THE Parliamentary Public Accounts Committee (PAC) has heard that as at October 31, 2021, over K180 million has been paid to Kinglong Motors (Z) Limited, a subsidiary of Higer Bus Limited, for the procurement of 100 mechanical horses and fuel tankers meant to be distributed to identified youth groups which lacked adequate experience.

And the Committee has heard that the Ministry of Youth, Sport and Arts spent over K2.4 million on workshops and allowances to develop a communication strategy which has not materialised.

Appearing before the PAC Thursday, Ministry of Youth, Sport and Arts Permanent Secretary Kangwa Chileshe admitted the beneficiary groups lacked capacity to handle the business.

“At the time of procurement of the mechanical horses and fuel tankers, the preparedness of the beneficiary youth groups to run the business of transportation of petroleum products was questionable in that most groups comprised youths who had no experience or capacity to manage the specialised trucks and to source petroleum products to transport,” Kangwa said.

He, however, said as a corrective measure, the new government had begun conducting training for the youth groups which benefited from the fuel tankers.

“The Ministry procured 100 mechanical horses and fuel tankers for onward distribution to various youth groups. As at 31st October, 2021, amounts totalling K180,233,603 had been paid towards the purchase of 100 mechanical horses and fuel tankers. It was established that there was a deficit of fuel tankers in the country thereby necessitating the empowerment of fuel tankers. As observed by the Auditor General, the Ministry has held capacity building meetings for all beneficiary youth cooperatives/groups while Oil Marketing Companies have also continued the hands-on training of the groups,” Chileshe said.

Kangwa said as at February 10, 2022, K12 million had been paid to Kinglong Motors (Z) Limited as part of balance owed by youth groups since they had not adhered to their contractural obligations.

“The Ministry signed a memorandum of understanding to procure 100 buses. However, only 25 buses had been supplied by Higer Bus Limited, leaving a balance of 75. The Committee may know that the Ministry negotiated with the supplier to supply fuel tankers instead of buses with similar contractual terms and conditions and it was concluded that the price of a fuel tanker was cheaper than a bus. Hence, the decision to procure the 50 fuel tankers from Kinglong Motors (Z) Limited, a subsidiary of Higer Bus Limited. The supplier proved to be the most favorable hence writing to ZPPA for authority to directly bid Kinglong Motors (Z) Limited for the supply and delivery of the fuel tankers instead of buses, which authority was granted on 16th September, 2020,” he said.

“The contract provided advance payment of 50% of the price to be paid by the Ministry and the balance of 50% to be paid by the beneficiary youth group or cooperatives within 12 months after the receipt of goods. However, although the trucks were received in April, 2021 as at 31st October 2021, seven months after the receipts of the trucks no funds had been remitted by the beneficiaries. The nonpayment of the balance was as a result of the delay in operationalisation of the fuel tankers such as registration, signing of MoU, procedures in clearance and certification from ERB and RTSA. The Committee may with to note that as of 10th February, 2022, my office had remitted a total of K12,000,000 to Kinglong Motors (Z) Limited towards the 50% balance leaving a balance of K72,227,202.00.”

Meanwhile in response to the Auditor General’s revelation that the Ministry of Youth, Sport and Arts procured 75 mechanical horses and fuel tankers without authority from the Secretary to Cabinet, Kangwa said it was the Ministry’s understanding that Cabinet Office had approved.

“While the Ministry wrote to Cabinet to seek authority to procure 25 fuel tankers in 2021, it also sought guidance from Cabinet Office on how to proceed with the entire procurement system for use under the youth empowerment programme. In their letter dated 19th April, 2021 Cabinet Office guided that once the funds are set to be given as youth empowerment through procurement of materials which would be given to youth beneficiaries as loans, such items will eventually become private items and as such, these items would not be sitting on government inventory and not for government official use. So it was of the Ministry’s understanding that Cabinet Office had guided that the fuel tankers will be given as loans to youth beneficiaries hence proceed with the alternative procurement for disbursement of loans,” Chileshe said.

Meanwhile, the PAC further heard that the Ministry of Youth, Sport and Arts spent over K2.4 million on workshops and allowances to develop a communication strategy which has not been seen as at October, 31, 2021.

And in response, Kangwa assured the Committee that the ministry had now started the process of developing a communication strategy and hoped to complete before the end of 2022.

“The Ministry was required to develop a robust and comprehensive communication strategy by December 2020, which was to publicise all government youth empowerment programmes. In this regard, a budget provision of K2,500,000 was made and funded. The Ministry spent amounts totalling K2,498,150 on activities such as meetings, workshops allowances and administrative activities,” said Chileshe.

“However, no communication strategy had been developed as at 31st October 2021. However, I would like to say that the Ministry has started the process to develop the communication strategy. And as far the terms of reference have been developed. However, the committee may wish to note that the Ministry will finalise the development of the communication strategy before the end of 2022.”