A fiscal body exposes failures in a multimillion-dollar contract, while legal oversight is notably absent.
A report from a fiscal investigative body has documented significant irregularities in the rehabilitation contract for Train 1 at the “Ana María Campos” Petrochemical Complex (Zulia), signed by Pequiven with Valprotech Internacional Limited in 2018. The document, prepared after 2020, reveals that the legal consultancy of the state-owned company did not take action to investigate or rectify non-compliance despite evidence of risk to public assets.
Advance without guarantees and delays in bonds
The $85.3 million contract included an advance of $17 million, which was supposed to be secured by an Escrow trust — a mechanism whereby a third party holds funds until obligations are met. However, Pequiven disbursed the funds in June 2018 without requiring this guarantee, violating Article 122 of the Procurement Decree. The backing bond was submitted a year later (October 2019) but was never executed, despite Valprotech:
- Failing to deliver 50% of materials at the start of work in July 2018.
- Unauthorizedly transferring equipment from Train 1 to Train 2, halting rehabilitation.
- Not presenting work guarantees, as noted in a 2019 inspection report.
Omission by the legal consultancy
Although the fiscal report does not directly mention the legal consultancy, comparative analysis reveals its inaction:
1. They failed to supervise the contract: Allowed payment without Escrow and didn’t verify the assignment of the contract to Valprotech, even though the original signatory (AISCA) did not meet requirements.
2. Ignored regulations: They overlooked Article 6 of Internal Control Standards, which mandates safeguarding public resources.
3. Took no action in the face of evidence: Despite the losses due to project delays — which blocked sales of fertilizers — there were no internal investigations or legal claims.
Context and institutional silence
The official in charge of the legal consultancy from 2022-2023, whose appointment fits into a power structure existing since 2017, has not been held accountable for these failures. Analysts are calling for independent audits, indicating that the lack of supervision reflects a “systematic infiltration” into strategic areas. Meanwhile, Pequiven remains silent.
Additionally, it’s important to point out some antecedentes of the contracted entity. The company in Venezuela was established in 2013. A year later (2014), a homonymous entity was registered in London. The address in Caracas (Saule building in Chacao) and the name of the manager or operator (Johann Hoffmann, a stockbroker authorized by Sunaval) indicate that it is the same organization.
The Valprotech case, with a risky advance and unfinished works, underscores the urgent need for reforms that prioritize transparency and functional accountability in public contracts.
