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Anti-Corruption Bureau stops ‘costly’ fuel import deals

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Fitima Khonje

New Anti-Corruption Bureau (ACB) Director General Martha Chizuma has started getting down to work, her first major assignment being stopping National Oil Company of Malawi (Nocma) from proceeding to award fuel importation contracts for the year 2021/22 until investigations are concluded.

The halting of the deals comes barely a few days after Human Rights Defenders Coalition (HRDC) wrote the graft-bursting body, demanding a probe into the deals after industry regulator, Malawi Energy Regulatory Authority (Mera), raised a red flag on the cost of transactions.

Mera had indicated that the deals could trigger a fuel price hike as they were $50 million (about K45 billion) more expensive.

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In a statement Wednesday, which ACB spokesperson Egrita Ndala signed, the graft-busting body says it has issued the notice following complaints of irregularities it has received over the deals.

“Pursuant to its powers, under Section 23(1) of the Corrupt Practices Act, on 8th June 2021, the Anti- Corruption Bureau issued a restriction notice to Nocma on a contract to supply fuel under procurement number Nocma/ICB/ Fuel/2020/2021.

“This follows several complaints received by the ACB alleging irregularities and suspected corruption surrounding the fuel procurement process. The ACB has instituted investigations into the matter. Following the restriction notice, Nocma is therefore restricted from awarding the contract until the ACB has concluded the investigation or lifted the restriction notice,” the notice reads.

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Last week, Nocma published an Intention to Award notice in local dailies where it expressed intent to award contracts to Lake Oil Limited, Dalbit International and Camel Oil to deliver approximately 234,820 metric tonnes of refined petroleum products from the ports of Beira, Dar Es Salam and Nacala.

According to a No Objection that Nocma obtained from PPDA [Public Procurement and Disposal of Assets Authority] on March 17, Lake Oil was to supply 30,908 metric tonnes of diesel and 15,575 metric tonnes of petrol through Beira under the Delivered Duty Unpaid (DDU) method. The same Lake oil is to supply 34,092 metric tonnes of diesel and 19,425 metric tonnes of petrol through the Dar es Salaam Port also using DDU, bringing the total allocation to the company to 100 metric tonnes.

Dalbit is to supply 28,539 metric tonnes of diesel and 33,888 metric tonnes of petrol through the Beira Port under the DDU method. The firm was also expected to supply 10,000 metric tonnes of diesel and 7,573 metric tonnes of petrol to Malawi via the Dar es Salaam route on DDU.

The letter also showed that Camel was approved to supply 10,321 metric tonnes of diesel via Nacala Port and 8,554 of petrol using ex-tank method. The same Camel was also to supply 24,000 metric tonnes of diesel and 11,853 metric tonnes of petrol through Dar es Salam Port using DDU.

Reacting to the development Wednesday, HRDC Chairperson Gift Trapence hailed ACB for issuing the restrictions.

“We are very happy that ACB has stopped the deal. We are equally happy that the ACB has started to probe the matter. We will be following the investigations with keen interest so that the matter is brought to a logical conclusion,” Trapence said.

Nocma Deputy Chief Executive Officer Hellen Buluma declined to comment on the matter Wednesday.

With the current fuel importation contracts due to end this month, Mera has urged Malawians not to panic over the matter, saying Malawi would continue having a steady supply of the commodity.

Mera spokesperson Fitina Khonje said Mera was mandated to promote the interests of consumers of energy with respect to energy prices, charges, continuity and quality of energy.

Khonje said Section 34 of the Liquid Fuels and Gas Act permits Mera to implement measures and restrictions provided for in the Liquid Fuels and Gas Emergency Response Plan.

“In the current scenario, Mera will consider the following options: Waive the Strategic Fuel Reserves (SFR) Regulations which require Oil Marketing Companies to uplift 50 percent of their volumes from SFR. The waiver will allow other importers to increase their monthly nominations for direct imports.

“The other option is to allow Nocma to uplift additional plus or minus 10 percent of their volumes from suppliers with whom Nocma has running contracts. These waivers would be lifted when Nocma finalises its fuel procurement processes,” Khonje said.

She added that other options include ordering spot contracts which entail spot tenders using the restricted bidding method after obtaining all necessary approvals as well as extending the existing contracts.

On May 25 this year, the Natural Resources and Climate Change Committee of Parliament (NRCCC) tabled a report in the august House of the deal and blamed Mera for throwing spanners in the procurement process.

In the report, NRCCC Chairperson Werani Chilenga said the committee was of the view that President Lazarus Chakwera should consider dissolving the Mera Board.

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