PAC meets Nocma on fuel procurement deals

Public Accounts Committee (PAC) of Parliament at the weekend met National Oil Company of Malawi (Nocma) officials over the fuel procurement debacle.

In an interview yesterday, PAC chairperson Joyce Chitsulo said it was too early to discuss what was agreed at the two-day engagement.

The engagement with Nocma came against the background of a Parliamentary Committee on Natural Resources and Climate Change report that recommended the removal of Malawi Energy Regulatory Authority (Mera) Board due to alleged interference.

The report, which was adopted by Parliament in May, recommended the removal of Mera’s Board due to alleged influence in the award of multi-billion kwacha fuel importation contracts at Nocma.

But Chitsulo said despite such a recommendation being made, Mera’s Board of directors cannot be removed before PAC hears them out.

“We heard Mera, so yesterday [Saturday] and today [Sunday] we have been hearing from Nocma. Then we will agree on the way forward. For now I can’t say much,” she said.

According to the committee’s report, it is alleged that Mera influenced Nocma on suppliers to be included in the fuel importation deal, and attempted to force Nocma to change the way it imports fuel into the country.

On the contrary, in its report, Ministry of Energy in June faulted Nocma on the award of the fuel supply contracts on the basis that selected tendering processes lacked transparency and accountability.

Some quarters have since faulted the Parliamentary Committee on Natural Resources for being compromised and less objective; hence, writing a biased report favouring Nocma.

When asked if PAC takes seriously the Natural Resources committee’s recommendations made in the report, Chitsulo asked for more time before responding.

Mera spokesperson Fitina Khonje yesterday confirmed that they met PAC some weeks back while Nocma acting chief executive officer Hellen Buluma could not be reached on numerous attempts on her mobile number.

However, Buluma is on record as having told the Natural Resources committee in May that if the process of procurement was not concluded by June 30 when existing contracts expire, the country was likely to face a fuel supply crisis.

But Mera, led by its board chairperson Leonard Chikadya told the Natural Resources committee 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.

In January, Mera Board declined to approve Nocma’s application for approval of prices of suppliers citing concerns of overpricing. Subsequently, Mera asked Nocma to only contract selected suppliers at a price suggested by other lower bidders.

Mera argued that contracts were costly by about $50 million (about K45 billion) due to the Delivery Duty Unpaid (DDU) procurement system that Nocma had opted for oil suppliers such as Lake Oil Group-on the Northern Corridor of the Dar es Salaam route-and IPG Oil and Gas on the Southern Corridor or the Beira route.

Under the DDU arrangement, the supplier of the fuel is responsible for the safe delivery of goods to a named destination, paying transportation expenses and bearing all risks during transport, which is claimed later on.

Currently, the Anti-Corruption Bureau (ACB) is investigating the award of the fuel supply deals. n