Colombia’s fiscal authority announced Tuesday that it will investigate oil refinery Reficar, center of the biggest corruption ignominy in the country’s history.
Comptroller General Edgardo Maya declared that several contracts that exceeded USD $1 billion for the modernization of and expansion of the Cartagena Refinery will be investigated as well as the financial statements relating to the project.
The investigation will seek to determine whether double and even triple payments were made by the refinery during the upgrading project which was meant to cost $3.3 billion, but had a final price tag of more than $8 billion.
The extra cost is the equivalent of 1.5 times the cost of the widening of the Panama canal and is more than the estimated cost of building Bogota’s entire metro system.
News broke May last of an embezzlement scandal at Colombia’s main oil refinery with reports of $4 billion missing and a $16 million prostitute bill.
Reficar is set to be scrutinized by the Comptroller General’s Office to clarify the missing funds and the astonishing discrepancies in the figures for the expansion project that began in 2007.
This new inquiry, which will be carried out by a team of 16 auditors, will seek to get to the bottom of the misappropriation of funds by those involved in the project which was not done by the first audit.
The Comptroller General explained that it did not validate the information that Reficar provided at the time because “evidence was found that showed inefficient fiscal management, such as significant losses and irregularities with its assets.”
Specifically, the new audit will tackle the issue of subcontracting which is said to have made up a large percentage of the discrepancy in funds.
In total, 2,460 subcontracts were made, 18% of which ended up costing more than double what was expected.
The explanations for these increases include greater numbers of work hours, lower productivity, increasing prices, and delays.
In addition, the first probe into the scandal revealed that “exorbitant quantity of excess materials… [that are] incomplete, destroyed, damaged, or different to what was required,” according to the Comptroller General at the time.
These discrepancies too will be investigated further by the audit team which is made up of civil engineers, oil and systems lawyers, accountants, economists and financial managers, all forensic experts in auditing.
Reficar, also known as the Refinery of Cartagena, is one of the biggest oil refineries in South America.
Oil makes up roughly 50% of Colombian exports and the value of the peso is closely linked to the international oil market.
The new refinery, which was inaugurated by President Juan Manuel Santos in 2015, is located on the outskirts of the northern Caribbean city of Cartagena. It has the capacity to refine 165,000 barrels of crude per day and is equipped with the most modern refining technology in Latin America.