How come a court case and several presidential commissions of enquiry have failed to make any headway in proving allegations of “collusion” between Dawi Oil and Ariana Afghan airlines? An investigation.
Six years ago the Audit and Control Department reported that Dawi Oil, which was giving fuel to the then national carrier Ariana Afghan, had overbilled the airline by 29 million USD. The calculation was based on the difference in the presented rate and what was decided in the contract between the two following an auction for the exclusive supply of fuel to Ariana by the Ministry of Transport and Aviation on October 8 and 9, 2006. Dawi won the auction with its price of 100 USD per tonne of aviation fuel.
However, as records show Dawi charged the rate for only one month. It claimed it acted according to the contract, which stipulated the rate for only the first month, together with other terms and conditions including tax and tariff. The company has not bothered to substantiate the claim with an official document or other evidence.
Yet a lower court chose to side with Dawi Oil in a case where it is the plaintiff. Ariana – the board of directors of the airline is headed by a representative of the Ministry of Finance – has protested and filed an appeal in the business appeal court, Kabul. The issue was taken to court in 2012 after commissions assigned by presidential decree failed to make any headway.
In September 2011 Killid published an exclusive report on how officials chose to turn a blind eye to Dawi Oil’s tampering with the contract to supply oil to Ariana. Sayed Mohammad Mahdi Husseini, the then deputy auditor general said, according to investigations made by them, the original contract with Dawi was changed to a “compromise” contract.
Then Killid tried very hard to meet with all those involved in changing the terms of the contract, but it was impossible to get to the bottom of the puzzle.
According to the claims by officials of Audit and Control Administration, the above mentioned contract was dated and validated for five years at first, but the Special Supply Committee, which has legal status to sign contracts, approved it for a one year period precisely because of the uncertainty over price, and also insisted that the contract for handling oil storage should be separated from the fuel supplying contract.
Different views
The authorities in the Audit and Control Department believe the terms of the contract were tampered with as a result of “collusion” between then officials in the Ministry of Transport and Civil Aviation and Dawi.
Mohmand Baraki, the head of internal expenses of Ariana Airways, says, “Dawi Oil through collusion with the Ministry of Transport and Civil Aviation sabotaged the auction by presenting 100 USD as price for one tonne oil.” As a result the Azizi Group, which also bid for the contract to supply oil for Ariana, was edged out. Azizi had offered oil at 399 USD per tonne.
Deputy Finance Minister Mustafa Mastoor, who is the current chairperson of the board of Ariana Airways, described Dawi’s bid as impossibly unrealistic. “It is impossible that when the global price is 920 USD per tonne, a company bids 100 USD for one month, and for the next five months charges 920 USD, which rises to 1,130 USD thereafter.”
In 2009, the first presidential delegation appointed to probe the matter decided that Dawi owed Ariana 29,545,431 USD. However, the last presidential commission chose to take a different view, and strengthened the oil company’s case. Killid investigation showed the delegation which was headed by the then justice minister and included ministers of finance, economy and transport and civil aviation and the deputy attorney general decided that since the contract was for one year, Ariana paid for the oil at the rate of 100 USD for the first month “and the ministry (transport and civil aviation) paid 920 USD for the remaining months … (as a result) Dawi was saved from losses and … Ariana also was respected”.
Advantage Dawi
Head of Dawi Oil Abdul Ghafar Dawi does not tire of citing this report to conclude that there is no basis for a legal challenge to his company. Ariana, meanwhile, has appealed against the order of the primary court, which went in Dawi’s favour.
Airline officials and Ministry of Justice said the court sided with Dawi instead of investigating the case thoroughly. The court also decided the airline owes the oil company 18 million USD.
Killid has a copy of the letter from the office handling government cases in the Ministry of Justice, number 11703/8569 dated 20/12/2013 which states Ariana has objected to the decision number 124 dated 27/9/2013 taken by the Kabul commercial court. On the other hand according to the statement of Mohmand Baraki, the head of department of internal expenses of Ariana Airways, the decision taken by the Kabul primary trade court has been sought to be reversed by the airline and the office handling government cases, and the matter is under reinvestigation.
Abdul Ghafar Dawi believes the government is biased in the matter, despite the verdict of the primary trade court, which went in favour of his company. “Based on documents we have proved that Ariana should pay us 18,600,000 USD but as our opposite side is the government so the dossier is in the court,” he told Killid. However, Mohmand Baraki dismisses the charge. “In order to remove all ambiguity we presented 180 pages of receipts to show we had paid 119 million USD to Dawi.”
Deliberate obfuscation
Killid tried to interview concerned officials in the Kabul primary trade court but as the matter is sub judice they could not.
Meanwhile, Mohmand Baraki says there is confusion over what rate the oil should be priced at. He said the matter has been referred to the board of directors, and a decision is awaited. “As soon as the prices are fixed we will complete our accounts,” he said.
Mustafa Mastoor, chairperson of Ariana, believes the root of the confusion lies in Dawi’s failure to specify the global price that at which it bought the oil. Dawi has mentioned the primary purchase price but has not given invoices to Ariana, he says. He hints that Dawi may have calculated a high price even when it bought the oil in the global market cheaply. “The information that I have might be scanty or incorrect, but I can say that Dawi Oil has no contract with foreign companies and does not have purchase bills. Consequently we cannot set the price as the contract specifies,” he said.
According to Mastoor, Ariana has been making payments every month into Dawi’s account. Killid tried to interview officials in the oil company but failed.
How did the primary trade court decide in favour of Dawi Oil? Sadiqi Nilizada, a member of the financial and budget commission of parliament, blames the “mafia” present in the government. “Unfortunately, there is mafia in Afghanistan that has presence in all sectors of our government. These people due to their influence prevent the investigation of such type of cases,” he believes.
The Ariana-Dawi case was probed by Parliament but there was no follow up. “Unfortunately we (parliamentary financial and budget commission) could not prosecute in the case, because the jurisdiction of the court is separate and we do not have the right to interfere in the court’s verdict.”
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