‘CMED fuel scam culprits could scare off investors’

Source: ‘CMED fuel scam culprits could scare off investors’ | The Herald December 4, 2017

Business Reporter
THE continued presence of staff who participated in the botched fuel deal that prejudiced the Central Equipment Mechanical Department (CMED) of $2,7 million could scare off investors willing to partner CMED, a parliamentary portfolio committee has noted.

In its submission to Parliament, the Parliamentary Portfolio Committee on Transport and Infrastructure said the engagement of the Reserve Bank and the Ministry of Finance needed to be expedited to guarantee safe investment and policy consistency to foreign investors who are keen to partner CMED in the importation of fuel.

As such, the committee wants the RBZ and the Ministry of Finance to assure potential investors of a hassle-free return on investment. It reiterated its call for the “Fuelgate Scandal” to be urgently concluded and for all the culprits to be brought to book. The committee said it would be prudent for all those fingered in the matter to be suspended from duty pending finalisation of the case.

“The committee noted with concern that the matter of the botched fuel deal was taking too long to conclude. In addition, the fact that some of the officials involved in the fuel scam were still very much an integral part of the company’s structures did not augur well for the integrity and credibility of the organisation and was likely to put off potential investors,” the committee submitted.

The parliamentary committee said that it was concerned with the inordinate delays in the conclusion of the botched fuel deal, which had cost both the organisation and the country a staggering $2,7 million in taxpayers’ funds.

There are also grave concerns that such a serious case has taken over 3 years to finalise.

The Portfolio Committee on Transport and Infrastructural Development conducted an inquiry into the turnaround strategy for CMED. The enquiry was motivated by the realisation that most State-owned enterprises in general and CMED in particular, which were created to be self-financing cash cows for Government under the Commercialisation Act of 2000, were dismally failing in this regard.

Instead of assisting the Government in raising revenue and delivering quality service, they were repeatedly turning to Government for bailouts and thus becoming heavy liabilities on the fiscus while service delivery continued to plummet. The committee remained convinced that the CMED provides a viable means of consistent revenue generation to the Government and people of Zimbabwe.

It said Government must, as much and within the limits of the prevailing resource constraints, stagger payment of the debt to CMED per quarter to ensure that it is liquid enough to fund critical operations.

“The Ministry of Transport and Infrastructural Development must grant CMED a stake, like other local firms, in major infrastructural development projects such as the dualisation of the Beitbridge-Chirundu highway.

“The proactive initiatives that have been taken by the organisation in a bid to remain viable such as Easy Go car hire and driving school, have proven to be strategic masterstrokes which must be applauded.”

However, the committee is not convinced that sufficient structural and organisational controls have been put in place to prevent recurrence of revenue leakages exemplified by the yet to be concluded fuel scam.