Petrotrade grilled over Sakunda fuel deal

PETROTRADE was yesterday grilled by Parliament over a $5 million fuel contract they entered into with Sakunda Holdings without following proper tender procedures.

Source: Petrotrade grilled over Sakunda fuel deal – NewsDay Zimbabwe November 29, 2016


Godfrey Ncube, the Petrotrade acting chief executive officer, yesterday appeared before the Daniel Shumba-led Parliamentary Portfolio Committee on Mines and Energy together with other managers, Elisha Bokoro and Siphambaniso Kundai.

Ncube, who has been acting CEO for close to two years, acknowledged before the committee that State Procurement Board (SPB) procedures were not properly followed when 180 million litres were procured from Sakunda following instructions from Energy ministry secretary, Partson Mbiriri.

The contract between Petrotrade and Sakunda was entered into in May 2014 and expired in September this year.

“The reason for entering into this contract was that Sakunda had loaned $5 million to the government, and this was an interest-free loan,” Ncube said.

“As a result, there was an agreement that Sakunda would supply Petrotrade (a government company) with fuel,” he said, adding the contract did not however last for 12 months, because of economic challenges.

Quizzed on why Petrotrade did not follow the correct tender processes, Ncube said the procurement from Sakunda was through a spot tender, where the Energy ministry used a waiver within the Procurement Act to make decisions to procure goods without following tender procedures.

But MPs queried the provision in the State Procurement Act allowing the breach of SPB rules, accusing Mbiriri of violating corporate governance codes when he authorised the deal, claiming the loan from Sakunda was not to Petrotrade, but to government.

The committee also castigated that Petrotrade settled for Sakunda after being given a directive by Mbiriri, when the fuel dealer was charging high premiums, to which Ncube said the deal was that Petrotrade received the fuel in advance.

He said that there was a possibility that those companies charging low premiums would have smuggled contaminated fuel. Asked where they were now going to procure their fuel after expiry of their contract with Sakunda, Ncube said they would procure from other suppliers such as Total, Engen, Trafiqura, Glenco and even Sakunda.

But MPs warned Petrotrade to follow the correct procedures when they procure fuel.