By Fatou Krubally
The National Water and Electricity Company (NAWEC) faced intense parliamentary scrutiny yesterday over payments totaling $647,900 to international consultants that were made without withholding tax deductions.
The issue was raised during a session of the Standing Committee on Public Enterprises, which is reviewing NAWEC’s ECOREAP, GERMP, and GEAP projects.
Auditors reported that the payments were made without accounting for withholding tax due to an initial oversight in contract terms.
“At the time these contracts were signed, withholding tax was not included in the cost,” a NAWEC official said. “It was only after implementation that the Ministry of Finance advised us to deduct it. Retrospective deduction was not feasible, but all future contracts now include withholding tax provisions.”
The session also examined allowances paid to project staff. Some payments were later suspended following objections from the African Development Bank (AfDB), which partially financed the projects. The AfDB recommended that only staff directly contributing to the projects receive performance-based allowances.
NAWEC subsequently revised the beneficiary list, limiting payments to core staff actively involved in project implementation. Committee members expressed concern over the decision not to recover allowances already paid to staff who were later removed from the approved list.
NAWEC defended its position, noting that the initial payments were approved by the AfDB and reclaiming funds retrospectively posed legal and logistical challenges. “Those initially paid were contributing to the projects at the time, and the bank approved the initial list,” a company official said.
Further scrutiny focused on delays in electrification projects covering 147 villages. Officials attributed the slow pace to contractors’ limited deployment capacity, seasonal factors, and compensation disputes with landowners, all of which have since been resolved.
Despite these explanations, the committee stressed the need for transparency and accountability in project disbursements. Parliamentarians requested copies of the original and revised staff allowance lists, along with evidence of contractor deductions, to ensure full compliance with audit recommendations.
NAWEC officials pledged full cooperation and confirmed that all reforms recommended by auditors have been implemented. They assured the committee that lessons from these lapses would guide future contracts and project oversight.