Eswatini’s Strategic Oil Reserve leaks over E100 million Inhlase on December 5, 2025 at 8:07 am

BY INHLASE REPORTER

Over E100 million of taxpayer’s monies meant for the development of the country’s strategic oil reserve cannot be accounted for. Between 2016 and 2025, over E100 million meant for the foundational design phase was spent with no works done.

The Strategic Oil Reserve facility at Phuzumoya in Siphofaneni is an initiative meant to be the nation’s bulwark against fuel scarcity and price volatility, guaranteeing a crucial 60-day supply. The project’s groundbreaking ceremony was presided over by His Majesty King Mswati III on the 23rd of April 2025. The Taiwanese Minister of Foreign Affairs, Lin Chia-lung, was also in attendance.

An Inhlase investigation reveals a catalogue of financial mismanagement and procurement malpractices that saw over E100 millions of taxpayers’ money squandered on failed designs and ill-conceived contracts long before the recent E5.2 billion agreement for its construction was signed.

Audits reports show that in 2016, the Ministry of Natural Resources and Energy (MNRE) paid multiple companies E93 325 261.61 for foundational and design work.

Phase 1: Initial Infrastructure and Designs (2016–2019)

The MNRE’s first major expenditure related to the project involved four different companies between 2016 and 2021, totalling E57 726 656.66. 

The recipients included:

Inyatsi Construction (Pty) Ltd: Received E47 444 273.28 for road construction activities between 2017 and 2019.

Eswatini National Petroleum Company (ENPC): Received E10 000 000 in 2021.

Eswatini Electricity Company (EEC): Received E188 077.02 for electricity services in 2016.

Mpendza Construction (Pty) Ltd: Received E94 306.36 for other professional services in 2017 and 2018.

This initial outlay suggests significant preparatory work, but the most egregious spending was yet to come on the actual technical designs. In short, the companies were paid without full delivering the work while others were paid without having their work available since their work depended on the completion of the designs. Basically, the controlling officer at the time in the MNRE as well as the then project lead and the Ministry of Finance paid for services that were not fully or not rendered at all.

Phase 2: The CTCI Corporation Contract (2018–2021)

On October 25, 2018, the MNRE engaged the Taiwanese firm, CTCI Corporation, for Basic Design Engineering Services and Engineering, Procurement, and Construction (EPC), at cost estimate. The contract, signed in February 2019, aimed for basic project designs and detailed estimated costs for the four 10 000 cubic metres oil tanks.

Despite the scope being limited to basic designs, the MNRE paid CTCI Corporation E35 598 604.95 over three years (2019 to 2021). This payment was for initial deliverables like the plot plan and process flow diagram.

The ENPC Era: From ‘Optimisation’ to Irregular Expenditure (2021–2024)

In 2020, the project was transferred to the newly established ENPC under the Petroleum Act, No. 16 of 2020. Despite inheriting a project that had already consumed over E93 million, the ENPC Board resolved in December 2020 to re-cost the designs and procure a new contractor for “Design Optimisation and Bills of Quantities Consultancy Services.”

This decision essentially rendered the E35.6 million paid to CTCI Corporation for the original designs worthless. The ENPC’s subsequent actions only compounded the financial disaster. Further, it showed that there was no proper handover of the project from the ministry to ENPC resulting to a lot of fruitless expenditure.

The Billion Brother/Fhatani JV Fiasco (2022–2023)

The tender for design optimisation was awarded to a purported Joint Venture (JV) between Billion Brother Project Management Consultancy (Pty) Ltd and Fhatani Consulting Engineers. The audit revealed the JV was non-existing as there were no signed documents, lacking formal registration—a fundamental breach of due diligence that deprived other bidders of an opportunity. By standards, there should be an agreement of the JV and formal registration locally to be deemed lawful.

Original Contract and Unauthorised Scope Change: 

The original contract, dated May 9, 2022, was for E9 995 574.22. However, the scope of work was changed to essentially reproduce the designs from scratch, despite the MNRE having already paid E35.6 million for them.

Inhlase can reveal that there was an unjustified cost escalation in this contract. An Addendum dated August 31, 2022, increased the contract price by nearly 90% (E8 995 469.70), hiking the total contract value to E18 991 043.92. Documents seen by Inhlase reveal that the Eswatini Public Procurement Regulatory Agency (ESPPRRA) warned against this, advising an independent evaluation due to the high value, but ENPC ignored the advice and appealed the position. Furthermore, the former CEO is said to have failed to seek the minister’s approval for this significant change and cost escalation, violating Section 51 of the Public Finance Management Act which reads “Public officers with financial responsibility must seek the Minister’s approval for any cost escalations, deviations, or changes in project scope that might contravene the law.”

This was deemed a fictitious contract and fraudulent payments. The contract was deemed “fictitious” by the auditors, lacking key protective clauses like penalties for non-performance or delays. Despite the contract being terminated on October 10, 2023, due to “unsatisfactory and/or incomplete” work, ENPC had already paid the JV E16 082 204.05 which was a colossal figure representing fruitless and wasteful expenditure for services not rendered. The auditors further noted irregular payments, including E1 080 834.64 paid to Billion Brother for “Deloitte – Financial Model” and “Deloitte – Feasibility Study,” suggesting the JV may have been a “conduit pipe” for funnelling funds to Deloitte and Touche South Africa without a direct agreement.

“Regulation 113 (5) of the Public Procurement Regulations of 2020 clearly stipulates that, for a Contract Amendment to be valid, it must be duly signed by the authorized representatives of both the procuring Entity and the Supplier.”

The ESPPRA is a body in the country, established according to under the Procurement Act of 2011 has the power to regulate procurement in Public Enterprises and Local Governments. The board also has powers to investigate suppliers and blacklist them. When the ESPPRA Chief Executive Officer Vusi Matsebula explained that they were not made aware if the ENPC declined any advice from the entities.

“As to whether they have disregarded our advice we have not been made aware of that,” he said.

Understanding that there is a recently completed forensic audit of ENPC, Matsebula said the ENPC would need to communicate to them on issues of procurement that would require the ESPPRA’s intervention.

The Deloitte, EPCM/SOLIDCARE, and Buna Group Irregularities (2023)

The financial misconduct escalated as ENPC engaged three separate entities for overlapping or redundant services, repeatedly flouting tender procedures. Documents that the publication saw, from the ESPPRA indicate that in a number of instances the regulatory board warned about the floated procedures. 

ENPC awarded Deloitte & Touche South Africa Tender No.7 of 2023/2024 for the provision of consultancy services for finance raising, development and technical advisory services for the construction of the strategic bulk fuel storage. Deloitte and Touche came with other companies, EPCM JV, a consortium between Solid Care Services (Pty) Limited and EPCM Bonisana (Pty) Technical Consultants. However, they failed to deliver the awarded and agreed-upon. Despite the failure, ENPC paid Deloitte retainer fees amounting to E5 172 400 which is deemed as another instance of fruitless and wasteful expenditure.

EPCM/SOLIDCARE JV: Engaged on September 1, 2023, for technical advisory services without adhering to procurement processes.

The initial contract price was E16 700 000, but the technical advisory component in the tender proposal was only E11 250 000, meaning there was an unjustified increase of E5 450 000 in the final contract.

Payments to this JV totalled an astonishing E31 167 197.10. Crucially, E29 500 530.43 of this total was deemed irregular expenditure, as it was incurred for services not covered in the original scope, but unlawfully introduced through Addendums instead of new Requests for Proposals (RFPs). 

Buna Developers (Pty) Ltd: Engaged on December 17, 2023, for development advisory services, again without adhering to procurement processes. This was for the same scope of services already awarded to Deloitte and Touche.

The original contract of E7 393 500 was later increased by E2 406 500 to E9 800 000 via an Addendum, again lacking justification for the price hike. Total expenditure on advisory services to the Buna Group was E12 006 451.25.

The newly appointed ENPC Board Chairperson Dr Velaphi Dlamini was engaged to clarify the steps that have been taken by the board. 

“We are in possession of information indicating that the Auditor General’s report has flagged the flouting of procurement procedures involving Billion Brothers, Deloitte & Touche, and Buna Developers.

Asked about the remedial action, he said: “Kindly note that we confirm that as the Board we have received a report as you have stated. Please note we are in the process of consulting and engaging with all relevant stakeholders in respect of the findings in the report.”

The Grand Total: Over E140 million down the drain

The investigation paints a grim picture of a national project mired in incompetence and corruption, where poor planning and reckless financial practices cost the public an immense sum before the current construction phase.

The total funds paid out to these companies for designs, optimisation, and advisory services that were either rejected, incomplete, or fraudulently inflated, amounts to a stunning E157 753 114.01 excluding the recent E5.2 billion contract with Overseas Electric and Engineering Corporation.

The investigation revealed that the project suffered from insufficient oversight and technical expertise which failed to ensure that the processes delivered tangible results commensurate with the funds expended. 

Based on the funds that were commissioned at the MNRE prior to the formation of ENPC, it shows a lack planning and accountability. A visit to the site among the paid for services which is over E47 million for a road to the site, when the project was at the MNRE, showed that there had been a gravel road to the site. Additionally, a lack of oversight from Parliament can be pinpointed in this regard as funds had been allocated to the ministry for the project on a yearly basis without scrutinising the amount of work covered by previous budgets.

Despite all the funds that have been channelled by ENPC Board and former CEO, in September 2023, ENPC entered into a Memorandum of Understanding (MOU) with the Overseas Investment and Development Corporation (OIDC), the parent company of Overseas Electric and Engineering Corporation (OEE). By April 2025, a contract was signed with OEE for the bulk of the construction works, valued at USD290 000 000 (plus a USD3 000 000 provisional sum), an amount equivalent to approximately E5.2 billion at current exchange rates.

The audit noted the tragic irony: the initial investment on drawings, followed by the substantial payment for the “optimisation” process that produced no tangible deliverables, meant a fresh contract was required to commence the project, essentially paying for the same item designs all over again.

The dream of a 60-day strategic fuel reserve, a necessity underscored by the 2021 civil unrest and subsequent supply challenges remains alive. But Eswatini’s energy security comes at a devastating cost, not just the E5.2 billion construction price, but the E157 million already lost to poor governance, procurement breaches, and sheer waste. The public demands accountability for the millions that simply vanished.

In June 2025, Eswatini’s Parliament passed a Finance Bill that granted the Minister of Finance and ENPC permission to engage OEE, which is the Taiwanese company that will do the job at E5.2 billion. The passing of the Bill came against a backdrop of a controversy regarding the existence of another Botswana-based company which had presented to conduct the same job for E2.8 billion. Surprisingly, since the news about the engagement of the Taiwanese company started making rounds, early 2024, Members of Parliament (MPs) vowed that the E5.2 billion contract would not see the light of the day in Parliament. 

During a workshop of the House of Assembly and Senate Portfolio Committees at Pigg’s Peak Hotel around November 2024, the former CEO told Parliamentarians that there was a company that brought almost similar or better designs for the project for E2.8 billion. Last December, the government through the MNRE sent a delegation to finalise the deal in Taiwan, which was led by Minister Sikhumbuzo Dlamini, the incumbent Minister of Tinkhundla Administration and Development, who represented the MNRE Minister Prince Lonkhokhela.

In April 2025, the Minister of Finance, Neal Rijkenberg, tabled the Strategic Oil Reserve Loan Bill with a certificate of urgency. In May 2025 during a workshop of the loan Bill, the House of Assembly Finance and MNRE portfolio committees, started singing a new tune showing their full support to the Bill and the E5.2 billion facility. Notably, the workshop occurred weeks after the Republic of China on Taiwan Minister of Foreign Affairs Dr. Lin Chia-lung visited the country where an unavailing of the oil reserve 3-D architectural model was made before His Majesty King Mswati III at Mandvulo Grand Hall. On May 29, 2025, the House of Assembly passed the Bill.

Just a month ago, the MNRE Minister took the chairpersons of both Houses of Parliament to tour the construction site. He expressed gratitude at seeing the progress of the project and explained that it is expected to be completed within 36 months. 

In terms of the unjustified expenditures, the minister explained that the office of the Auditor General has been engaged but could not comment on whether the audit has been implemented or would be implemented. The minister assumed his position in 2023. In 2024, he dissolved the ENPC Board before the end of its term, which was appointed in 2021. Further, the then CEO’s contract was not renewed.

A breakdown of some of the funds

​Inhlase  

BY INHLASE REPORTER Over E100 million of taxpayer’s monies meant for the development of the country’s strategic oil reserve cannot be accounted for. Between 2016 and 2025, over E100 million meant for the foundational design phase was spent with no works done. The Strategic Oil Reserve facility at Phuzumoya in Siphofaneni is an initiative meant