…$20 million saved from an illicitly amended oil contract

THE critical shortage of petroleum products that almost brought Zambia to a standstill between March and April this year was as a result of a corruption scandal in which the country could have lost US$20 million through an oil supplying contract with Trafigura.

Trafigura demanded to be paid an additional $20million on a contract that was varied by a known officer who had no authority to do so.

Government sources have revealed that Government refused to be blackmailed into paying an extra US$20 million above the contractual amount.

Dalbit, the current supplier, came to the aid of the nation to avert and ameliorate the fuel crisis that threatened to bring the country’s economy to its knees.

Sources from the Ministry of Energy have disclosed that a senior official at the ministry connived with Trafigura to corruptly amend the oil supplying contract between Government and Trafigura, which was going to see the country lose an extra US$20 million in the illicit transaction.

Trafigura is the company that was embroiled in another oil supplying scandal which saw Zambia procure 216 million litres of petrol and 21 million litres of diesel at an exorbitant price of US$500 million when the country should have paid US200 million as per the ruling international market prices at the time.

Between 2011 and 2012, Dalbit was among the companies that participated in the tender to supply Zambia with petroleum products and provided the best bid but the contract was controversially awarded to Trafigura that came second in the bidding process.

“Trafigura started supplying fuel to Zambia in 2012 but later, a named employee at the Ministry of Energy wrote an E-mail to Trafigura, the effect of which was to commit Government to paying Trafigura US$20 million above the agreed contractual amount. Government refused to succumb to the blackmail and declined to pay the US$20 million after which Trafigura stopped delivering fuel to Zambia demanding that they be paid the extra amount. This led to the critical shortage of fuel in the country and Government had to urgently look for alternative sources and Dalbit came to the assistance of Government to arrest the shortage of petroleum products, the source said.

The source said it was the position of Government that Trafigura could not claim to be paid US$20 million on the basis that the contract to supply fuel to Zambia had been amended through an E-Mail from an employee at the Ministry of Energy. The source said a contract of such magnitude could only be amended following procurement procedures which should have involved both parties from Government and Trafigura

The source explained that accusations that Government had single-sourced Dalbit to supply Zambia with petroleum products were unsubstantiated because Dalbit had been assisting Government and that there had been a cordial relationship between the two.

“If you read the letter from the Attorney General carefully, it will be clear that the decision to recommend that Dalbit be single-sourced was based on the cordial relationship between Government and Dalbit. In order to avoid another fuel crisis and on the basis that Dalbit had been the best bidder in the 2011/2012 public tender, Government refused to continue being arm-twisted. The public should therefore be concerned by how Trafigura was awarded the contract when it was only the second best bidder,” the source said.

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