Malawi Energy Regulatory Authority (Mera) has come under fire from the Parliamentary Committee on Natural Resources and Climate Change for allegedly influencing the award of multi-billion kwacha fuel importation contracts.
In a report on the fuel procurement process by National Oil Company of Malawi (Nocma) and the role of Mera presented in Parliament in Lilongwe yesterday, the committee’s chairperson Werani Chilenga also asked the President to review the composition of the regulator’s board.
Reads the report: “The committee is concerned that Mera’s action shows that it wants prolonged delays in the procurement process of fuel. The committee is, therefore, concerned that such acts are a recipe for possible fuel crisis in the country which translates that government has failed.
“The committee is concerned and would like to urge this House to deliberate this issue with a sober mind.”
The question of President Lazarus Chakwera firing the Mera board was tackled during the fortnightly State House Briefing on Monday in Lilongwe with presidential press secretary Brian Banda stating that the President had confidence in the boards of
the two institutions that they would resolve the issue at hand.
The report alleges that Mera influenced Nocma on the choice of suppliers to be included in the fuel importation deal and that it attempted to force Nocma to change the way it imports fuel into the country.
In the report, the committee said it suspected that some unnamed officials were behind the regulator’s influence on Nocma allegedly to benefit from procurement of fuel while delaying the importation process
The fuel importation process has reportedly taken eight months against the normal four months, prompting the committee to express fears that the delays could lead to a fuel crisis.
Further, the committee recommended that the Anti- Corruption Bureau should investigate the matter.
The committee has also faulted the broker system in the transportation of fuel, saying it is not legally supported. The . committee argues that the arrangement was negatively affecting local hauliers who are getting fewer contracts than their foreign counterparts
Parliament is yet to adopt the report as members of Parliament (MPs) are yet to deliberate on the matter.
Speaking after the report was submitted, Leader of the House Richard Chimwendo Banda said there was need for MPs to study the report before making their inputs.
The stand-off between Mera and Nocma had, as of last week, left the country’s strategic fuel reserves, which normally stock 78 million litres, with an equivalent of two months of fuel cover.
In an interview last evening, Mera board chairperson Leonnard Chikadya said Mera communicated its position to the committee and will not comment further on the report.
During a meeting with the committee last week, Nocma acting chief executive officer Hellen Buluma is on record as having said that should the process of procurement not be concluded by June 30 when the existing contracts expire, the country will likely face a fuel supply crisis.
But Mera, led by Chikadya, told the committee during the meeting that its intervention was backed by the law and that it was only restricted to advising Nocma to add two more companies to the list of suppliers. The Mera team also said the two recommended suppliers were those that participated in the bidding process.
Mera is also on record to have argued that the fuel deals Nocma settled for were $50 million (about K45 billion) more expensive and would trigger fuel pump price increases if adopted