THE Commission of Inquiry on the operations of the Energy Regulation Board yesterday heard that the Ministry of Energy and Water Development requested the Zambia Public Procurement Authority (ZPPA) to waive open bidding twice to allow single-sourcing of companies to supply the country with fuel worth billions of United States dollars in the last three years.
The authority oversees all procurement by Government ministries and parastatals and uses open bidding, direct bidding and limited bidding as its methods of bidding for contracts.
ZPPA director-general Samuel Chibuye said the ministry requested for the waivers to enable Dalbit and Independent Petroleum Group (IPG) to supply fuel because of crises brought about by the closure of Indeni Petroleum Refinery during the period in question.
He said this in response to questions from the commission, chaired by Mr Wynter Kabimba, on contracts the authority authorised in the last three years.
Mr Chibuye said the authority gave the ministry authority to procure over one million metric tonnes of fuel valued at US$3.5 billion from IPG and authorised another procurement estimated at US$1 billion at different times but the ministry negotiated the prices with the two companies without informing it of the final price.
“They were supposed to revert back to us but they never came back to explain how they negotiated the contract,” he said.
Mr Chibuye said the IPG contract was negotiated downwards to US$1.2 billion and that ZPPA was not updated.
He said even the US$1 billion-estimated contract involving Dalbit was negotiated by the ministry with the oil company but the ministry had not gone back to the authority over the negotiation to date.
Mr Chibuye said ZPPA authorised the instances of single-sourcing in question because it did not want to bear the blame of consequences of shortage of fuel occasioned by the closure of Indeni Oil Refinery.
He said the authority also gave Dalbit a contract to supply fuel, refurbish three fuel storage tanks in Ndola and provincial depots at a cost in millions of US dollars without undertaking to ascertain whether the company had expertise in engineering works.
Mr Chibuye said ZPPA relied on the Ministry of Energy and Water Development to allow Dalbit to refurbish the tanks and depots.
He said the authority could not find out the suitability of the company for the work because of the urgency brought about by the closure of Indeni Oil Refinery.
“We did not take time to verify the expertise of the company because of the urgency created by the shutdown at Indeni. We were aware that there were Zambian companies that could do the engineering works but Dalbit had the capacity to provide the finance,” Mr Chibuye said.
Earlier, Ministry of Energy and Water Development director of human resource Paul Chanda said the ministry had just been given Dalbit as the only name to consider to procure fuel and refurbish the tanks and depots.
[Zambia Daily Mail]
Quis the ****we want fuel prices downed to at least a dollar per liter
Now, this reaks and stinks of corruption. Single sourcing for over a billion dollars of oil does not look like an ‘urgent matter’ occasioned by ‘Indeni closure’. This looked like long term contract. Will wait and see.
Lelo more to come.
bring all these that messed up to book and jail them if guilty of crimes, alot of people suffered in zambia and still do. Lets make an example for future leaders to learn from.
We must focus on sorting this gas crisis out. It is evident that there is malpractice all over this. It appears single sourcing was an ‘in thing’ in the MMD. Let the inquiry come out with the exact beneficiaries and benefactors and exact amounts and if need be, an audit must be carried out of the whole fuel procurement process. It was a shame to read that even Zimbabwe is paying less for its gas and that Zambia pays the highest for its gas in the whole of Africa!
Corruption all the way to state hse. That is why Zambia remain the most expensive place to buy fuel in our region if not the entire Africa.
Sons and cadres!
ya it was sons and cadres
…mama.
So far no evidence. Please find the person who issued instructions and failed to revert with details of contracts signed and get answers. If no explanation are given then we’ll begin to see evidence of ill intent. I wish they could do these meetings behind closed doors and publish reports only. This is because the public will be taking any submission as proof of corruption and when conclusions are made otherwise there will be discontent.
So, for the last three years nothing was done to try and normalise the procurement process?..does it mean that we have been in an INDENI crisis for three year? It is clear, we need to know who was chewing these kick-backs, and we need to recover these monies. I always knew, Zambia is a rich country in the midst of poverty.
Yaba My lovely country. its good cans of worms are being spilled.
Lets wait and see. we also want an update of the Lozi saga or the Barotse Land saga.
RB where were u taking zambia kanshi? was it you kanthemba, Lexus cars instructions, fuel instructions, more to be revailed. nowonder tandiwe is worth K8 billion. money laundering yagwila kudala iwe. zambians wake up RB, konga, Sikota wina to be locked up. immunity to be lifted from rubia bandwa. zamtel RB, dora tonya tonya siliti locked up also. this was shit men….
It looks likely even the ‘sudden closure’ was part of the conspiracy. The beauty with commissions of enquiry is that they get people to know weaknesses in the system that give space to abuses.
Honourable minister, make sure that the reduced price of fuel is passed to bus passengers. the problem is the people who adjust bus fares has bus buses and they adjust to their advantage. amend a law that all those who are mandated to adjust bus fares must not own any mini bus whatsoever.
Indeni is shit just abolish that thing. We are not an oil producing country, so why have a refinery? The only effect indeni has is that of inflating prices given that it is actually a separator not a refinery. Infact, we need real expalanations as to why fuel is about twice as expensive relative to all our neighbours.
INDENI isn’t a refinery but a distilation plant. We transport a mixture containing 50% Diesel plus other products for separtion in Ndola.
I dont envy PF and Sata.. The mess taht they have inherited all over is too much
Ninshi fyonse ni single sourcing?
@ G7.keep up Italian bunga.you have well rounded research skills
That is why the fools are stinking rich. Former president wife estimated to be worth more than 8 billion Kwacha, the sons more than that and the former president should definitely worth billions They should be investigated.
That’s what happen when you marry a grl of your own granddaughter’s age. You want to please her at the expense of the whole nation.All was about 10 per-cent commission to please her so that no young man can dare to come to her. the time has come to reveal the truth.
Dalbit Petroleum is a privately owned Sudanese company and Independent Petroleum Group (IPG) is a Kuwait based company, do the here math it isn’t rocket science here anybody can cut a deal with these chaps. All these companies have websites just google their names, no wonder why fuel is hideously high in Zed, just imagine if these were open tenders the cost of fuel a the pump would have been low…..just disgusting!!
Zambians enjoy rumor mongering. So far i have not heard anything that can stand in a court of law. We need to start getting all those who have abused tax money before courts. I hope this doesn’t get Sata in court also, he & the late paul tembo were found with money believed to have been stolen.
# 16 digga. Was actually thinking in the same line. Ba PF , the work you have is enormous. It looks like all services we got from the government came at a huge price benefiting few SELFISH individuals. One politician who has FOOLED Zambians is Felix Mutati. He is one of learned politicians who have accumulated wealth through CORRUPT means. That is why it is important to prosecute all who have stolen. It will send a message to PF guys so that they think twice when tempted to abuse OUR resources.
Sad story. Govt should not be involved in oil importation. Should be left to competent bodies. Govt should only provide oversight thru ERB and ministry of Energy. This is what used to happen in the days of Zimoil and Znoc. The ministry of Energy does not have qualified and skilled people. Also it under the control of politicians.
We need to get to the bottom of this – who is financing these oil purchase and at what cost ie interest rates. Why did Total International stop importing the crude oil and pulled out? Why did they stop using Tazama and Indeni refinery to import the crude oil? Were they making losses? If it was because they were accumulating debt, who is now accumulating that debt? Is it govt? Does the country break even or make a profit from crude oil? Or make losses?
Fuel is a strategic commodity and one cannot expect to go through the red tape of bids and such things. You gotta get it whenever and however you can. What this commission of inquiry needs to look at, is whether there was personal monetary gain from some individuals in Zambia.
Ladies and gents, First and foremost, we should understand the normal operations of Indeni. Indeni does not just refine oil but also stock. Under normal operation, Indeni should stalk fuel which should last for atleast three months in case of any unforseen circumstance. Within that three months a normal tender can be done avoiding single sourcing. That is the reason we never had any fuel shortage during Kaunda period. The issue of fuel shortage started when MMD came into power for a reason, corruption. The crisis mentioned by Chibuye was just created and it requires further investigation. Secondly, how do you authorize a procurement before negotiations are concluded? Chibuye is lying. He was part of the plunder.
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