MPs demand answers over dodgy CMED fuel deal

via MPs demand answers over dodgy CMED fuel deal | SW Radio Africa by Nomalanga Moyo on Thursday, March 6, 2014

The Central Mechanical Equipment Department (CMED) is almost broke, amid revelations that the parastatal entered into a $2.7 million dodgy deal with a fuel company that never delivered.

Details about the multi-million-dollar black hole came to light when Davison Mhaka, a director at government transport services provider CMED, appeared before a parliamentary committee on transport Monday.

Mhaka told legislators that they signed a deal with First Oil to supply CMED with four million litres of fuel, but nothing has been delivered to date.

The MDC-T MP for Warren Park, Elias Mudzuri, who sits on the transport committee, said the appearance of CMED officials before legislators was routine.

“But we now know that they are almost broke and we have also discovered something that convinces us that there is corruption surrounding the $2.7 million fuel tender,” Mudzuri said.

The money was paid to First Oil last year in March.

“They (CMED officials) claimed that they have always paid in advance for the fuel and in this case, the fuel was supposed to be delivered in 24 hours.

“To us this smells of corruption and fraud because the circumstances couldn’t have changed in 24 hours. If indeed the fuel was there in the tanks as alleged, then it should have been delivered.”

Mudzuri said the fuel deal had all the hallmarks of white-collar crime, where money disappears and everyone pretends not to know what happened.

The matter is now before the courts, but MPs are accusing top CMED officials of being part of the scheme to defraud the State enterprise, and question why it had taken so long to institute proceedings to recover the funds.

Two months ago the Zim Mail reported how the CMED fuel procurement scam had sucked in another State enterprise, Petrotrade, and a shadowy Hong Kong fuel supplier.

The newspaper said it had documents that pointed to “the tacit involvement of top management at CMED, Petrotrade and First Oil in the deal that went awry.”

According to the paper, the $2.7 million deal was done through an offshore account on the strength of two letters from Petrotrade, that it had secured the fuel on behalf of First Oil and pledged to deliver to CMED once paid.

But Petrotrade did not receive any payment from First Oil, which in turn denied receiving the funds from CMED. First Oil claimed that they had been duped, together with CMED, by Hong Kong based fuel supplier Micro Petroleum.

CMED has failed to recover the money from Micro Petroleum’s owner Tony Blanco, who is blaming US restrictive measures against ZANU PF for his failure to honour the CMED deal. Blanco is currently serving time in a US jail on undisclosed charges.

The businessman is reportedly arguing that the $2.7 million from ZB Bank (Zimbank) was intercepted by the US government because the financial institution was subject to restrictive measures when the transaction went through.

“You can’t pay a new supplier $2 million without security, there is always a security bond which is needed and how did the CMED do so without these basic checks? Something is not right here.

“This is all part of the decay that started way back in the 1980s with the Willowgate scandal and we have now got to a point where people are rewarded for being corrupt,” MP Mudzuri told SW Radio Africa.

ZANU PF Chegutu West legislator Dexter Nduna said CMED officials were “naive, ignorant, or involved in this scam”.

During the probe, legislators also learned that the Zimbabwe Electoral Commission has failed to pay CMED $4.5 million for vehicles hired through the parastatal during last year’s constitutional referendum. In November, a ZEC official said they were still waiting for a Treasury allocation to enable them to pay.

The government also owes the firm $1 million for car rental, fuel and other services. Last week the transport service provider was asked to contract and supply hundreds of luxury vehicles for use at the wedding of President Mugabe’s daughter Bona. Zimbabweans suspected that the funds to pay for the luxury vehicle hire will come from public coffers, at a time when millions are starving.