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Zambia : TIZ - Ministry of Energy's decision to single-source IPG puts Zambia in very precarious situation
Publish Date : 16-Feb-2016
Transparency International Zambia has announced that the country is in a very precarious situation due to the Ministry of Energy's decision to single-source IPG to supply 1.4 million tonnes of crude oil for the next two years.
After abruptly scrapping Gunvor's deal to supply co-mingled oil for Indeni Petroleum Refinery, energy permanent secretary Brigadier General Emeldah Chola said Independent Petroleum Group (IPG) had been single-sourced for the contract which sources close to the deal say is valued at US$1.3 billion.
Brig Gen Chola said the Zambia Public Procurement Authority (ZPPA) had allowed the ministry to single-source the Kuwaiti company for the tender that was always the subject of competitive bidding.
After alleging that Gunvor had on several occasions been guilty of providing Zambia with higher contents of organic chloride outside the specifications of the contract, Brig Gen Chola, said,"We had to put in measures immediately to fill the gap of Gunvor. So we had to find a company to single-source and it is also one of the measures that is allowed within the procurement method; it’s not that it’s outside the procurement method."
However, TIZ president Lee Habasonda voiced concern that the government single-sourced oil procurement from IPG.
Habasonda said,"From our point of view, single-sourcing is generally bad practice in procurement because it carries connotations of corruption and back deals.It is unacceptable and must not be the norm. Clearly, this deal puts government in a very precarious position. We think that great care has to be taken to ensure that such a procurement approach does not become a cue for other government departments to adopt. It is for this reason that TIZ insists on competitive tendering and the removal of any monopolistic tendencies in our procurement system."
