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CMED awarded tender to an unregistered company

By Bernard Mpofu

HARARE – An inquiry into a $3 million fuel procurement scandal at government transport enterprise CMED has recommended further investigation into the scam after it emerged that the parastatal flouted procedures by awarding the tender to an unlicensed petroleum company.

CMED implicates MD in US$3 million fuel scam
CMED awarded tender to an unregistered company

Last September, the CMED directors appointed a board of inquiry into the order of four million litres of diesel placed by the parastatal with a company called First Oil Company in February, 2013. Other companies that took part in the tender include Comoil, MAPS Petroleum and Sakunda Energy.

The board of inquiry, led by the country’s former attorney-general Sobusa Gula Ndebele, found that First Oil did not have the capacity to supply the fuel.

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It also emerged that while the order was for four million litres of diesel, CMED paid $2,7 million, enough to cover the supply of three million litres excluding duties.

CMED secured a $3 million loan from ZB Bank last February for the purchase of the fuel.

The inquiry recommended investigations into several officials at the CMED and First Oil after it emerged that tender procedures were violated.

The case is yet to be brought before the courts.

“At the time of the tender award, First Oil Company did not hold a valid licence. Its import licence had expired on December 31 2012 and was only renewed on May 27, 2013. Technically speaking, this means that management awarded a tender to a company that was not registered to operate in terms of the regulations governing the fuel industry. Again, this points to lack of due diligence on the part of management,” read the report compiled by the board of inquiry and seen by The Source.

“During the course of the inquiry, the board came across cases of suspected misconduct or fraudulent behavior. For such cases, the board recommends further investigations with a view to establish misconduct or criminal behavior and consequently disciplinary action or prosecution as appropriate.”

The inquiry also found that there was an improper relationship between CMED officials and First Oil and advised that all CMED staff implicated in the report and those in procurement should have their assets profiled to verify whether they were not inappropriately acquired.

It also proposed that government should attach the assets to recover the funds.

“Attempts should be made for First Oil and its directors to commit themselves in writing to a tied acknowledgement of debt owing to CMED of $2,7 million and an undertaking to pay within a given time. This is an important step towards recovery of the money,” reads the report.

“The pursuit of NOIC and Petrotrade should be abandoned forthwith because there are no prospects of success. In any case they are state owned institutions. The prospects of establishing liability against them are very minimal.”
The inquest also revealed possible forgery of a letter confirming fuel availability from a third party that was engaged to supply the fuel. The Source