The National Oil Company of Malawi (NOCMA) has come under scrutiny over its decision to award a single-source fuel supply contract to Sheikh Ahmed Bin Faisal Al Qasimi (HH) to mitigate an impending fuel shortage.
NOCMA’s Chief Executive Officer, Clement Kanyama, appeared before the parliamentary budget and finance committee to justify the procurement process.
Kanyama attributed the decision to the challenges posed by forex shortages, which hindered the importation of fuel.
He revealed that NOCMA opted for HH’s supply due to the company’s willingness to accept payment in Malawi Kwacha, alleviating the forex burden.
The single-source arrangement received approval from both the Public Procurement and Disposal of Assets Authority (PPDA) and the Malawi Energy Regulatory Authority (MERA).
Kanyama emphasized that a financial evaluation demonstrated the overall cost per metric ton for procuring and contracting with HH was lower than the comparable largest fuel suppliers.
NOCMA’s move to award the contract without competitive bidding raised eyebrows, prompting the parliamentary probe.
Critics argue that single-source contracts undermine transparency and accountability.
However, NOCMA’s vision is to make Malawi’s oil and gas secure.
The company aims to manage the country’s Strategic Fuel Reserve Facilities (SFRs), promote competition in the oil and gas industry, and explore oil and gas opportunities.
In recent developments, NOCMA has made strides in improving fuel transportation infrastructure.
The company has invested in rail connectivity, reviving the Beira-Marka route after 41 years.
This move is expected to reduce transportation costs and increase efficiency.
As the probe continues, NOCMA’s decision to award the single-source contract will undergo intense scrutiny.
The company’s commitment to transparency and accountability will be crucial in resolving the issue.
The outcome of the probe will have significant implications for NOCMA’s operations and the country’s energy landscape.
By Twink Jones Gadama
