Blumberg Grain to attend inquiry on wheat corruption, which grows to around EGP 700 mn
Blumberg Grain Middle East and Africa CEO David Blumberg will testify today before the House of Representatives today on why the shouna system his company has built isn’t yet fully operational. Blumberg will speak before the House committee probing allegations of fraud in this year’s domestic wheat harvest, Blumberg told Al Mal. As we noted last week, Blumberg Grain placed primary responsibility for the delay in the operation of its shounas on the Supply Ministry’s General Company for Silos and Storage (GCSS) and the latter’s failure to supply adequate power for them by harvest season.
How are Blumberg’s shounas related to the wheat fraud case? It isn’t — not directly, at least. The Blumberg system was specifically designed to track grain storage and detect manipulation or theft. Had GCSS provided the project with the electricity it was contracted to provide, the Blumberg system might have been operational for this year’s harvest and provided data of use to investigators — or made the alleged fraud impossible to start with.
State-run silos company head goes on offensive: Mahmoud Abdel Aziz, head of the General Company for Silos and Storage, says his company has supplied the Blumberg system with electricity, but admitted to an unspecified “misunderstanding” about a “minor technical aspect” of the contract. Abdel Aziz then casually drops a bomb, claiming GCSS rejected Blumberg Grain’s proposal for phase two of the grain storage project over the project’s “high costs.” We had noted back in April, that the second phase of the project, would see the development of 300 shounas at a cost of USD 120 mn — three times the scope of phase one.
Meanwhile, the scandal around this season’s harvest continues to grow, with committee member Yasser Omar saying more than EGP 700 mn in wheat is effectively missing or was never produced in the first place, according to Al Shorouk. The committee’s report, which is due to come out at the end of the month, will note the entire system is hobbled by inaccurate data and gaps that leave it open to corruption, a source from the committee tells Al Borsa.