HomePoliticsNoczim fails to account for US$35m

Noczim fails to account for US$35m

Tendai Zhanje

THE Ministry of Energy and Power Development instituted a forensic audit into the National Oil Company of Zimbabwe (Noczim) after it failed to account for US$35 million fuel duty from independent importers.

Energy and Power Development minister Elton Mangoma made the revelation in the Senate on Tuesday when he responded to a question during his steering of the Energy Regulation Bill through its second reading.

“We instituted forensic audit of Noczim’s financial affairs after the management failed to satisfactorily prove where US$35 million fuel duty from independent importers had gone,” Mangoma said, “An internal audit failed to produce any answers hence the forensic audit whose report is now on my desk.”

Garnishing of the Noczim account by the Zimbabwe Revenue Authority (Zimra) and failure of a subcontractor to deliver US$5 million worth of fuel caused the intermittent fuel supplies experienced in the country from late December 2010 and early January this year.

“Zimra action caused the oil authority to face cash constrains to purchase strategic fuel reserves,” the minister said. “This was further compounded by failure of Noah, a South African oil company, to deliver US$5 million worth of fuel that it had been contracted to import to Zimbabwe in December 2010.”

The ministry’s permanent secretary, Justin Mupamhanga, said they were pushing Noczim to quickly recover the money advanced to Noah or receive fuel imported through the South African agent.

“What we are doing is to try and get our money back if they do not give us the fuel because we really did misread the data,” Mupamhanga said, “We were in a desperate state and I want to admit we bleeped, but what needs to be done is ask them to deliver or give us back the money.”   

Noczim had not done any due diligence on Noah prompting the Mines and Energy portfolio committee chairman, Edward Chindori Chininga, to conclude that the company may have been a shelf firm.

“US$5 million going to probably a briefcase company is a lot of money,” Chindori said. “I would have thought a company such as Noczim would know that they should deal with BP, Caltex or any of these established companies.”

Meanwhile, Noczim is offering golden handshakes running into hundreds of thousands of dollars to senior managers who are not willing to join any of the two successor companies after the completion of the oil company’s restructuring expected in the next few months.

Two companies will be born out of the Noczim restructuring exercise, PetrolTrade and National Oil Infrastructure Company (NOIC). PetroTrade will be in charge of running fuel service stations while NOIC will operate the Beira-Feruka-Msasa pipeline and other fuel storage infrastructure owned by Noczim.

A source at the oil company said managers were approached last week on whether they want to join the new companies or leave on generous terms.

“Negotiations for exit packages began last week,” the source said, “senior managers have an option to join any of the two successor companies on same conditions or better to the one offered at Noczim or take a generous exit package.”

The source added that: “Those opting for retrenchment will get their official vehicles, personal computers and lump sums in the region of US$200 000 each. The retrenchment package is tempting.”

The Independent is also reliably informed that shop-floor workers to middle management level will receive a package that runs into tens of thousands of dollars.

“The workers committee has worked a package that will see the highest paid in that group receiving up to US$100 000 as their golden handshake,” the source revealed.

Sources said Ken Chakanetsa would be the chief executive at NOIC.

“Chakanetsa will be joining NOIC from InPetro, a Mozambican petroleum outfit in which Noczim has shareholding. He is a chartered accountant by profession,” said the source.

Mines and Energy permanent secretary James Mupamhanga confirmed the development in an interview with this paper on Monday this week.

“In any event when a company restructures, a new manager will be hired and others will be retrenched,” Mupamhanga said, “The process started last week and we hope that it will be completed before the end of March, 2011.”
The permanent secretary was, however, not at liberty to reveal the retrenchment packages to be given to those leaving Noczim.

“It’s not fair to disclose their packages before the negotiations are completed,” he said, “The senior managers are handling the negotiations and we hope that soon a position would be reached.”

Noczim will become the first state-owned enterprise to be unbundled after cabinet last year agreed on a policy that spells out how the state will turn around companies that have become a drain on the national fiscus.

The company had made perennial losses in the recent past, particularly since 2000 when the company failed to supply sufficient fuel to the nation due to a combination of reasons – among them lack of foreign currency, corruption, maladministration and the general deterioration of the economy in the last decade.

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