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Holness to order forensic audit of $5.2b unaccounted oil loss at Petrojam

Monday, December 10, 2018

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KINGSTON, Jamaica — Prime Minister Andrew Holness is to order a forensic audit into the J$5.2 billion worth of oil that has been unaccounted for between 2013 and 2018 at the State-owned oil refinery Petrojam.

Holness made the disclosure this morning at a press conference that was convened on the heels of a damning report from the Auditor General's Office last week, deepening the controversy that has engulfed the oil refinery since the start of the year.

The findings, which were tabled in the House of Representatives on Tuesday, revealed high levels of unaccountable oil losses, instances of management overriding procurement guidelines, poor management of capital investment projects and consultancy arrangements, inconsistent recruitment and employment practices, and inadequate oversight and monitoring of Petrojam operations by the Ministry of Science, Energy and Technology.

Holness said that those who benefited illegally from state funds must pay back; adding that the boards of Petrojam and the Petroleum Corporation of Jamaica (PCJ) will be instructed to take steps necessary to reclaim any wrongly used public funds.

“Where the Board sees that, for example, payments were made for work on a contract and, by virtue of delays and changes, the contract is terminated… but full payment was made and work not completed… the Board should seek legal advice and prepare to recover such funds through civil means. That is part of the principle of restitution that will ensure that there is accountability,” the prime minister said.

As it relates to the issue of pricing mechanisms employed to determine gas prices, the Holness vsaid there is some discretion used to determine prices locally and in that exercise lies an opportunity to bring transparency.

He said directives will now be given to the board as of now to prepare minutes of pricing committee, which must then be sent to the ministries of energy and finance.

Holness added that his administration will also consider introducing independent parties into price determination process but emphasised that these persons must not be pushing special interests.

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