee believes the Corporation did no adhere to the above policies given its continuous procurement of fixed assets through the means it knew were contrary to Government’s policies," the report reads.

"The Committee had also discovered that SGS and the Corporation have for years been working together beginning from the time prior to the year under investigation and continued for years prior to the period being investigated.

"Proof of this evidence is the payment of an amount of about $T3.5 million to SGS company, from July 2007-December 2008, for fixed assets including motor cars, computer machines, huge machines and machines for the golf course, three motor cars, computer set, heavy equipment, golf equipment."

According to the report the Committee had also discovered that another sum of money of about ST$986,449.09 was paid in 2010 to the same company for the purchase of other fixed assets.

"That included heavy equipment, consultations, machine repairs for the golf course and other, heavy machines, surveying fees & expenses, repairs and maintenance of heavy machines and golf course, repair work and others, that were carried out in Samoa and should be paid in Samoa where there is located a branch of the SGS, using the Samoan currency (ST$) for the sake of VAGST for our government.

"Unfortunately all these services were paid in the NZ and US currencies. The Committee had also asked if there were really no people in Samoa to do repair work so to avoid using this company from New Zealand.

"According to the evidence of the Corporation, the said repair works were to do with the parts of the machines imported from overseas."

The Report also questioned a number of areas within the Corporation.

"It is clear from the audit that the Corporation’s Cash Flow has greatly suffered due to its implementation of projects that it could not afford financially. Most of these projects cost millions of Tālās.”

Among these millions of tala was money used to purchase a brand new Toyota Lexus for the Minister of Natural Resources and Environment at the time, Faumuina Tiatia Liuga, which cost $399,105.90 instead of $200,000 as it was indicated in Ministry’s budget.

The Report from OPC follows the report of the Controller and Chief Auditor to the Legislative Assembly for the period ended 30 June 2010. Leaked to the Samoa Observer and published in full earlier this year, the report highlights abuse and "corrupt practises" within the running of government Ministries and Corporations.

Twelve months ago, Parliament referred the Chief Auditor’s Report to The Officers of Parliament Committee for an investigation.

On Tuesday, the Committee tabled its report before Parliament. Chaired by Muagututagata Peter Ah Him, other committee members include Taefu Lemi Taefu (HRPP), Agafili Eteuati Tolovaa (HRPP), Aeau Dr. Peniamina Levaiseeta (Tautua), Papali’itele Niko Lee Hang (HRPP), Motuoopua’a Dr. Aisoli Vaai (Tautua) and Toeolesulusulu Cedric Schuster (Tautua).

Written in Samoan, the Samoa Observer has been publishing the report since Friday.

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