18th July 2019
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Central bank to take charge of highways construction funds

Author: Sebit Daniel | Published: 3 weeks ago

Construction work has commenced along the Juba -Terekeka road. PHOTO: Shandong Hi-speed

The government has revoked a decision which earlier entrusted the Ministry of Petroleum with the responsibility of wiring funds into an escrow account meant for the construction of the Juba -Bahr el Ghazal highway.

A cabinet meeting on Friday has decided to place the responsibility of control of the funding on the bank of South Sudan.

The bank will now deal directly with the China Shandong High-speed group of companies.

It said money generated from the sale of crude oil will be channel through the Central bank, which will then transfer the money to the contractor, the Chinese-owned company.

Three months ago, South Sudan and Shandong High-speed signed an agreement for the construction and upgrading of major national and interstate highways.

The 700-million-dollar deal was to be paid gradually through the lifting of 30,000 barrels of crude oil per day -to cover the cost of the road works.

Last month, the government announced it completed the shipment of the first cargo of crude oil meant to fund the construction of the Juba – Terekeka – Yirol – Rumbek road project.

Read related story: https://eyeradio.org/govt-remits-the-first-cargo-of-crude-oil-to-chinese-road-construction-company/

It said the buyer of the crude had also been informed of a bank account opened to deposit the money for the Chinese company.

But a decision reached on Friday by the cabinet resolved to backtrack on the plan.

Information Minister, Michael Makuei said the funds will not move directly from the Ministry of Petroleum to the special account created for the Shandong High-speed group of companies.

He said the Ministry of Petroleum will sell the crude, give the money to the bank of South Sudan, which shall in turn transfer the money to the company.

“The proceedings received from the sale will go directly to the central bank, the Central Bank will then transfer the money to Exim Bank in China. This is to avoid any crooked dealings in the oil industry,” Makuei told the press in Juba.

On Wednesday, President Salva Kiir formed a committee to investigate the mechanism used in the pre-sale of South Sudan’s oil over the past few months.

The body is told to thoroughly investigate the pre-sale process, payment, taxes paid and details of oil companies involved in the oil production and sale.

The 7 member committee is headed by the Minister of Cabinet Affairs, Dr. Martin Elia Lomuro, and deputized by Martin Otoromoi, the Deputy Minister of Justice.

It is to also to ascertain the number of pre-sale agreements and companies allocated crude oil on that basis.

Read related story: https://eyeradio.org/kiir-orders-investigation-into-oil-pre-sale-deals/

The move comes weeks after Kiir relieved Ezekiel Lol Gatkuoth as the Minister of Petroleum, and appointed Engineer Daniel Awou Chuong as his replacement.

Makuei said the new decision takes the responsibility of dealing with finances away from the Ministry of Petroleum.

“The Ministry of Petroleum is not a spending agency but a revenue generating institution,” he said.

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