Armies of Liberation

Jane Novak's blog about Yemen

Yemen rented electric generators for more than their purchase price

Filed under: Corruption, Electric — by Jane Novak at 10:06 am on Sunday, September 30, 2012

Every ministry is like this, the sums are enormous, but without holding anyone accountable (all crimes were forgiven in the amnesty), there is little incentive to change practices or be more transparent. Also this scam (where generators were rented for greater than the amount of purchase, and the funds allocated exceeded the amount billed) is coming to light via the SEMC not COCAO or SNACC.

The strain on the majority of the populace which lacks of electricity is tremendous. For the origins of the electric shortage, mismanagement and overt theft of allocated funds, see my category Electric. Its also pathetic that all these scandals are only receiving serious scrutiny years after I first wrote about them, whether its the Port of Aden, the oil smuggling, the LNG deal, the diversion of medical supplies; the point being grand corruption was never a secret, and the starvation now is not due to a lack of aid or money but corruption and malfeasance.

Economists and journalists accuse Minister of Electricity and energy of tampering funds allocated for providing power

The Studies and Economic Media center (SEMC) has urged the Yemeni government to uphold transparency in clenching power purchase contracts to offset the electricity shortage across the country.

The Center criticized the violations committed by the government when it bought a total of 60 megawatts over the past few months at the price of of 35.5 million to offset electricity shortage in Aden for two years.

The amount, which is much higher than the real value of the leased generators generating the purchased power, also includes 3.5 million in insurance to be paid for maintenance and fuel, it highlighted. It pointed out that the power bills handed over to Aden port and free zone customs authorities amounted to only 10 million while the value of the purchased power stood at 35.5 million dollars.

Customs documents indicate that the total cost of the rented generators stands at 25% of the purchased power value set forth in the contracts, it noted, adding that a total of 140 megawatts of electricity were purchased in favor of the governorates of Aden, Lahj, Abyan, Shabwa, Hadramout and Hodeidah.

The deal involves arithmetic errors as the total value of power bought by the government was calculated based on the rule that states: 20,000 kilowatts x 24 hrs x 0.03 cents = 10800 i.e. an increase of 8000 dollars from the real value, it further noted.

It stated that some generators, including those leased in the Abyan district of Ludar, had already gone into obsolescence, as the Yemeni-Saudi Cement factory had used them for two years and then decided to do away with them.

According to the documents, which were obtained by the center, the government refunded payable customs fees of four customs statements of some generators one year after they were paid under the numbers 35,43, 58, 59.

The generators were brought into the country through Aden free zone customs entry points in 2010, as three custom statement warranties were returned though the materials imported based on such guarantees were not re-exported.

The deal was signed based on a request from Agreeco and the public electricity authority, given that the latter needed to rent the generators and other items, which were imported in the name of the factory.

Though the authority is not liable to the customs exemption law set forth in the 2012 customs act (12). The real operating capacity of Ludar generators was only 10 megawatts , 5 megawatts less than the agreement stated, it concluded.

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