HARARE – State-owned Central Mechanical Equipment Department (CMED) has suspended the importation of duty-free fuel for selected private companies following an exposé of irregularities in the facilitation of import certificates.
This comes as the Transport ministry had given CMED the right to grant duty exemptions to selected private companies, a reprieve usually availed exclusively to government departments under Statutory Instrument 184 of 2014.
This comes as the parastatal is facing a protracted battle to recover $3,8 million in a botched fuel deal.
“We facilitate importation of fuel for companies as per instruction of ministry,” CMED managing director Davison Mhaka told Parliament’s Mines and Energy portfolio committee yesterday.
“ . . . these companies are carrying out projects that have been given national project status, so they approach government and the government facilitates the issuance of duty-free certificates,” he said.
Mhaka said in 2016, CMED facilitated the importation of over a million litres of duty-free diesel for ACF at a commission of $0,03 per litre.
It also emerged that the Defence ministry had granted authority to private players, Bell Petroluem, to import its fuel duty-free, which legislators felt raised the spectre of fuel being sold on the black market.
The committee’s chairperson, Daniel Shumba, was miffed at the inconsistencies and lack of due process.
Mhaka acknowledged that CMED was acting outside the bounds of its authority and that facilitating duty-free fuel to private companies was illegal.
He said he had assumed a letter from the Transport ministry was sufficient legitimacy.
“With immediate effect, we are not going to process all the paperwork until what has been discussed here is communicated to the ministries concerned and there is a legal instrument allowing us to do so,” Mhaka said.
Shumba said he found it odd that Mhaka had been reappointed as CMED managing director on January 3, and 17 days later, signed the edict from the Defence ministry to source its fuel through Bell Petroleum.
In April last year, Mhaka was dragged to the courts over his alleged involvement in a fuel scandal which prejudiced the State-owned company of $3 million.