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Zambia: Prosecution witness in Masebo case says corruption should get a minister concerned


Sunday Post

By Namatama Mundia   |   Updated: Aug. 22, 2015

A PUBLIC procurement expert on Thursday testified in the Sylvia Masebo abuse of office trial that a government minister should get concerned when something goes wrong in a ministry.

Testifying before Lusaka magistrate Ireen Wishimanga, in a case where Masebo is facing allegations of cancelling wildlife hunting concessions and dissolution of ZAWA management whilst serving as tourism minister, Ministry of Community Development, Mother and Child Health head of procurement, Kenneth Mapani also said the public procurement law does not say the minister had no role in procurement issues.

Mapani, who until March 30 was the principal officer-in-charge of inspections and standards at the Zambia Public Procurement Authority (ZPPA), told court during cross-examination by defence lawyer Robert Simeza that he was ignorant on how the ZAWA issue started and ended.

He said he never played a role in the ZAWA procurement process and did not follow the proceedings concerning the case.

Mapani said a procurement process could be cancelled, adding that that was why he referred the ACC officers that approached him on October 8, 2014 wanting to get clarity on the procurement of hunting concessions as well as the applicable process in procuring such a service, to section 22 and Regulation 24.

Mapani earlier testified during evidence-in-chief led by ACC prosecutor Boniface Chiwala that the process was supposed to be advertised in the public media to would-be bidders.

“I drew them [ACC officers] to section 22 (1) F of the Public Procurement Act of 2008 as well as regulation 24 of the Public Procurement regulation of 2011. I further did indicate that what the Act and Regulation indicate is that such a mandate is vested in the approvals authority,” he said.

Mapani explained that the approvals authority was an individual or board that grant prior authorisation before any award is undertaken in public procurement matters.

Asked if a Minister of Tourism and Arts had authority to cancel a tender, Mapani said such cancellations were vested in the approvals authority.

“The honourable minister does not have a role in procurement proceedings, including the aspect of cancellation,” Mapani said.

He said the approvals authority under ZAWA was the procurement committee and the chief executive officer.

But during cross-examination, Mapani agreed that the law was silent on the role of a minister in procurement.

Further put to him that the law does not say that the minister had no role in procurement, Mapani again said that was correct.

Asked what he would expect a minister to do if something was going wrong in the ministry, Mapani said he would expect a minister to be concerned.

When told that a minister was not a passenger in the ministry or a ceremonial person who would just watch corruption take place, Mapani responded that a minister was part of the ministry and in that sense would be interested to know what was going on.

The state did not re-examine Mapani and the matter was adjourned to September 15.

Count one alleges that Masebo, between December 1, 2012 and June 30, 2013, in Lusaka, being tourism and arts minister, abused the authority of her office by cancelling the procurement process of tender number ZAWA/DG/002/2/12 for hunting concessions without following laid down procurement procedures, an act which was arbitrary and prejudicial to the rights or interests of the government.

In count two, it is alleged that Masebo, during the same period, in Lusaka and while serving in the same capacity, abused the authority of her office by terminating contracts of employment for senior officers employed by the Zambia Wildlife Authority without following laid down disciplinary procedure, an act which was arbitrary and prejudicial to the rights and interests of the government and other persons.

And after court adjourned, Masebo, in the company of UPND vice-president Dr Canisius Banda, addressed a huge crowd of supporters that turned to offer her solidarity outside the Lusaka Magistrates’ Court Complex.

Masebo said people were concentrating on wrong things.

“So you can see that people are concentrating on wrong things; instead of fixing the blackouts, tavutika ma light kulibe mu mayadi yathu, bathu basiliza time witch-hunting and prosecuting or persecuting political opponents,” said Masebo.

Tanzania: ENOC Africa Wins Another Tender to Import Fuel


Tanzania Daily News via AllAfrica 

A TANZANIAN oil company, ENOC Africa, has won a tender to import fuel under the Petroleum Bulk Procurement System (BPS) for the month of October, this year.

The tender that attracted six oil companies including five foreign and international companies, was awarded to ENOC Africa after offering the lowest Weighted Average Premium per Metric Ton of 45.771 US dollars per MT.

Other companies (all international) that participated in the tender include Addax Energy SA which quoted 49.18 US dollars per MT, Augusta Energy SA (48.854 US dollars per MT) and Gapco (K) Ltd (47.543 US dollars per MT).

Speaking about the tender results at the weekend of which the company will import 299,872 Metric Tons of fuel, Petroleum Importation Coordinator (PIC) General Manager, Michael Mjinja, said ENOC Africa was pronounced the winner after meeting all the tender requirements and proving that its offer would benefit the country, traders and consumers.

“Among the six oil companies, only four returned the tender documents and finally the winner (ENOC Africa) was picked. ENOC Africa is the only locally registered company and the consignment it will import will be enough to serve the country for a period of one month and two weeks,” he said.

Mr Mjinja said it was delighting to see local companies like ENOC Africa coming up to pose a challenge to giant foreign international oil companies which had previously dominated the sector by frequently winning such tenders.

“BPS is the most transparent way of public procurement where the winning bidder is decided in the open before representatives of all bidders, everyone endorses the winning bidder,” said Mr. Mjinja.

 
 

ENOC Africa will import 156,863 MT of Automotive Gas & Oils (AGO), 115,490MT of Premium Motor Spirit (PMS – gasoline), 26,269MT of Jet A1 and 1,250MT of Kerosene.

“With the transparent manner in which the winning bidder is picked, oil marketing companies are satisfied with the process. They do accept decisions made openly and unanimously in picking the winning bidder,” said Mr Minja.

When contacted via phone on Monday, the Energy and Water Utilities Regulatory Authority (Ewura) Head of Communication and Public Relations, Titus Kaguo said that BPS has proved to be a system which both consumers and suppliers are happy with and has helped lowered pump prices for fuel, increased government revenue and restored some sanity in the oil trading business.

“The system has helped in improving quality of petroleum products, stabilized cup prices, improved taxation and has helped to reduce demurrages at the port.

Apart from transparency and increasing government revenue, the BPS has also assisted the country to save foreign currency used to purchase petroleum products,” he said.

ENOC Africa, which recently expressed its intention to heavily invest in storage facilities in Tanzania and neighbouring countries, has proved its ability to ensure sustainability in oil supply in Tanzania by winning the tender for the third time. Tanzania consumes about 1.54 million cubic meters per annum of petroleum products.

Nigeria approves N33bn intervention fund for meter procurement


Nigerian Tribune

by Gbola Subair

The acute shortage of electricity meters in the country will soon be a thing of the past as the Presidency has approved the sum of N33 billion intervention fund for its procurement.

The fund, which attracts a very low interest rate, will be made available to Distribution Companies (DISCOs) to buy meters and other electricity accessories with a view to bridging the meter deficit gap which is about three million yearly.

The Director-General of the Bureau of Public Enterprises (BPE), Mr Benjamin Ezra Dikki, speaking in Abuja, also gave an assurance that the fixed charge currently borne by electricity consumers in the country would be dispensed with as soon as power generation increases to an economically sustainable level.

The director-general, who said the fixed charge was a temporary measure, appealed to electricity consumers to bear the burden, as it would soon be abolished, noting that the country had an installed power capacity of 6,000 megawatts, but was generating only about 3,000 to 4,000 megawatts. 

The BPE boss stated that the revenue from the 3,000 megawatts was not sufficient to support the power infrastructure.

”When power generation increases, the fixed charge will go,” he maintained.

According to him, it was the initial sacrifice consumers had to make given the huge financial investment made by the new power investors who are yet to obtain adequate returns on their investments.

Dikki added that as what obtained at the initial stages of the reform in the telecoms sector, when the cost of   the Subscriber Identity Module (SIM) cards and telephone handsets was as high as N50,000 per SIM, “the electricity fixed charge will also crash.”

Dikki debunked claims of lack of transparency in the privatisation of Kaduna Electricity Distribution Company (KEDC) and the picture created of a conflict between Geometrics Power Group and Interstate Electrics Ltd, the core investor of Enugu Distribution Company.

On KEDC, he said the reserved bidder could only be invited to step in if the preferred bidder failed to pay.

He added that the preferred bidder was, within the time limit, to pay the 75 per cent balance of the bid price after an initial payment of 25 per cent had been made.

The director-general said it was wrong for anybody to call for the revocation of the sale, as the process had to complete before reversion to the reserved bidder could be made.

On Geometrics, Dikki explained that it had a 20-year contract with the Enugu Distribution Company to supply power to the Aba and Ariaria districts, which is not in contention.

“Both parties are aware of this but it baffles me when people go out to deliberately distort the facts. We don’t understand the hue and cry that Geometrics is short-changed in the transaction,” he said.

300MW solar tender cancelled in Zimbabwe


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Lloyd Gumbo Harare Bureau
THE State Procurement Board has cancelled the 300 Megawatts solar projects indefinitely after one winning bidder increased its price, while Zimbabwe Power Company (ZPC) failed to agree with two other firms that had been considered for the other solar plants.
This effectively leaves the government’s quest to find a quick solution to power crisis in the country in disarray as it had hoped that 300MW would be fed to the national grid by next year.

The SPB awarded a tender for a 100MW solar plant in Gwanda to China Jiangxi Corporation, which was the lowest bidder to specification at about $184 million.

However, they then made a U-turn by approving a request by ZPC to engage two other losing bidders — Intratrek Zimbabwe and ZTE Corporation — despite the fact that they had charged $248 million and $358,3 million respectively at the initial tender for 100MW project each.

The ZPC claimed the two firms had agreed to match the $184 million charged by China Jiangxi Corporation.

But correspondences seen by our Harare Bureau indicate that the SPB then cancelled all the three tenders.

SPB principal officer, Cledwyn Nyanhete, on July 31, 2014, wrote to China Jiangxi Corporation managing director cancelling the tender award after the firm requested to increase the price from $184 million to $207 million.

The firm argued that the new price included duties and taxes, a position the SPB dismissed, arguing that the costs were already catered for.

Nyanhete said the reasons for increased costs were not justifiable and in contravention of Section 39 (1) (b) of the Procurement  Act.

“Accordingly, through PBR 0001J of July 17, 2014, the State Procurement Board resolved that; PBR 0001 of January 16, 2014 in favour of China Jiangxi Corporation Ltd for funding, engineering, procurement and construction of 1x100MW solar power project at Gwanda/Plumtree be and is hereby cancelled for failure by the winning bidder to maintain their original tender price of $183,708,238.51 (inclusive of duties and taxes),” said Nyanhete.

“China Jiangxi Corporation for International Economic and Technical Cooperation Ltd should within 14 days of notification pay $900.00 administration fees in line with S.I 159 of October 12, 2012 for violation of Section 39 (1) (b) of the Procurement Act by misrepresenting a material fact in a tender process.

“The board further resolved that you be warned against violation of procurement procedures in future as this may result in sanction in terms of Section 32 of the Procurement Regulations being preferred against you.”

Nyanhete also wrote to Intratrek Zimbabwe P/L managing director on July 28, 2014, advising them that varying the technical partner for Intratrek Zimbabwe from Greenfield Solar Europa GmbH of Germany to Chint Electrical Ltd of China after the tender award was not consistent with primary conditions of mandated negotiations.

He wrote another letter to Intratrek Zimbabwe managing director and ZTE Corporation Ltd managing director on July 31, 2014, saying ZPC had advised the SPB that negotiations with the two firms had failed.

A procurement expert said the SPB should have opened the tender to other bidders soon after ZPC indicated that it wanted variation of the projects from the initial 100MW to 300MW.

“What has happened is that while the SPB may claim to be justified in making this decision, it should have never got to this situation because the tender should have been opened the moment ZPC said they wanted 300MW instead of 100MW,” said the expert.

“This has obviously resulted in almost a year being lost on something that should have been done properly from the word go.

“What is left now is for the SPB to open the tender to other people with a varied requirement of 300MW than the initial 100MW. They cannot award it to any of the three firms without opening it to public tender.”

Energy and Power Development Minister Dzikamai Mavhaire has been pinning hope on solar projects as quick solutions to the power deficit in Zimbabwe.

Zimbabwe’s power plants produce about 1,300MW against a peak demand of more than 2,400MW.

South Sudan conflict drives idea of oil wealth monitoring


DefenceWeb

Written by Reuters, Friday, 01 August 2014

South Sudan’s oil fields have become a battleground in the struggle for power in Africa’s newest nation, encouraging Western nations and regional mediators to consider international monitoring of crude revenues as a way to remove a major bone of contention from such conflicts.

South Sudan sits on Sub-Saharan Africa’s third-biggest crude reserves, and its oil fields were early targets in fighting that erupted in December and has rumbled on despite two ceasefire deals and U.N. warnings that a man-made famine looms.

It marks an alarming slide into dysfunction by a nation whose creation three years ago the United States hailed as a foreign policy success. Instead of lifting the nation out of grinding poverty, oil is blamed for stoking a war.

“If there is a clearer control of oil revenue, that may remove from the table one of the incentives over which people are divided or will fight,” said one senior Western diplomat, close to peace talks being held in the Ethiopian capital.

“How do you turn the resource question into a confidence builder as opposed to a conflict creator? That’s the challenge in negotiation,” he told Reuters.

Monitoring could range from putting oil earnings into an independently managed escrow account, which South Sudan rebel leader Riek Machar called for, to less intrusive mechanisms where allocations of revenues were checked.

Diplomats and regional mediators said monitoring revenues was gaining traction as an idea for discussion, though the mechanics of such a system and how the warring sides would be pushed towards a deal have not been determined.

“Monitoring of oil revenue is being discussed,” said another Western diplomat. “But the detail would need to be worked through.”

South Sudan’s oil output has tumbled by about a third to 160,000 barrels a day since the fighting began in December, but it remains the main source of cash for President Salva Kiir’s government both by selling crude and by borrowing against future earnings, digging the nation deeper into debt.

As of June 25, South Sudan owed $256 million to China’s National Petroleum Corp, which has 40 percent of a venture developing South Sudan’s oil fields, and a further $78 million to oil trader Trafigura.

It plans to borrow about $1 billion from oil firms in fiscal year 2014/15, equal to about a quarter of forecast revenues.

VIOLATION OF SOVEREIGNTY

Rebel leader Machar, who was fired as deputy president last year, said oil sites would be a “legitimate target” unless funds were put into a neutral escrow account pending any deal.

But President Salva Kiir’s government says such outside intervention would violate its sovereignty and insists it has not bought arms since fighting began.

“We are not the protectorate of anyone,” presidential spokesman Ateny Wek Ateny said. “We have the right to buy arms, but we haven’t bought anything since December,” he said, despite rebel claims of weapon shipments arriving in recent months.

Kiir and Machar come from rival ethnic groups, and the conflict has re-opened deep ethnic divisions in the country.

Monitoring revenues is on the table for talks sponsored by the regional African grouping IGAD, though diplomats acknowledge it can only be part of a broader deal on how to share wealth and power in the divided nation.

“This is one of the points of the agenda that has been put forward by IGAD negotiators, that is the management of national revenue and national resources,” Smail Chergui, the African Union’s Commissioner for Peace and Security, said on July 25.

“When the two parties will achieve that level of advancement in the negotiations, this (agreement) might come. It has the support of the international community,” he said in the Ethiopian capital, where peace talks are to resume on Monday.

South Sudan has already lost billions of petrodollars in its young life. Kiir wrote to 75 former and serving officials in 2012 seeking the return of $4 billion that disappeared since 2005. No significant amounts were repaid, diplomats said.

Though the country – the size of France – has almost no roads and only a third of its 11 million people can read, South Sudanese now watch more wealth frittered away on fighting than on building roads or paying for schools.

GAMBLING THE FUTURE

“Are we going to buy weapons or are we going to … put it into development infrastructure,” said Henry Odwar, a lawmaker who chaired parliament’s energy commission until June.

“As long as we don’t have the answers to that, we are just gambling our future now,” he said.

Talks in Addis Ababa to end fighting have made glacial progress since January. Two ceasefire deals have crumbled and a deadline of Aug. 10 for a deal on a transitional government is fast approaching with little sign of an agreement.

Fighting has killed at least 10,000 people, displaced 1.5 million and left a third of the population facing the prospect of famine as they have not planted crops.

“Famine is a real possibility,” said the second Western diplomat. “The leaders are not putting the needs of the people of South Sudan first. That must change.”

The United States and European Union have imposed sanctions on military commanders on both sides.

But Western diplomats say pressure for a deal on oil monitoring needs to come from the region, led by heavyweight neighbours such as Kenya and Ethiopia.

China, with its oil interests, would need to support the move, though diplomats said it had worked with the West during the crisis. Alongside China, other oil investors are India’s ONGC Videsh and Malaysia’s Petronas.

“If they can get the oil sector right, share the oil revenues in a much more inclusive manner, then that will dictate the country’s future,” said Luke Patey, author of a book on Sudan and South Sudan’s oil industry.

Algerians outraged over latest corruption accusations against state oil and gas behemoth


Fox News

March 3, 2013 / Associated Press

ALGIERS, Algeria –  Corrupt and gorging itself at the trough of Algeria’s vast oil wealth — that’s how most Algerians privately view the elites running the country. Yet few have been willing to say so publicly, until now.

New corruption scandals are shining a new spotlight on state oil company Sonatrach, which jointly with BP and Norway’s Statoil runs the desert gas plant that was the scene of a bloody hostage standoff in January.

A recent anguished public plea by a former Sonatrach official shocked Algerians and raised hopes that the leadership will try to clean up the oil and gas sector in Africa’s largest country.

There’s plenty at stake: Algeria is also one of the continent’s richest countries, as the No. 3 supplier of natural gas to Europe, with $190 billion in reserves, up $8 billion in the last year alone.

The Feb. 18 letter by former Sonatrach vice president Hocine Malti in the French-language Algerian daily El Watan broke the silence around the company. Addressing the shadowy leader of Algeria’s intelligence service, it asks if he is really serious about investigating new bribery scandals involving Sonatrach and Italian and Canadian companies.

When Italian prosecutors in January announced an investigation into oil company ENI and subsidiary SAIPEM for allegedly paying €197 million ($256.1 million) in bribes to secure an €11 billion contract with Sonatrach, it provoked a firestorm in the Algerian media, until the North African country’s justice system finally announced its own inquiry Feb. 10.

Malti, author of the “Secret History of Algerian Oil,” scoffed that Algerian authorities were only following the lead of international investigators and wondered if Mohammed “Tewfik” Mediene, the feared head of the Department of Research and Security, would allow the real sources of corruption to be tried in court.

“Is it too much to dream that some of your fellow generals, certain ministers or corrupt businessmen — members of the pyramid that you are on top of — members of this fraternity, might also end up in front of justice?” he asked in the letter. “Or will it be like always, just the small fry are targeted by this new investigation?”

“Will we have to continue to listen for news from the Milan prosecutor to know the sad reality of our country, to discover how certain people, whom you know quite well, people you have come across in your long professional career, have gorged themselves on millions of dollars and euros of the country’s oil revenues?” he added.

The response to the letter was swift. Energy Minister Youcef Yousfi promised that once an investigation was complete “we will take all necessary measures” against those harming the interests of the nation.

President Abdelaziz Bouteflika, who rarely appears in public, said in a written statement, “these revelations provoke our disgust and condemnation, but I trust the justice system of our country to bring clarity to the web of accusations and discover who is responsible.”

Malti told The Associated Press by telephone from his home in France that he wrote the letter partly out of anger that Algeria had to rely on foreign prosecutors to reveal the extent of its own corruption and addressed it to the head of intelligence to shock people.

“It made a lot of noise because with this letter, I broke a taboo,” he said. “The head of the DRS is an unapproachable figure in Algeria, at times we can’t even pronounce (say) his name.”

It is not the first time the state-owned hydrocarbon company, which provides Algeria with 97 percent of its hard currency earnings, has been enmeshed in scandal.

In 2010, its head, three of its vice presidents and the minister of energy were all fired in a corruption investigation run by Mediene’s intelligence agency.

However, rather than restore faith in the country’s corruption-fighting mechanism, the 2010 purge was widely seen as a chance to settle scores between the DRS and Bouteflika, since most of those fired were his close associates.

Algeria ranks 105 out of 176 in Transparency International‘s 2012 corruption index, and the occasional corruption investigation often just seems to be how the elites settle their scores, such as a string of revelations about prominent politicians in November, which observers said were linked to next year’s presidential elections.

“I realize that people might be shocked by what is happening at Sonatrach — these scandals are terrible and we condemn them as individual acts,” Sonatrach head Abdelhamid Zerguine said on the radio Sunday, the anniversary of Algeria’s 1971 nationalization of its oil industry from the French. He promised to fight further corruption “with utmost vigor,” even while denying it was systemic.

The scale of the scandals is staggering. Nearly €200 million ($260 million) was paid out by the Italians, according to the Milan prosecutor. ENI has pledged full cooperation with prosecutors in their investigations.

Meanwhile, according to a joint investigation by Canada’s Globe and Mail newspaper and an Italian business paper published Feb. 22, Canadian company SNC-Lavalin paid a series of bribes of its own to secure a $1 billion engineering contract. Company spokeswoman Lilly Nguyen responded to queries about the case saying “to the best of our knowledge, SNC-Lavalin is not specifically under investigation in the Sonatrach matter.”

With commissions on deals like this going to the highest levels of power, the Algerian press rarely reports about it — until the subject is broached by the foreign media.

Malti, who was there at the founding of Sonatrach in 1963, estimated that the country was losing between $3 and 6 billion annually to corruption in the oil sector alone.

“If a judge says that an inquiry has opened or even a minister promises to take measures against ‘people working against Algeria’s interests,’ I don’t believe them,” Mohammed Saidj, a professor of international relations at Algiers University, told the AP. “It’s just words to appease a public opinion shocked when it hears about the corruption and billions of dollars stolen by high-level political and military officials, including those close to the president.”

The chances of this situation changing are dim, considering how much the country relies on a single company.

In a chapter on Sonatrach in the 2012 book “Oil and Governance,” John Entelis, an Algeria expert at New York’s Fordham University, described the importance of a company established just a year after Algeria won its independence from France, and wrote, “Algeria’s governing elite rely upon Sonatrach for revenue from which they gain power, patronage, and privileges.”

Entelis told AP that the letter in El Watan shows that Algerians are increasingly able to complain about this system, even if that won’t necessarily change things.

“This is the heart of the Algerian political system — Sonatrach, the DRS, civil society in the form of … willingness to make these things public. Some say this is what enables it to maintain itself instead of collapse,” he said.

___

Paul Schemm reported from Rabat, Morocco. Associated Press writer Karim Kebir contributed to this report from Algiers, Algeria.

Manhattan Corp awarded R160m Ethiopia EPCM contract


Mining Weekly

By Nathalie Greve

January 14th, 2013

JOHANNESBURG (miningweekly.com) – Local mining services provider Manhattan Corporation would undertake a R160-million contract to build a 25 000 t/m carbon-in-leach (CIL) gold plant, in Mekelle, in Ethiopia, for industrial group Ezana Mining and Development.

The contract would see Manhattan supplying the gold plant on a turnkey basis and included design, engineering, procurement, shipment, construction, installation, implementation, after-sales skills development and support, with an optional offtake contract.

Work on the operation began earlier this month and the plant was expected to be operational by the end of the year.

The company added that the plant process would incorporate crushing, milling, leaching, carbon absorption, washing, stripping, elution, electrowinning and smelting.

“Manhattan is committed to incorporating Ethiopian suppliers, manufacturers and content to maximise job creation and economic development in that country,” Manhattan FD Theo Pouroullis said in a statement.

The plant would incorporate several innovative technologies, including optimised leaching and air-sparging, as well as adaptable feed to the comminution circuit to allow for improved plant availability, up-time and increased final gold production.

The technology provided incorporated CIL and carbon-in-pulp, which consisted of a series of tanks enabling adequate residence time.
The first two tanks would be used for leaching while the remaining six would be used for leaching and absorption.

Manhattan also recently concluded a plant expansion feasibility study for a Glencore subsidiary, in Australia, which involved an assessment of the increase in processing capacity for the operation and a reduction in the overall operating costs.

Additional recent projects included the development of a three-dimensional underground resource development and mine plan for the Manhattan-owned Gravelotte gold mine, in South Africa, which increased the resource from previous inferred resource estimates to a one-million-ounce probable gold reserve.

Edited by: Chanel de Bruyn

Analysis: New law fails to ease oil concerns in Uganda


IRIN NEWS

KAMPALA/NAIROBI, 13 December 2012 (IRIN) – Uganda’s parliament recently passed a law to govern the exploration, development and production of the country’s estimated three billion barrels of oil, a resource whose extraction will directly affect the livelihoods of tens of thousands of people.

While the law streamlines the burgeoning industry, analysts have raised concerns over transparency and over who controls the sector.

“The new law helps set clear guidelines under which the oil sector is to be run and managed, and makes clear who is in charge of what roles,” said Tony Otoa, director of Great Lakes Public Affairs (GLPA), a Uganda-based think tank focusing on oil and governance. “However, there are some concerns about transparency and too much power within the oil industry in the hands of the president.”

The bill was passed on 7 December after weeks of wrangling over its controversial Clause 9, which gives the energy minister wide-ranging powers, including authority over the granting and revoking of oil licenses, negotiating and endorsing petroleum agreements, and promoting and sustaining transparency in the petroleum sector. Many members of parliament (MPs) felt these powers should be held by an independent national oil authority.

“Essentially, the standoff, which has ended, was about the withdrawal of trust from a government that is battered by corruption scandals. Also the way the cabinet operates is that, in the past, the feeling has been that some key ministries, like finance, are effectively run by the presidency after being stuffed by yes-men or -women. The pushback against Clause 9 also comes as the Central Bank opened its vaults to a large withdrawal in 2010 [US$740 million to buy six fighter jets] only for approvals to be sought retrospectively,” said Angelo Izama, a Ugandan journalist and oil sector analyst.

“Loss of trust”

“This loss of trust is behind the resistance to greater control by the executive,” he added. “The executive has not been a bad shepherd of the process so far. Uganda’s negotiating position has been tougher with the oil companies, ironically, without the oversight of parliament. However, public scandals elsewhere have negatively affected the ability of the president to convince lawmakers – especially of his party – that he means well.”

A number of donors – including the UK and Ireland – recently suspended aid to Uganda following allegations of deep-rooted corruption in the Office of the Prime Minister. The prime minister, the former energy minister and the foreign affairs minister were all accused of taking kick-backs from oil companies in 2011, charges that remain unproven but that nevertheless damage the reputation of the government.

“The country lacks trust in the state… Institutions and officials have lost legitimacy, and for such an important bill to vest too much power into a political appointee is a recipe for disaster,” said Stephen Oola, a transitional justice and governance analyst at Uganda’s Makerere University Refugee Law Project.

“Granting and revoking licenses and negotiations are technical in nature. We need an independent commission or authority made up of people of good competence, technical ability and experience, and good morals to guard our oil,” said Frank Gashumba, a local businessman and social activist.

Proponents of Clause 9 say licensing powers are safer in the hands of the cabinet than under an oil authority. “The authority is open, easy to bribe and manipulate. Cabinet is bigger than the authority – members of the executive are answerable to Ugandans because they are elected leaders,” said Kenneth Omona, a ruling party MP.

Those opposed to it say they will challenge the law, which was passed with 149 votes in favour and 39 against; some 198 MPs did not turn up to vote.

“The fight is not complete; the passing of the bill is liable to be challenged in courts of law,” said Theodore Ssekikubo, ruling party MP and chair of the parliamentary forum on oil and gas. “If we fail to go to court, we shall subject the matter to a referendum for all Ugandans to pronounce themselves on this strategic resource. We want to ensure transparency and accountability in the oil sector.”

Transparency

There are also concerns about the law’s confidentiality clause, which limits the amount of information accessible by the public.

“The law is lacking transparency – it imposes confidentiality on officials working within the sector, even after they leave office, so there is no opportunity for whistle-blowing or for the public to have access to information on, say, production-sharing agreements,” GLPA’s Otoa said.

He noted that Uganda still hasn’t joined the Extractive Industries Transparency Initiative (EITI), an international scheme that attempts to set a global standard for transparency in oil, gas and mining, further compounding the sector’s lack of transparency. As a member of the EITI, Uganda and oil companies involved in the country would be required to publish all payments and revenues from the industry.

While Total and the China National Offshore Oil Corporation (CNOOC), two of Uganda’s major oil partners, are listed on Wall Street and are therefore subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act – which requires disclosure of payments relating to the acquisition of licenses for exploration and production of oil, gas and minerals – the Irish firm Tullow Oil, another of Uganda’s main oil partners, is not under any similar obligations.

“I am worried we [legislators] and the public can’t access and scrutinize these agreements. You can imagine the recently negotiated and signed oil agreements have not been accessed by the public, not even by members of parliament,” Beatrice Anywar, former shadow energy minister, told IRIN.

The impact of the oil sector has so far been most acutely felt by communities around Lake Albert, thousands of whom have had to move – some willingly and some forcefully – to make room for an oil refinery, which is expected to take up 29sqkm and displace some 8,000 people.

Land issues

“The government is prosecuting the refinery resettlement by the book. However, managing public expectations and the process of multiple decision makers in Uganda’s complex land legal system [Uganda has multiple land systems, including customary, leasehold and freehold] has contributed some volatility to the process… What is adequate compensation? And who determines that? Is it the market or should this be done by the government?” said journalist Izama.

“As a partner to the oil companies, it’s questionable too if the government can make the best decisions for the affected people as it would look to keep project costs fairly low,” he continued. “It is still a dilemma which is jurisprudential as well as political.”

He noted that much of the oil is in game reserves and a sensitive basin with lakes, rivers and a rare biodiversity, and borders the Democratic Republic of Congo, which could also pose challenges for peaceful production; there has already been some tension between the two countries over their boundaries within Lake Albert.

“The process of consensus-building is still weak, and regardless of how it’s arrived at, displacements will create uncomfortable realities, including land and job pressure.”

According to Otoa, Uganda’s lack of a comprehensive land policy makes compensation issues more complex. “We need clear land policies to ensure people are properly compensated – there is a Resettlement Action Plan in place, but it has not been implemented, and a draft land policy has not been actualized, leaving these communities vulnerable,” he said.

He noted that the lack of education among the local population, both in the oil-rich areas and the rest of the country, had contributed to the continued problems in the sector.

“We have focused too much on educating MPs on the implications and importance of good oil governance. We need to move to people-centred approaches and encourage dialogue in the public sphere, which will lead to people demanding accountability from their MPs and the government,” he added.

Ultimately, Izama said, responsible actions by the government will be the difference between Uganda’s oil making a significant impact on the country’s economy or causing conflict and greater poverty.

“Pressure on public institutions prior to commercial oil production is an effective way of counteracting the resource curse. If this public engagement falters, if the transition [from President Museveni to his successor] is volatile, some of the scenarios of the so-called oil curse are possible,” he said. “Overall the tensions are high, but responsible actions by public and political institutions like the past debate show progress is possible.”

Standard Bank Group is leading investor in South Africa procurement process


PV-TECH.ORG

By Nilima Choudhury

November 13, 2012

South Africa’s Standard Bank Group has emerged as the leading investor in the first round of the country’s renewable energy independent power producer (REIPP) procurement process, backing a total of 11 solar and wind projects.

The South African government has allocated 1,416MW for this first round of the procurement process, worth about R47 billion (US$5.3 billion) of fixed investment, of which the majority, around R27 billion (US$3.1 billion), will be funded by debt.

Standard Bank Group will provide comprehensive corporate and investment banking services to all its clients in the REIPPP programme, including underwriting R9.4 billion (over US$1 billion) worth of debt, providing interest and currency hedges, carbon trading credits and corporate bonding and guarantee facilities.

The bank’s clients include 338MW of wind and 235MW of solar PV, out of the combined 1,416MW per year expected to be produced by all the projects. Standard Bank Group itself has also taken an equity stake in four projects.

Alastair Campbell, Executive Vice President, Power & Infrastructure Finance at Standard Bank Group said: “Standard Bank will be ready to disburse funding for most of the projects as soon as all documentation is finalised and hedges are closed.”

Developers will have until 16 November 2012 to finalise all their documents and foreign currency hedges, after which projects can be rolled out.

“This confirms that there is considerable appetite from developers and banks to invest in renewable energy projects in South Africa. Standard Bank has been involved in the emerging story of power generation from inception. We participated in the Integrated Resource Planning public hearings which re-affirmed REIPP procurement process as an accepted way of diversifying our energy mix and reducing carbon emissions,” continued Campbell.

Further bidding rounds are expected to take place roughly six months apart from 2013 onwards to allocate the total 3725MW. In line with the country’s long-term power plan, South Africa aims to secure a total of 17,800MW of renewable energy or 42% of South Africa’s new generation capacity by 2030.

Standard Bank Group said it is already preparing for the financial close of the second bidding window and is supporting the third bidding window. The second bidding window is expected to close in the first quarter of 2013.

“We have already committed a total of R6.1 billion of debt out of a total R19 billion to preferred bidders on the second bidding window. The second programme is smaller than the first and will have a total of 19 projects. Standard Bank is supporting preferred bidders on five of these projects,” said Ntlai Mosiah, Head of Power and Infrastructure SA Advisory and Coverage at Standard Bank Group.

“As the programme unfolds, an increasing number of benefits are expected for the South African electricity consumer. Chief amongst these is the expected fall in tariffs bid due to increasing interest and competition in the process. We are expecting that renewable energy prices will reach grid parity in the foreseeable future.”

Mosiah continued: “An aligned major benefit will emerge from increased local component manufacturing with its associated industrial development and job creation, an aspect that government has insisted should be accelerated.”

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