
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]