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The Killid Group

Ariana-Dawi Oil: Who will bell the cat?

Written by Hamid Kohistani
Sunday, 18 September 2011 11:41

Ariana-Dawi Oil: Who will bell the cat? How come the powers that be looked the other way when it came to a case of breach of contract by a company supplying oil to Ariana airlines? Killid has the exclusive story.
Ariana Afghan airlines has been getting fuel from Dawi Oil since 2006. Before that the then national carrier had paid the Afghan Logistics Oil Co. 950 USD per tonne of fuel.
Dawi had won the winning bid for the exclusive supply of fuel to Ariana following an auction by the Ministry of Transport and Aviation on October 8 and 9, 2006.
According to documents and evidence gathered by Killid Group, the ministry had little problem deciding in favour of Dawi's bid which was much lower than its nearest rival, Azizi group.
Sayed Mohammad Mahdi Husseini, a deputy minister in the Audit and Control Department, says: "Azizi Group and Dawi Oil Group bid for the contract to supply oil for Ariana Afghan Airlines Company which belonged to the Ministry of Transport and Aviation at that time. Dawi won the auction with its price of 100 USD per tonne. Azizi had offered oil at 399 USD."

Promise on paper
However, as records show Dawi kept its promise on the price for only one month. It claimed it acted according to the contract which stipulated the price for one 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.
Husseini of the Audit and Control Administration says, according to the investigations made by them, the original contract with Dawi was changed to a "compromise" contract.
Killid has tried hard to get to all those involved with changing the terms of the contract in order to get to the bottom of the puzzle but with little luck. It has been impossible to establish contact with officials and
and members of the commission assigned by the Ministry of Transport and Aviation including the administrative chief, head of procurement and chief of development projects of the ministry. The commission was chaired by Raz Muhammad Elmi, the technical deputy to this ministry who was present at the time of signing of the contract.
Abdul Razaq Zolali presently works as Financial and Administrative Deputy to the Afghan High Commission of Oversight Corruption and Elmi who resigned from his job nearly eight months ago, were neither ready to meet nor ready to share details about what was going on at the time of signing the contract. 

Root of the controversy
According to the claims by officials of Audit and Control Administration, the above mentioned contract was dated and validated for 5 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.
Dr. Daud Ali Najafi, acting minister in the Ministry of Transport and Aviation, believes the problem between Ariana and Dawi has arisen over the question of exclusive oil storage at airports in Kabul and other provinces by the Ministry of Transport and Aviation. According to him,  "The contract for handling oil storage belongs to the Ministry of Transport and Aviation and according to the agreement between the ministry and Dawi Oil Company, all oil depots have been handed over to Dawi for 10 years."
There have been some moves to break this so-called "exclusive" contract and permit other companies, which have been given licences, to build and operate oil depots in other airports.

Pinning responsibility
Acting minister Najafi thinks it is doubtful that Dawi was given exclusive right to handle fuel storage, and goes so far as to say that the documents with the company are probably forged and illegally produced by "wrong" people.
Nematuallah Ehsan Jawid was the minister of transport and aviation when the contract for oil storage and supply to Ariana was signed. Killid reporters have repeatedly tried to contact him but have received no response.

No follow-up
Following the probe ordered by the Audit and Control Administration, and other investigations ordered by President Hamid Karzai, Dawi Oil has been asked to present the price difference, which was approved by the president, but it has not been implemented yet.
Sayed Mohammad Anwar Sadat, director-general handling government cases in the Ministry of Justice, says Dawi Oil should pay up roughly 29.5 million USD that it owes the government.
Dawi has been sent a letter dated Mar 28 from the Attorney General's office to this effect.
Abdul Ghafar Dawi ,Head of Dawi, has called the investigations made by government delegations as a plot against his company. "According to article 6 of the terms and conditions in the contract, the price of oil was specified according to the global market in addition to rent, tax, tariff plus 4 cents benefit and price of 100$ was noted for only one month."
Moreover, the head of Dawi has dismissed the calculations made by government delegations that claim the company owes the government around 45 million USD. He charges Ariana of owing Dawi nearly 21 million dollars for fuel supplied, a charge dismissed by Moeen Khan Wardak, head of Ariana.
Dawi insists that according to a presidential order of February 10, 2009, the ministers of finance, economy, transport and aviation, and the deputy to the attorney general were ordered to solve the problem between Ariana and Dawi at a meeting chaired by the minister of Justice.

Several probes
Meanwhile, Rahmatullah Nazari, deputy in the Attorney General's office and a member of the last delegation assigned by the Afghan president to investigate the oil contract, denies there was corruption in the execution of the contract and says the current problems between Ariana and Dawi are a result of "non-standard commercial contests and rivalry".
Nazari says according to the forms presented by Ministry of Finance, the price of 100 USD was included in the contract for supplying oil for Ariana by Dawi Oil Group for one month.
Husseini of the Audit and Control Administration says either way the controversy has damaged the government and the best way out would be for the government to back the Audit and Control's demand that Dawi pay up the money.
Nazari in the Attorney General's office says: "The opinion presented by Audit and Control Administration calculating price of each tonne at about 100$, was completely unfairly done. As the Afghan government defends its interests, it is obliged to protect Afghans' interests."

No end in sight
Chairman of Ariana seems disappointed that there has been no follow up on the recommendations of three delegations constituted by the Afghan president.
Nazari said his delegation had sent its opinion on July 18, 2010 to the president's following which Karzai had himself ordered the Attorney General's office to prosecute Dawi Oil.
Killid tried to interview and get more details from the chairman in the Presidential Affairs Office, in order to ensure more transparency, but received no response. The questions remain: Why has the issue not been resolved? Who can solve it?
Hamidullah Farouqi, the former minister of transport and aviation, insists it is up to Dawi and Ariana to solve a problem of their creation.
Or is corruption at the root of the problem. In the signing of the contract, and hiring of people according to nepotism and tribal and factional allegiances, which add up to making this an intractable situation.

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