Press Center | Freight Shipping Logistics News
The crisis that followed the failure by the little-known Prisko Petroleum Network Limited (PPNL) to supply Nock with 132,000 metric tonnes of automotive gasoil, even after being paid Sh90 million as deposit, precipitated nationwide shortages that in part forced a rise in fuel prices.
Nock eventually imported 56,500 metric tonnes of diesel on Tuesday, March 1, through a different supplier, Galana. Despite the consignment of fuel arriving within the 14-day delivery window granted under the rules of the Open Tender System (OTS), public funds had been lost.
The corporation’s managing director Sumayya H. Athmani told the Sunday Nation that she could not comment on the matter in greater detail since it is before the courts.
“The National Oil Corporation has sought legal redress on the matter and is confident that this matter shall be resolved to its logical conclusion. Unfortunately, we cannot comment in detail as this matter is before a court of law,” she said.
In hindsight, it looks as though Nock’s top management was asleep at the wheel or had little supervision, as they crafted private partnerships that allowed the State oil marketer to move Sh90 million to a private company’s account without any safeguards and in total disregard of the Public Procurement Act.
The procurement law requires that such money be deposited in an escrow account controlled by both parties until conditions for delivery are met.
The news comes even as speculation mounts that Nock could have passed this cost on to consumers in a subsequent consignment it sold to other oil marketers and which was also disputed, as it was expensive.
The local Prisko (which is not related to a Russian oil firm with the same name) has two directors — Isaac Kombo and Naftali Muriithi. In its own words, Prisko estimates its market share at a conservative 0.1 per cent.
Mr Kombo told the press early this year that he was unaware of the deal between his company and Nock.
“I don’t know anything like that,” Mr Kombo was quoted as saying.
In a letter dated April 18, addressed to Mr Kombo and Mr Muriithi and signed by Ms Athmani, Nock says Prisko entered into a contract dated February 9, 2011 for purchase, supply and delivery of 132,000 metric tonnes of automotive gasoil but failed to deliver.
“Your failure to deliver the said commodity on time or at all is a breach of the aforementioned contract. We hereby demand your admission of liability within the next seven days failing which we shall institute legal proceedings against you for compensation for any losses incurred by the corporation, damages and other costs.”
Two sources knowledgeable about the deal independently confirmed that Prisko has not admitted liability as demanded by Nock, while the State oil marketer is yet to institute any legal proceedings fearing an implosion of the case could lead to a scrutiny of the process through which the tender was awarded and expose top company executives to lawsuits.
“This means Prisko can comfortably stay with the Sh90 million for as long as it likes or not refund the amount at all because Nock can only plead from the background,” says a source at Nock, adding that only two top executives at Nock, who have political connections, knew about the secret tender.
But Ms Athmani denied Nock broke the Procurement Act in responses to the Sunday Nation, insisting the corporation won the tender to import diesel on January 25 as per the OTS terms and conditions. “It then went ahead to procure a supplier for the consignment as per procurement procedures and requirements and selected the most competitive bidder, Prisco.”
She denied political interference.
PARASTATAL heads who signed the Mombasa port community charter risk being sacked if their agencies do not deliver on the contents of the new entity. The charter signed between the government and the private sector aims at improving the movement of cargo from the port into hinterland