TIZ challenges govt to disclose bank interested in oil procurement

TIZ challenges govt to disclose bank interested in oil procurement
By Staff Reporters
Sunday October 21, 2007 [04:05]

TRANSPARENT International Zambia (TIZ) president Reuben Lifuka yesterday challenged the government to name the local bank which has offered to participate in the procurement of crude oil. And finance deputy minister Jonas Shakafuswa has disclosed that mining companies have agreed to re-negotiate the mining development agreements with the government.

Meanwhile, Shakafuswa has defended President Levy Mwanawasa's involvement in the procurement of crude oil saying there is nothing wrong with the action.

Reacting to defence minister George Mpombo and Shakafuswa’s statements in defence of President Mwanawasa’s involvement in the procurement of fuel for the country, Lifuka challenged government to disclose how much money was involved in the crude oil procurement deal and names of all the parties.

“Can they name the local bank which President Mwanawasa said offered to participate in the procurement of crude oil? Let them name it. Why are they failing to name the bank involved?” Lifuka asked.

“If there is nothing to wake them up over our demand for more information of the transactions, they shouldn’t have reacted the way they have. Their reactions suggest that something is amiss. We have a problem with they way government is responding to our query.”

Lifuka said it was worrisome that there had been some a breakdown of communication within government in recent months on issues of national concern.

“As TIZ we owe it to the people such that each time we see that some corruption is to occur we raise the issue,” he said. “Our demand for more information on the crude oil transaction is not an attack on President Mwanawasa, but a move that is intended to promote transparency over expenditure of public funds.”

He said President Mwanawasa’s involvement in the procurement of crude oil showed how much the presidential powers were in excess.

“Such that each time there a crisis, he can simply strike a deal,” Lifuka said. “As an anti-corruption body, the fact that they have reacted in this manner, it means that we are working. Because they are now telling what we didn’t know.”

Addressing 24 trainee journalists at The Post offices in Lusaka on Friday, Shakafuswa said it was surprising that some Church leaders and members of the civil society were questioning President Mwanawasa's involvement in the procurement of crude oil when they could have been the first ones to criticise him had the fuel situation plunged into a crisis.

"There was a problem, and don't look at it as the government versus you but look at it as if you were in the President's shoes. What would you have done?" Shakafuswa asked. "Would you have gone back to tender in the middle of a crisis?" he asked.
"That is when executive powers come in, that is where they say the buck stops here and somebody has to make a decision. I think the President made the best decision.”

Shakafuswa further said the country was to date not going to have fuel if President Mwanawasa did not intervene.
Asked if the standard procedure was followed in procuring the crude oil, Shakafuswa said it was.

"If you see some time back, about two months ago, there was a tender that was advertised for the financing of crude oil. That tender was awarded by the national tender board through competitive tender," he said.

"There is also one thing you have to learn about crude oil, if we haven't bought oil for the next consignment, it means we are late. For the ship to start loading crude, and to start its journey from the ocean to bring the crude, it takes about 20 to 30 days and it has to be timed to the time your crude stock is running out," he explained.
Shakafuswa said the government gave out tender to somebody who was supposed to bring the crude on time but it was discovered that the shipment had complications.

"The tender was issued and awarded to somebody to deliver the crude. What happened is that this guy got a letter of credit from Citibank and got the oil from Russia and part of that oil came from Iran," he said.

"When the Americans realised that Citibank was sponsoring an LC (letter of credit) to buy oil from Iran they asked the bank to withdraw. By that time the ship had docked at the port of Dar-es-salaam. So this guy said I can't off-load the oil. What was going to follow the country was a crisis bigger than what we saw. Was the President supposed to wait for Lifuka (Transparency International Zambia president) to go to tender? Here is a situation where there is a crisis at our hands. What do we do?”

And acting chief government spokesperson, George Mpombo, said that tender processes were followed to the book in the procurement of crude.
Mpombo, who is also defence minister, said President Mwanawasa intervened to avert a shortage of petroleum in the country.

“On September 20, 2007 the Cargo by Gallic Oil docked in Dar es Salaam but could not off-load because of some problems arising from a letter of credit between Gallic Oil bankers in South Africa and the supplier of feedstock based in Switzerland,” Mpombo said.

“It was from these delays that the country started experiencing shortages in petroleum products since Indeni could not refine and the capacity of the oil marketing companies to import through use of road and rail transportation could not sustain the flow of supply of petroleum products at very short notice.”

He further said it was at this stage that President Mwanawasa intervened by ensuring that the Bank of Zambia guaranteed the letter of credit to enable the supplier to off-load the cargo.

Meanwhile, Shakafuswa disclosed that all the mines had agreed to come on board over the renegotiation for new mineral royalties.

"People were saying that we were taking too long to start the negotiations for the increasing of royalties. We had to prepare ourselves. Those guys have international lawyers and if I take my permanent secretary for budget to go and negotiate, he will just be torn to pieces by the international lawyers.
So the Norwegian government gave us help to understand how to go about and negotiate and what I have gathered is that all the mining companies have agreed to come on board,” Shakafuswa said.

"We don't foresee any problems ...when the companies were coming into Zambia, they were telling us the prospects of getting copper and selling it was very expensive and they would not make a profit in a very long time but the trend has changed.
When we negotiated the mining development agreements at the time, prospects were grim but now since the prospects are bright, we expect them as well to honour and give respect to the people of Zambia.”

And Shakafuswa said some Catholic bishops should not appear to be willed by God because they were also men of the flesh and the government was aware of some of their activities.

He said it was wrong for some Church and civil society leaders to behave as if they were more of people's representatives than politicians because politicians got their mandate from the people.
"I haven't heard Lifuka or Archbishop Mpundu being elected.

Bishops are also humans, all of us have got skeletons in our bodies," he said. “As government, we have eyes that see through bedrooms and we know what skeletons people have, we even know the outspoken bishops who have children but I will not mention them. They are running homes; they shouldn't say they are willed by God because they are men of the flesh. You all know what happened to archbishop Pius Ncube (Zimbabwean archbishop).”

He also questioned the relationship of some bishops with opposition party leaders such as Patriotic Front president Michael Sata.

"Are they talking on behalf of the people, or do they want to help the cobra (Sata) get into State House?” he wondered.
"The Church has a role to play but not where they stand in the line of fire, if they do I will hammer them," Shakafuswa warned. "Instead of being a bridge, they are hammering punches. The Church is irresponsible and they make ordinary mistakes and issue irresponsible statements."

He also attacked Lifuka for challenging President Mwanawasa to explain why the government opted for single sourcing of fuel.
"Lifuka should not talk to have people lose their jobs.

He should show us what relationship his wife has with Drug Enforcement Commission DEC. Let Lifuka chew cheap money from TIZ. He is not an expert in anything. He should have come to ask government instead of just bubbling," Shakafuswa said.

But Lifuka said it was unacceptable for Shakafuswa to drag his family into his (Lifuka’s) anti-corruption work.

“I would not honour his statement by commenting on it. If he is man enough, he should not drag my family into this issue,” Lifuka said. “I don’t go round to talk about Shakafuswa and that he has children outside wedlock. I don’t go round to talk about his background because it is dented. It is only a drunk man who usually claims that he is not drunk.”