State-owned power utility Electricity Supply Corporation of Malawi (Escom) has disclosed that the amount of diesel for the 78 megawatts (MW) generators that was stolen is actually 4.2 million litres and not 3.8 million litres as earlier reported.
Escom public relations manager Innocent Chitosi confirmed that the amount of fuel stolen was 4.2 million litres and that there were no effective escorts for the Kanengo site in Lilongwe compared to other areas.
In a written response, he said: “The original figure we gave was an estimate during investigations. Our investigations have indeed shown that the figure was 4.2 million litres. There were no effective escorts [to Kanengo] compared to Chichiri. This has now been addressed.”
But Chitosi said the theft was not a result of fuel being delivered at night although this may happen in emergency cases to ensure electricity customers are well served.
While indicating that the situation improved in the month of August and part of September, he could not say how much fuel has been saved from theft.
The theft translates to a loss of K3.7 billion at the pump price or K1.7 billion at the wholesale price at which Escom negotiated to buy the fuel from National Oil Company of Malawi (Nocma) with approval from government.
The volume of 4.2 million litres is approximately 114 tankers of 35 000 litres capacity which many, including civil society organisations and the Budget and Finance Committee of Parliament, have argued cannot be blamed on security guards alone.
Coincidentally, Vice-President Saulos Chilima, who is also United Transformation Movement (UTM) leader, mentioned at his rallies in Mulanje and Zomba last week that more fuel had been stolen than the reported 3.8 million litres. In July, Chilima also blew the whistle that 3.8 million litres of diesel were stolen.
Towards the end of last year, Escom entered into an emergency power supply agreement to produce electricity using diesel generators for sale to Escom.
However, Escom opted to buy the diesel from Nocma at a subsidised cost of K428 per litre after levies and subsidies were removed.
A memorandum from Escom controller of security services Rodrick Mkaka to the director of human resource and administration Dafter Namandwa details how the diesel was stolen at the sites where the generators are placed, namely, Chichiri in Blantyre, Kanengo in Lilongwe and Chinyama in Kasungu.
The memo indicates that Kanengo is the most porous site where of the 7.4 million litres of fuel delivered between January and July 31 2018, about 2.1 million litres could not be accounted for.
A source at Escom disclosed that a cartel was taking advantage of the laxity in security at the Kanengo site to steal the diesel.
The source said fuel was being delivered at night at a filling station close to the Kanengo Aggreko site before the tankers proceeded to be offloaded for electricity generation.
According to the Escom memo, before the theft was discovered, the procedure was that Nocma would load the tankers in the presence of the driver who would carry a delivery note to the designated Aggreko site.
The Escom investigations suspected that the tankers were either offloading less fuel and selling the remainder or selling some of the fuel and offloading less than what they carried from Nocma.
Reads the memo: “The internal investigations that were conducted revealed the following allegations: That fuel was being sold by the tanker drivers to vendors in different parts of the country. There was collusion between the driver, Escom fuel attendant, Aggreko guards and staff who were sharing the proceeds. In some sites, Aggreko staff on night shift were selling fuel to vendors.”
But while alleging that Aggreko staff were selling fuel to vendors, the same memo indicates that Aggreko staff were not present at all times when the fuel was offloading the fuel to confirm receipt.
During a meeting with Parliament’s Budget and Finance Committee in Lilongwe last week, Escom chief executive officer Allexon Chiwaya said after the theft was discovered, the parastatal’s director of procurement went to supervise the delivery at Aggreko where it was discovered how the fuel was being stolen.
“There is a truck under police investigations which recorded that 40 000 litres was received from Nocma and delivered into the Aggreko machines. But when they dipped into their machine, they found there was only 20 000 litres in the truck,” he said.
Between January and June, Nocma delivered 11.3 million litres of diesel of which 1.9 million could not be accounted for while at Chinyama, 820 000 litres was delivered but 109 570 litres was stolen.
“Please note that the total of 4 226 579.93 litres of diesel was not accounted for from January to June at the three sites,” the memo reads.
In July, Escom instituted some control measures on the process of fuel delivery at the Chichiri site only and not Kanengo where most fuel was missing.
Theft continued at Kanengo where 99 187 litres of the 1.2 million litres delivered was stolen and 51 820 litres of the 775 980 litres was stolen at Chinyama.
Escom is currently conducting investigations to prove collusion and gross theft of the fuel.
The Escom boss also told the committee that diesel generation was an expensive venture and considering that fuel was the heaviest cost of the emergency deal, Escom applied for small levies to be taken off fuel for the purpose.