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HRDC wants ACB to probe fuel contracts

Gift Trapence

Werani Chilenga

Human Rights Defenders Coalition (HRDC) has written the Anti- Corruption Bureau (ACB) demanding a step-by-step investigation into the award of fuel importation contracts by the National Oil Company of Malawi (Nocma).

Nocma has been at loggerheads with Malawi Energy Regulatory Authority (Mera) in recent months over the deals which Mera argue are exorbitant and could result in Malawi paying $50 million (K45 billion) more, which could hurt the consumer in form of high pump prices.

In a letter, dated May 27 2021, to the ACB Director, HRDC has asked the graft-bursting body to immediately suspend the whole procurement process until it is satisfied that relevant procurement laws have been fulfilled and that no offences under the Corrupt Practices Act (CPA) have been committed.

“Fully aware that fuel can be an epicentre of corruption as it is a lucrative trade, we, therefore, make the following requests to your office: An immediate, thorough and expedited investigation on each step of the procurement process including the bidding, evaluation, selection and awarding of contracts, a thorough review of the role of the boards of Mera, Nocma, government ministers, public officers, politicians and the oil suppliers in the process.

“An investigation over alleged possible corruption and collusion to defraud the public, any solicitation or offers of kickbacks and an investigation of any allegations of overpricing to ensure no single penny is paid without justification,” HRDC’s letter, which chairperson Gift Trapence has signed, reads.

Last week, Nsanje Lalanje lawmaker Gladys Ganda, who once served as Nocma Deputy Chief Executive Officer, urged ACB to probe Nocma on how it managed to get approvals for fuel importation deals from Public Procurement and Disposal of Assets Authority, Government Contracting Unit, ACB and others without a nod from the industry regulator, Mera.

According to a report given out by Mera during a recent meeting in Mangochi, Nocma had opted to give a fuel importation contract to Lake Oil for the Northern Corridor under the Delivered Duty Unpaid (DDU) system and IPG on the Beira Route, despite the two quoting higher premiums.

In the fuel importation business, premiums are the mark-ups that suppliers put above the ruling international fuel price. That is to say, with the international oil price being dictated by the international market, suppliers compete on premiums or mark-up.

The figures from Mera showed that on the Dar es Salaam route on DDU, Lake Oil ranks on number 14 in as far as the importation of petrol is concerned with a premium of $323.99 per tonne to supply the commodity into Malawi’s capital, Lilongwe.

On the other hand, the same Lake Oil ranks as the 11th expensive bidder in the supply of diesel on the Dar es Salaam route as it quoted a premium of $289.59 per tonne.

The figures also show that Nocma has opted for IPG on DDU on the Beira Route despite it not being the lowest bidder.

In addition, the figures also revealed that Nocma has opted for IPG to supply fuel on the ex-tank system through the Northern Corridor, despite the firm not bidding on the route.

Tabling a report in Parliament on the matter last Tuesday, Natural Resources Committee of Parliament Chairperson Werani Chilenga said Mera should operate as a regulator and follow the law and not meddle in the procurement process by suggesting suppliers that Nocma should give contracts to.

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

Chilenga also said ACB should investigate claims already submitted by Nocma on November 6 last year.

Attorney General Chikosa Silungwe recently said the mandate to give THE go-ahead to Nocma to issue fuel importation contracts lies in the hands of Mera.

Speaking in Mangochi recently, Mera Board Chairperson Leonnard Chikadya assured the committee that the country could not plunge into a fuel crisis as the law provides for some short-term remedies for the country to continue importing fuel in the absence of contracts.

Chikadya said Mera’s interest in the matter was to ensure that Malawians purchased fuel at reasonable prices as well as to ensure the security of supply so that there is no shortage of fuel in Malawi.

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