MBABANE – A payment of around E6 million effected based on an addendum that had not been legally concluded, is one of the findings of a forensic audit into the Eswatini National Petroleum Company (ENPC).
The findings are contained in a confidential report prepared by the Office of the Auditor General (AG) Timothy Matsebula, dated September 2025.
The report has yet to be made public, and the veracity of the contents is yet to be proven in a court of law.
The report states that the ENPC engaged the services of a joint venture for a design optimisation and bills of quantities services for the strategic oil reserve facility at Phuzumoya through a general condition of contract (GCC) dated May 9, 2022 amounting to E9 995 574.22 and amended to E18 991 043 through Contract Addendum No.1 dated August 1, 2022, duly signed by both parties.
According to the findings contained in the report, the GCC cited was unfair to the ENPC in that it lacked key clauses of a standard professional consultancy contract prescribed by the industry regulators such as the International Federation of Consulting Engineers (FIDIC) for consultancy services and the Joint Building Construction Committee (JBCC) which guides and provides standard contract templates for works of such nature and magnitude.
“The contract lacked clauses such as ‘penalty for non-performance, completion or delays on project deliverables and a professional indemnity clause’.”
It was highlighted that this occurrence has, however, cast doubt on the originator of the contract, as it seemed to favour the interests of the service provider.
Additionally, the report mentioned, Regulation 111 (1) of the Public Procurement Regulations, 2020 had been breached.
“This regulation states that the procuring entity shall designate a member of staff as the contract manager for every contract awarded. However, ENPC negligently failed to designate a member as a contract manager. In terms of this regulation, the contract manager’s responsibility is to ensure that the contract is complete prior to closing the contract file,” the report mentioned.
Another finding contained in the report relates to an alleged unauthorised expenditure of about E6 086 529.83 and weaknesses in internal controls over contract management and payment processing.
This is in relation to the signing of the addendum on different dates.
According to the investigation, there was a delay of nine months.
It is stated that despite the absence of a fully-executed addendum, payments amounting to E6 086 529.83 (being the increased cost) were processed and transferred to the joint venture.
“This situation reflects a serious weakness in ENPC’s internal control system, particularly within its contract management and payment processing functions. Payments were affected based on an addendum that had not been legally concluded, thereby bypassing essential controls meant to ensure that all contractual obligations are duly authorised before execution,” the report highlighted.
In summarising the findings, the report stated that payments were made despite that there were no tangible deliverables (certification of work done).
This, it is highlighted, reflects gross negligence and mismanagement of public funds, and fruitless and wasteful expenditure.
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Parastatal lacks capacity in project management
MBABANE – The Eswatini National Petroleum Company (ENPC) lacks capacity and contract management for large and complex infrastructure projects.
This is one of the findings contained in the report.
The report states that at the ENPC, there are no systems, mechanisms, processes and structures in place to effectively monitor, track, evaluate, mitigate risks and guide the progress of the project.
This, the report states, has been evidenced by the ENPC which failed to detect shortcomings and failures of some of the companies it awarded tenders.
The report cited one of the joint ventures which was awarded a tender and said it did not provide deliverables that were satisfactory and acceptable, despite numerous time extensions.
It was highlighted that in terms of Regulation 111 (1) of the Public Procurement Regulations 2020, the procuring entity is required to designate a member of staff as the contract manager for every contract awarded.
In terms of Regulation 111 (2) (a), the contract manager shall be responsible for monitoring the performance of the supplier, to ensure that all delivery or performance obligations are met or appropriate action is taken by the procuring entity in the event that such did not happen.
The report said apart from that, Section 11 (2) (a) of the Public Finance Management Act 10 of 2017 stipulates that a chief executive officer or Board of an entity shall put in place measures for the management of public finances consistent with the principles, standards, processes and systems required by the Act, including but not limited to effective and efficient internal control arrangements and systems for the management of assets, liabilities and other risks.
“Moreover, Section 11 (2) (c) requires the chief executive officer to put in place a system for evaluating capital projects as part of the approval process for all capital projects. However, the ENPC did not comply with these provisions. ENPC should appoint qualified personnel with expertise and vast experience in the petroleum sector,” the report mentioned.
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E5m increase in tender-less joint venture
MBABANE – The forensic investigation into the ENPC has uncovered that there was irregular expenditure in a joint venture that was engaged without tender.
According to the forensic report, the Eswatini National Petroleum Company (ENPC) engaged the joint venture to provide technical advisory services (engineering) without following the procurement process and an initial agreement was signed in September 2023 with a contract price of E16 700 000.
However, according to the report, the tender proposal submitted by the service provider, together with the tender evaluation report prepared by ENPC, had the cost for technical advisor services fixed at E11 250 000.
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