Swaziland King’s controversial oil storage project rises from the dead and could cost kingdom E3bn

The projected cost of building an oil facility in Swaziland (eSwatini), enthusiastically supported by the kingdom’s absolute monarch King Mswati III, has risen to more than E3 billion (US$170 million) even though it was reported that the contract to build it had been cancelled by the Swazi Government in 2017.

A strategic oil reserve facility to store about 90 million litres of fuel at Phuzumoya in eastern Swaziland was originally estimated to cost E900 million.

The Sunday edition of the Times of eSwatini reported a private company called Kantey & Templer had originally been contracted to build the facility but was dismissed from the project in October 2017.

Now, the Times said the project was continuing and so far E54.89 million had been spent and the Ministry of Natural Resources and Energy’s estimated costs could eventually reach E3.2 billion. 

The project was controversial from the start when the contract was awarded without going out to tender.

It had the enthusiastic backing of King Mswati who receives 25 percent of all mineral income in Swaziland which he holds ‘in trust for the Swazi nation’. In reality he uses the money to fund a lavish lifestyle. In November 2019 he purchased between 13 and 15 luxury Rolls-Royce cars at an estimated cost of up to US$4 million. He also has two private airplanes, at least 13 palaces and fleets of top-of-the-range cars. At his 50th birthday in 2018 he wore a watch worth US$1.6 million and a suit beaded with diamonds that weighed 6 kg. Days earlier he had taken delivery of his second private jet. This one, an Airbus A340, cost US$13.2 to purchase but with VIP upgrades was estimated to have cost US$30 million.

In February 2018, the Observer on Saturday, a newspaper in effect owned by the King,  reported the Ministry of Natural Resources and Energy was in the process of terminating the contract because little progress had been made.

In October 2013, King Mswati officially launched the construction of the project at a sod cutting ceremony. He said at the time, ‘The project that I bring to you today is one that is geared into transforming lives and take the entire region into higher heights.’

Construction was supposed to take two years and create 300 jobs.

Even though it had already missed its deadline, King Mswati, during the official opening of parliament in 2016, encouraged investors to take advantage of the project.

Once completed the facility would have a capacity for 90 million litres of fuel, enough to last Swaziland 90 days. No independent analysis had been undertaken to see if this was needed in the kingdom.

In January 2015 media were excluded from a House of Assembly session where a special Act of Parliament was passed to allow the Government to make the payment for the project. 

Members of parliament had previously rejected a Bill to guarantee the payment.

Claims of malpractice circulated in the kingdom and members of parliament were concerned that the lucrative contract had not put out to open tender. Media in Swaziland also reported that some people had registered imposter companies as part of a plan to destabilise the project.

After a year the project had not started. It emerged that the company originally contracted to build the project American Tank and Vessel (AT&V) had withdrawn from the contract.

The reason for the withdrawal of AT&V has not been explained publicly, but it is believed that the move was permitted under the terms of the company’s contract.

Then, without public consultation or going through the legal open tendering process, the contract was awarded to South African Company, Kantey & Templer Consulting Engineers.

The Swazi Observer reported the Natural Resources and Energy Minister Jabulile Mshwama saying that ‘since His Majesty had already announced that work had to begin by cutting the sod, her ministry had been working round the clock that the project kick starts and according to Swazi custom once the King has spoken, things have to be done’.

When a Government Bill was first introduced to the House of Assembly, members of parliament threw it out. The Times of Swaziland, the only independent daily newspaper in the kingdom, reported, ‘The MPs had tossed out the Bill after concerns had been raised about why the tender for the construction of the about E900m facility had not been an open one and they also questioned the particulars of Kantey & Templer Proprietary Limited (Swaziland) [a company formed to oversee the project].’

The Times Sunday, an independent newspaper, reported, ‘MPs are unhappy that other companies were not engaged, through an open tendering system, to bid for the multimillion project.  Suspicion reached high levels when the MPs learnt that a closed tendering system was used to engage the South African company to embark on the project. The nature of the suspicions cannot be repeated for now.’

The Sunday Observer, another newspaper in effect owned by the King, reported that individuals were trying to destabilise the project. It reported, ‘Two prominent individuals identified as being behind the hijack include a present cabinet minister and a businessman who also happens to be a former cabinet minister.’ 

The newspaper reported, ‘An individual close to the project confided that there is serious lobbying, by those who want a stake in the project, to have it stalled.  “The very same people who wanted to register impostor companies are the ones who are now lobbying members of parliament and cabinet ministers to have the project grounded. They are doing this to serve their own selfish interests. They want to create bad publicity around Kantey & Templer and the project in the hope that the tender award would be cancelled,” the well-informed individual said.’ 

Senators also questioned the awarding of the tender. The Observer on Sunday reported, ‘Senator Chief Kusa had also strongly questioned why the initial company AT&V had suddenly withdrew from the project and questioned how the whole project was costed and how the tendered company Kantey & Templer was eventually awarded tender. 

‘Senator Chief Kekela also wondered if the credibility of the company was considered as the country has experienced a number of projects that have failed as a result of companies whose profiles and credibility was not considered. “We have seen companies that have come and made heavenly promises that have however not come to effect and failed and I must say I do not want to work on risks here as a risk is dangerous, we should not therefore risk with the Swazi people,” the Senator said.’

In February 2018, the Ministry of Natural Resources and Energy told the Observer on Saturday, ‘The contractor [Kantey & Templer] did not meet the agreed upon timelines and we are working within the framework of the agreement for the next steps in this project. It is envisaged that the project will be returned to tendering in the very near future.’

See also

Swazi King fell for US$5bn con-trick

https://swazimedia.blogspot.co.uk/2015/01/king-fell-for-us5bn-con-trick.html