BY JAMES MUNYANEZA

Also under probe in the same case are Commerce minister Protais Mitali, the ministry’s Secretary General Justin Nsengiyumva, director of planning and chairman of the internal tender committee, Felicien Murenzi, and the in-charge of petroleum transactions Robert Opirah.

Musoni initiated the process to procure huge amounts of fuel from to bail the country out of an early 2006 crisis. He was at the time still Commerce minister. He was however later transferred to the Finance ministry in March 2006, replacing the now Public Service minister Prof. Manasseh Paul Nshuti.

Musoni confirmed yesterday he recorded a statement with CID Chief Costa Habyara.

"I shared with him (Habyara) what I know about that process because it started while I was still there (at Minicom). The statement I gave concerns the background of that tender,” Musoni said during an exclusive interview. Interestingly however, whereas Musoni admits to having responded to questions from Habyara himself, the CID boss denies ever meeting the minister over the matter. Habyara on Tuesday emphatically denied that he interrogated Musoni although he has gone on record saying that his office investigated Mitali and the three other Minicom officials.

"I have never heard such information. Minister Musoni has never been questioned about that case,” he passionately told this reporter both face to face at his office in Kacyiru and later on phone. And efforts to talk to him yesterday following Musoni’s interview were fruitless as he repeatedly could not answer his cellular phone.

During the interview, Musoni said that the genesis of the now controversial deal dates way back in the early months of 2006. He said around late 2005, the government loaned fuel to some local suppliers from its strategic reserves. The government has petroleum storage facilities in Gatsata, and Rwabuye in the Southern Province; and they are mostly resorted to when there is an acute shortage of fuel in the country.

"In the early months of 2006, we experienced a fuel crisis because inflows at Eldoret (in ) had been blocked at the time. In addition, our petroleum storage facilities also have capacity  to stock fuel that can be supplied for only one month. It was purely a state of emergency,” recalled the minister.

He went on: "Due to that situation, we (Minicom) called a meeting with all local petroleum dealers and asked them if they could provide supplies that were needed to curtail the shortage. They said they too could not afford.

"We wrote to our Ambassador in (Bill Kayonga) asking him to urgently identify a company with capacity to supply us with 10 million litres of fuel. It is at that stage that I was transferred from Minicom.” The deal was worth $8 million (about Frw4.4 billion)

Asked why he took it upon himself to initiate such a process involving huge amounts of money without involving the National Tender Board (NTB), Musoni said: "It was extremely an emergency situation. We were racing against time to avoid a crisis.”

He said the law that was governing NTB at the time had no provision for emergency tenders. He however said that the new Public Procurement Code – which came into force this year – empowers the body to conduct emergency tenders.

Normally, according to sources, when a minister finds it impossible to wait for NTB’s tendering process in case of a crisis of such important needs as fuel, he or she must seek Cabinet’s approval before finalising transactions. Musoni had not briefed Cabinet about the intentions to acquire fuel from a firm.

However the minister said the mandatory time to secure a Cabinet nod had not come by the time he left Minicom.

"Surely, if I was still there during the advanced stages of the process, I would have secured Cabinet’s endorsement before signing the contract. I am however not pointing a finger to anybody since a precedence had occurred in 2004 when (then State Minister for Energy and Communication) Eng. Sam Nkusi was sent to to try and acquire fuel supplies in the same spirit,” explained the minister.

He said that at that time Nkusi travelled to and secured petroleum supplies without formalizing the procedure either through the NTB or the Cabinet. "I think Minister Mitali treated the deal in the same spirit as that earlier scenario.”

And when contacted yesterday Ambassador Bill Kayonga said Musoni indeed approached him sometime early 2006 over the petroleum supplies.

"What happened is that the minister called me and informed me that they had been disappointed by local suppliers. He told me that they were faced with a fuel shortage back home and asked me to try and identify alternative suppliers from who would supply fuel to . I think at that time they were targeting about 10 million litres,” he said.

Kayonga said that following that phone request, he approached some Kenyan companies requesting them to bid, but that a number of them were unwilling to export the product to . He said that finally, only Dalbit Petroleum Company expressed interest, and that he subsequently sent the company’s bid to Minicom.

By the time he sent Dalbit’s interest to the ministry, though he said he does not remember the exact date, Kayonga said Mitali had already replaced Musoni as the Commerce minister. He however said that he doesn’t know what transpired thereafter. Minicom is believed to have started direct negotiations with Dalbit around that time.

Meanwhile, sources say that CID and the office of the Prosecutor General are also investigating reports that Minicom officials connived with local petrol dealers – who are normally loaned fuel by the government during shortage periods – to pay back less than they took. Sources claim that there were cases when companies would pay back after a year.

This, sources say, creates a difficult situation for a smooth replenishment of the strategic fuel reserves.

 However, Musoni refuted that saying that companies normally pay back in not more than three months at the latest.

"Normally there is a contract between (the government and suppliers) signed whenever fuel loaning takes place. The supplier is supposed to pay back after  around a month or so, and it would automatically be a breach of contract if it gets to a whole year before returning the fuel.”

however, Musoni, also a commissioner in the ruling RPF National Executive Committee, said that the pay back period depends on the situation at hand. "Normally it shouldn’t go beyond two, three months. And even if they were to pay back in monetary form, it must be at the prevailing rate,” he said. "The crises we are talking about usually last not more than a month.”

He added that even recently another shortage almost hit the country, and that it took President Paul Kagame to personally request his Kenyan counterpart Mwai Kibaki to provide with a "special supply arrangement.”

He however said that the government is exploring various avenues to come up with a sustainable solution.

Among the possible solutions being mooted include construction of bigger and modern storage facilities with capacity to stock petroleum that can be supplied for up to six months. He added that the government intends to partner with the private sector to achieve that.

Another solution, he said, was to encourage local suppliers to put together their efforts and purchase fuel directly from sources in bulk.

This means that local suppliers would purchase fuel from such countries as and import it by vessel to . This, however, seems to be a long-term solution, and it would require the government to seek ’s help in transporting the imported fuel from to Eldoret, from where it would be transported to .

Meanwhile, the office of the Prosecutor General continues its investigations into the matter, and Mitali and his three junior officers have already appeared before Prosecutor Richard Muhumuza of Nyarugenge Prosecution.

Musoni joined Cabinet on June 8, 2005 as State minister for Industry and Investment Promotion after a long stint at Rwanda Revenue Authority as Commissioner General. He was elevated to full Cabinet minister in the same ministry on August 20, 2005, where he served for about eight months before taking over the key portifolio of Finance Minister.
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