Tuesday, 25 June 2013

Procurement legalities threaten strategic bio-diesel project


Niyibizi Ananie, a senior research technician at the IRST Kigali research station, explains to Rwanda Defence Forces personnel how bio-disiel is produced. 
Rwanda’s dream of becoming a net bio-diesel producer by 2025 hangs in balance as procurement legalities threaten to derail a bio-fuel project aimed at achieving this goal. The purpose of the project was to find an alternative source of oil that is made locally to guard against any eventualities on the world market. Business Times’ Stephen Nuwagira writes

Rwanda’s dream of becoming a net bio-diesel producer by 2025 hangs in balance as procurement legalities threaten to derail a bio-fuel project aimed at achieving this goal. 

Currently, all activity at the project initiated by the government in 2007 is at a standstill as the Scientific and Technological Research Institute (IRST) cannot access vital chemical reagents needed to process bio-diesel. Bio-diesel is produced from oil extracted from oil-producing seeds like palm tree, moringa and jatropha seeds. IRST has been using palm oil from its bio-diesel research centre at Mulindi, Gasabo district. 

Dr. Jean Baptiste Nduwayezu, the IRST director general, said the plant which used to produce about 500 litres of bio-diesel, has now spent over a year without operating. 

The project has the capacity to produce 2,000 litres of bio-diesel per day. It used to supply fuel to over 50 vehicles daily when it was in production.

“Initially, we used to import the chemical reagents directly from manufacturers, but the Auditor General stopped us in 2012, saying we needed to follow procurement guidelines for public institutions,” Nduwayezu pointed out.

He said although they advertised four times following the Auditor General’s directive, they failed to get a supplier of the potassium methylate class EN14214 reagent that they need. “The EN14214 reagent meets international standards because it is high quality. When we use it, we can be able to export the bio-diesel anywhere in the world,” he explained. 

He said although he wrote to the Rwanda Public Procurement Authority (RPPA) requesting that they treat them as a special case since the project is of great importance to the country, they were always told to follow the law. 

He added that he copied the last letter he wrote to the Office of the President and the Prime Minister’s office “to let them know the problems the project was facing.” He said as a result, they have been forced to sell off 79 tonnes of jatropha seeds and 18,000 litres of methanol they had bought.

“We need to be flexible in the law because we require special items. We can’t advance in research with these long procedures…We are stuck and can’t progress in our activities,” he said. He added that many of the public suppliers always double rates and defraud the country. 

IRST is allocated about Rwf3m for research each year. The purpose of the project was to find an alternative source of oil that is made locally to guard against any eventualities in the world arena. 

“Remember, one with oil calls the shots…we wanted a source of fuel that we could control. Besides, this would also mean we would save the money used for oil imports to develop other sectors of the economy,” Nduwayezu explained.    

Augustus Seminega, the Rwanda Public Procurement Authority boss, said the old law did not empower the body to allow public institutions to procure goods and services using a different arrangement.

”However, the law was revised and now empowers us to handle such cases. Because the research institute has not approached us since the amended law was approved about three months ago, they could be having other problems,” he said. 

He noted that the research institute could also have failed to attract suppliers because they wanted small quantities “since they don’t have the capacity to produce on a large scale”.

Seminega, however, admitted that the institute wrote (the last letter) to RPPA early this year, seeking authorisation to buy the chemicals directly which the body could not give “because that wasn’t provided for in the law at the time”.

He revealed that some institutions had already procured supplies and services through the window provided under the amended law’s Articles 17 and 23 (b).

“So, I can give them authorisation if they are still interested. 

“But I think they have capacity issues, infrastructure and other problems that are affecting their progress,” he pointed out.

The lack of policy for the development of the bio-fuel sector has compounded the IRST problems, Nduwayezu also revealed. He said the institute developed the policy and submitted it to the education ministry in 2008 so it could table it before Cabinet for approved, but it has not done so five years on.

“We spend sleepless nights trying to make our country self-reliant, but we are being frustrated by some people. We believe when the President learns of our problem, he will come to our rescue since we are in the line of ‘his thinking’,” he lamented. 

“If we Rwandans want to be self-reliant, we have to look beyond what we see.”

He said a sustainable bio-diesel policy the institute had developed in 2008 had showed that by this year, Rwanda would have been able to replace 5 per cent of its fossil fuel needs, if the policy was approved then. He added that according to this roadmap, the country could by 2015 replace 20 per cent of its ordinary diesel imports. This could have increased to 50 per cent in 2020. 

“Rwanda could have been able to satisfy itself, replacing all fossil diesel imports with bio-diesel in 2025…but since the policy was shelved, we shall miss a lot because no investor can risk their money when there is no sector policy framework,” Nduwayezu explained. 

He said before the project started, numerous studies and tests were carried out to ascertain its viability and sustainability.”We carried out studies and developed a bio-diesel development plan and the sustainable bio-diesel policy in 2008,” he revealed. 

He noted that the bio-diesel was tested on motor vehicles, generators, cooking stoves and lamps to establish its performance. He pointed out that all the studies and tests showed that the project would make Rwanda oil independent if the proposed development plan was followed and fully supported by the government.

Rwanda imports over 160 million litres of diesel per annum worth $300m. A litre of bio-diesel costs Rwf890 compared to Rwf1,000 of fossil diesel.

Nduwayezu said if the country planted 204.8 million jatropha trees on 128,000 hectares, Rwanda could produce the required bio-diesel to fuel its economy and replace its fossil diesel imports. 

Planting about 51 million palm trees on 32,000 hectares could also achieve the same result. He said according the development plan, the country would have earned Rwf806.7m in 2012, Rwf255m in 2016, which would increase to Rwf3b, hitting Rwf10.6b in 2025. 

“When the auditors come they blame us for not producing anything. How do we produce when we don’t have the ‘tools’ to use,” he wondered.The other major problem the project is facing is negative propaganda from multinational and local fuel cartels. 

“They are not happy about the project because they know if it succeeds they will lose a lot of money, especially if other countries develop similar projects,” he pointed out.

He noted that Western countries never want developing countries to be self-reliant. 

“That’s why they use all means to discourage people from planting jatropha, claiming it will cause food insecurity,” he said. He noted that contrary to this view, jatropha can be intercropped with other plants, adding that it also provides essential soil nutrients. 

He, however, said the research institute’s problems could soon end after Cabinet approved the formation of an authority.”

The authority will be having full powers to go into production, and could partner with private players to further expand the project,” Nduwayezu said.  

He said in the meantime, the project that is supposed to inject the need stimulus into the economy, will continue surviving on ‘drip’. 

“We cannot give up now…we know what this project can achieve. Besides, the farmers we have been sensitising are excited and have planted millions of jatropha trees to feed the plant,” he revealed.


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