YOIL DEALERS FUME!

…as Govt single-sources Agro-Fuel to import processed low Sulphur diesel through the converted TAZAMA pipeline

By PRINCE MABUMBA 

THREE consignments of low Sulphur diesel worth about US$70 million each have been procured by government without tendering process, sparking an uproar among Oil Marketing Companies (OMCs).

TAZAMA

Government has single-sourced Agro-Fuel Company Limited to import processed low Sulphur diesel through the now converted TAZAMA Pipeline, a decision the Oil Marketing Companies Association of Zambia (OMCAZ) has described as promoting unfair and uncompetitive business practices.

And Brian Mundubile has said it was unfortunate that the United Party for National Development (UPND) government had made single-sourcing as the only mode of procurement in total disregard of public procurement laws.

The OMCAZs has described as unfair business practice for the government to have excluded other players in the sector who could have had competitive bids to participate in the market.  

Speaking in an interview with Millennium TV news, OMCAZ president, Kafula Mubanga disclosed that Agro-Fuel was only sub-contracted to clean up the pipeline in readiness for operations, a contract that must have already come to an end by now.

Dr Mubanga however said it was surprising that Agro-Fuel was awarded a contract to import low-Sulphur Diesel without any tendering process which could have seen other players participate and make the procurement process more competitive. 

Dr Mubanga explained that TAZAMA pipeline was supposed to be open to all OMCs to allow for competition unlike the current situation where it is being run by a single -sourced entity.

“Government must come clean on this matter and clearly state what is the objective, why are we keeping Agro Fuel for a longer time and not open the pipeline for competition purposes and if the objective is to reduce the cost of transporting products, why is Government not having a decision over Agro Fuel?” Dr Mubanga questioned.      

Dr Mubanga stated that the operation of the TAZAMA pipeline by a single-sourced entity had a made it difficult to push for a reduction in the pump price of fuel as there were limited stakeholders in the operations of the pipeline. 

“The TAZAMA pipeline was supposed to be open to allow competition but this kind of uncompetitive practice should come to an end in the industry. It kills the objective of us having a pipeline if only one particular company will be able to push in products and regulate it. The implication is that we cannot have competition and we cannot push the price of fuel down,” Dr Mubanga said.

But Mr Mundibile, the Leader of the Opposition in Parliament said it was not surprising that the UPND had adopted direct bidding as the only means of procuring goods and services because the people in government were in a hurry to enrich themselves through corruption.

Mr Mundubile, who is Patriotic Front (PF) presidential candidate, said although single-sourcing was provided for among the modes of procurement, the law was clear on when single-sourcing could be used in procurement.

“We know that single-sourcing is the only way that they can help their friends and it is a source of corruption,” Mr Mundubile said.  He said the usage of TAZAMA pipeline by one company was distorting the business model for the other participants in the petroleum sub-sector.

“We condemn the use of the pipeline by one participant because we feel the people of Zambia are not getting the value for money in the conversion of the pipeline,” Mr Mundubile said.

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