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JUBA - 26 Apr 2015

Exclusive: South Sudan finance ministry bypassed in multi-million dollar tractor deal

South Sudanese officials who negotiated the purchase of 1000 tractors bypassed finance ministry rules and decided to award a non-competitive contract to a Sudanese company that was involved in an earlier procurement scandal, Radio Tamazuj reports exclusively.

Two senior government sources confirmed the involvement of presidential aides in the negotiations with Al Cardinal company and revealed that the Presidency and not the Finance Ministry negotiated the terms of the contract.

Although the government has officially released no information on the terms of procurement, the two sources provided per-item price estimates suggesting the deal could be worth between $38 and $50 million and was awarded on a non-competitive basis using off-budget funds.

A high-level source with knowledge of the contractual arrangement identified the tractors as type Massey Ferguson 375 and 240, which he said were reliable and economical. He explained that the models were chosen in part because of versatility and availability of spare parts and services.

The source disclosed that the 1000 tractors were purchased using money from the military pension fund. He said this arrangement was justified on the basis of 'urgency' because of the fast-approaching planting season. He said the Defense Ministry will be repaid from the 'special programs' budget in the Office of the President.

These remarks confirm an earlier report that the tractor deal was made using military pension funds in spite of a law banning the use of pension funds for purchases of motor vehicles as investments.

The official was cautious about making comments about the contract price for the tractors but he disclosed that the market value of one tractor at the source could be $35,000 to $38,000 dollars: “This market value for each tractor may go up if administrative and other associated costs are included during the initial stages of negotiation of contract. But I think it could be within the range of 35,000 to 38,000 dollars,” he said.

A second high-level source at another government body involved in the tractor deal said the actual market value for a tractor at the source is around $27,000 dollars but in actuality the purchase price was about $50,000 each.

Information from these sources indicates that the Office of the President negotiated the terms of the contract, instead of the Department of Procurement at the Ministry of Finance. There does not appear to have been any competitive bidding process.

Al Cardinal company was involved in another procurement deal in 2007 for the supply of vehicles for South Sudanese government officials. Finance Minister Arthur Akuien Chol was placed under house arrest in March 2007 during an investigation into the terms of this deal.

The bills for the vehicles purchased from Cardinal under this arrangement showed they were bought for $95,000 each. Investigators said the same vehicles could be bought for between $40,000 and $45,000 each. Two undersecretaries and the ministry’s director of taxation were also reported to have been dismissed in connection with a graft probe into the same deal.


Makuei says 200 of S Sudan's new tractors for the army (21 April)

1000 tractors not in South Sudan budget (19 April)

Khartoum company linked to South Sudan tractor deal (17 April)

Agriculture minister refuses to reveal cost of Kiir's 1000 tractors (17 April)

Officials unclear about source of funds for Kiir's 1000 tractors (17 April)

Salva Kiir 'donates' 1000 tractors (17 April)