Angolan Parliament splashes over $43 million on BMWs

The Angolan ruling party, the MPLA, has over the last two years been repeating its promise to keep a watch on the administration, the management of public resources and the well being of Angolans. This article compares the promises with the reality, and shows how the members of parliament have been serving their own interests rather than the interests of the people they supposedly represent.

On 16 June 2010, the National Assembly renegotiated a loan contract with the Banco do Comércio e Indústria (BCI) worth 3.21 billion kwanzas (equivalent to 35.7 million US dollars) for the purchase of 210 cars, the 2010 model of the BMW 535i series. These vehicles, valued at $168.9 thousand each, are for parliamentarians’ use on official business and are to be delivered by the end of the year only. The current budget for 2010, for the acquisition of vehicles for parliamentarians, officials and personnel of the National Assembly, is 4.1 billion kwanzas (equivalent to $45 million).

After being sworn in, following the September 2008 elections, the members of parliament received each a lump sum of 11.2 million kwanzas (equivalent to $150 000 at the day’s exchange rate) for the acquisition of a personal car and other private purposes, at a total cost of $33.9 million. On top of this, the National Assembly’s 2009 budget allocated 693.6 million kwanzas ($7.8 million at the time) for the purchase of 118 vehicles for the parliament’s staff and a further 50 for parliamentarians’ use. On March 27 2009, the National Assembly approved a contract with the dealership of BMW in Angola, Sadasa, to provide an additional 50 cars worth $8.2 million.  The total amount included the purchase of 41 BMW 540i at a price of $179,000 each, and five BMW 550i  for  $189,000 each. These cars  have not been  delivered yet,  though  they were paid for last year. The total cost for the purchase of 256 BMWs is $43.6 million.

In its Budget Expenditure Report of 2009, the National Assembly states to have made payments of 2.3 billion kwanzas (USD $27.8 million at the time) to TCG and 460.3 million kwanzas ($5.3 million) to Sadasa for the parliamentarians. The purchase of these vehicles represents the two main expenditures of the National Assembly in 2009. At the beginning of the current year, the parliament declared an outstanding debt of 282.7 million kwanzas ($3 million) to Sadasa.

The various financial reports on the parliament’s accounts present discrepancies which make it difficult to establish the exact payments made and outstanding debts with certainty.  There was money allocated in the 2009 budget for the National Assembly to purchase the cars, and there was a loan from the bank for the same purpose. Furthermore, the number of cars ordered was subsequently increased and the total cost transferred to the 2010 General State Budget.

Nevertheless, the accounting procedures of the National Assembly are aptly addressed by its own board of management. In its review of the 2009 Budget Expenditure Report, dated June 23 2010, the board stated that:
a)    “There is no inventory of assets, which make the financial statements unreliable.
b)    “The accounting records are not supported by documented evidence, and there is no inventory.”

Three days after a new understanding was reached with the bank, the Speaker of the National Assembly, Paulo Kassoma, made a speech in honour of the Portuguese President, Cavaco Silva. In the speech Kassoma referred to the economic crisis that the country was experiencing, and the effects of this on national reconstruction projects. In despatch 1702/GSG/1.1/2010 of 29 June, addressed to Paulo Kassoma, his secretary general, Eduard Beny, referred to:

“The financial constraints experienced by the National Assembly results in part from the credit agreement entered into with the Banco de Comércio e Indústria (BCI) at the end of last year, for the acquisition of official cars for the parliamentarians of this legislature,  at a value of 3 217 887 000  Angolan  kwanzas. We had a business meeting
on 10 July of  this  year  with  the  Chairman of the Board of BCI, which  resulted  in him expressing his complete willingness to reschedule or commute the debt in question.”

In principle, the debt incurred by the National Assembly must be paid back in full over a term of 12 months with funds from the General State Budget, according to the terms of an agreement between the National Assembly and the Finance Ministry. In its 2010 budget, the National Assembly made available a total of 3.7 billion kwanzas (about $40 million) specifically for the acquisition of 255 official cars. The repayment is to be made at the premium interest rate of 18%. To date, the interest incurred has reached $1.4 million.

In the initial contract, signed on 22 October 2009, BCI granted the National Assembly a loan of $35.7 million for the acquisition of 190 BMW 550i sedans through a local private trucking company TCG, which in turn uses the Dutch-based Van Vliet Handel Holland BV as an intermediary.

The then Speaker of the National Assembly and current Vice-President of the Republic, Fernando da Piedade Dias dos Santos “Nandó” authorised the deal with TCG, a company belonging to the former Commerce Minister, Carlos Alberto Van-Dúnem, without the public tender process that the law demands. The first contract, for the supply of 190 BMW 550i vehicles, was cancelled in December 2009 in order to change to a different model and to increase the order by a further 20 vehicles, according to correspondence between TCG and the National Assembly. As a bonus, the company offered three 5 Series BMWs with special armour plating for the Speaker’s fleet of cars. The managing director of TCG made this offer saying “we hope, by this gesture, to have steadfastly defended the interests of the Angolan state”. The Speaker’s fleet has also acquired five 2010 model Lexus LX 570 cars, each priced at over $131,000, with a total cost of $655,000.

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