VITOL UNFOLDING SCANDAL 3 : How procurement is taking shape

A highly controversial conflict of interest has been cited in the proposed contracting of oil products supply guru Vitol, in which the company seeks to monopolize a multibillion shilling deal to supply oil products to Uganda.

According to confidential sources, the drive by the biggest oil products brokerage company is laced with several irregularities, and they argue its entry into the Uganda market will cost the government over Shs368 billion in a year.

The proposed interest to enter the market came to surface after the Energy Minister Ruth Nankabirwa Ssentamu tabled a bill in Parliament, seeking to have the importation and supply of oil products centralised under the Uganda National Oil Company, UNOC.

Indeed, on November 2, the Minister tabled the Petroleum Supply bill, aiming at what she described as streamlining the supply of oil products to the hitherto importers and suppliers, the Oil Marketing Companies, otherwise known as OMCs.

Should Nankabirwa’s bill get enacted by parliament and assented to in its current form, industry players say the move will see all oil related operations shift from Kenya to Tanzania, in the process costing government billions through among others transport and handling, which will double mainly because of road transport as the only means of supply from Dar es Salaam to Uganda’s oil storage facilities that are majorly located in Jinja, Kampala and Entebbe. Other minor storage facilities are said to be located in Hoima, among other areas.

Making impassioned arguments, the industry sources also pointed at conflict of interest developments in the entire process, citing the employment of the services of top law firm that was reportedly involved in drafting the bill, that was presented by Nankabirwa.

This, they argued, was not a best practice undertaking by the law firm, given that the top-notch firm.

Meanwhile, in a related development, another irregularity has been given by insider sources that chose to remain anonymous given the sensitivity of the matter.

According to the sources, there is an alleged $20 million bribe that was offered to city Wheeler Dealer, a one Abu M, to wet the beaks of top all those involved, the latter to turn a blind eye when the bill is passed. Indeed, the sources intimate that Abu M was since advanced $10 million to facilitate the incidentals that might arise from any stormy waters, precipitated by nosy people that might stand its way. The second batch of $10 million, sources said, will be handed over to Abu, possibly for sharing with the most effective proponents of the deal, should it succeed in Parliament and then be assented to by the President.

Further, industry sources say the use of Abu M to pursue the multimillion dollar deal is thanks to his previous involvement in investments by big global Telecom players, notably Huawei Technologies and French mobile telecommunications giant Orange, both of who injected millions of dollars in their respective sector of interest.

Meanwhile, sources intimate that Wheeler Dealer Abu M has intensified his drive to access the powers that be by making friends and enlisting the services of the president’s close associates, in his bid to access information about huge impending government projects.

“Actually, he buys them houses and land, including getting them access to moneyed boyfriends and girlfriends, to further his interests,” the sources alleged.

The government also hopes that UNOC’s involvement in the importation supply chain will generate additional revenue to finance other infrastructure projects that UNOC has a vested interest in on behalf of the State.   The amendment also seeks to authorize the Minister of Energy with the approval of the Cabinet, to nominate any other person to import petroleum products for the Ugandan market.

It is hoped that the proposed changes will improve the security of the supply of petroleum products for the Country. Uganda has on many occasions faced severe fuel shortages leading to a hike in prices.     So the government is of the view that the change in the law and policy will contribute to the reduction of the pump prices by eliminating unwarranted transactions in the supply chain.