Gas – CIP criticizes the process of selecting companies to manage energy in Mozambique

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Gas – CIP criticizes the process of selecting companies to manage energy in Mozambique

5:48 CAT | 21 Mar 2017

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The Mozambican Centre for Public Integrity (CIP) said yesterday that the process of selecting companies for energy management in the country was not transparent and that some of the companies had a dubious history.

“This tender has shown that the government has no strategic vision on how it intends to use its share of natural gas, leaving companies to decide on the expected impact of the projects, their location and even the amount of gas needed when, in fact, it should be designed to meet the objectives set by the Government,” the CIP writes.

In an analysis note on the public tender for the “selection of companies for the design, investment and development of projects such as electricity generation and production of fertilizers and/or liquid fuels for consumption in Mozambique”, the CIP also criticizes the choice of companies, which is says has not been transparent.

Of the 14 companies that submitted proposals by November last year, “only three companies, namely LG Energy Africa, Shell Mozambique BV and Yara International, were selected for energy, fertilizer and liquid fuel projects, respectively, for a total of 461 million cubic feet” (you may read the INP announcement (PDF) here).

The CIP notes that “the aspects that determined the approval of the proposals of the three foreign companies and the rejection of the other 11 competing companies are not public knowledge”, and regrets that the National Petroleum Institute “in its one-page announcement of the results, simply presents the three companies and the quantities of gas requested, as well as its purpose”.

In addition to doubts about the ability of the competing companies to live up to expectations, CIP also says that “the tender was launched while crucial aspects such as price had not been properly defined, taking into account that the pricing model for natural gas for the domestic market is not yet in the public domain and considering that the success of the projects approved depends greatly on the prices at which the natural gas for that purpose will sell”.

The CIP is a non-governmental organization whose purpose is to promote integrity, transparency, ethics, good governance and human rights in Mozambique.

You can access the full report (PDF format) here.

Source: Lusa