Fuel Supply Tender ‘Reasonable and Robust’ – Namcor

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By Catherine Sasman

WINDHOEK

The National Petroleum Corporation of Namibia (NAMCOR) refuted claims in various media that the fuel supply tender that was awarded to Afroneft, was fraught with inconsistencies.

Speaking to New Era last Friday, Managing Director of NAMCOR, Sam Beukes,
said Afroneft received the 12-month fuel supply tender after three companies were short-listed from the seven that had applied.

Two independent auditors’ firms confirmed that the tendering process was above board, with Deloitte & Touche describing the tendering process as ‘reasonable and robust’, said NAMCOR Corporate Legal Advisor and Company Secretary, Toni Beukes.

Eighteen companies were invited to tender, including Namibia Liquid Fuels (NLF) whose supply tender was terminated late last year.

NLF had, however, in September last year, written a letter to NAMCOR, in which it indicated that it would not apply for the new tender, arguing that it could not do so as it had not yet received a notice of termination of its supply contract with NAMCOR.

But, argued Sam Beukes, NLF was informed of NAMCOR’s decision to terminate the contract in a letter on July 2, last year.

On October 1, NLF was served with a 90-day notice of termination as per the contract agreement between NAMCOR and NLF.

“But there was nothing that prevented NLF from tendering,” maintained the MD.

He said contrary to the agreement, the expected transfer of skills from NLF/Sasol Oil to NAMCOR, did not take place. Instead, he charged, the contracted company had built its own capacity.

The main consideration to enlist Afroneft, a sister company of Glencore UK Limited, said the MD, was because it tendered at the lowest cost.

The three short-listed companies were BP (making the highest bid at US$250 million), Optima Energy (bidding at US$248 million), and Afroneft (that made an offer to supply the oil at US$243 million).

Beukes acknowledged that Afroneft was little known at the time of the tendering procedure, but that it had met all the contract requirements, as the other two had.

He would also not expound on the shareholders of Afroneft, except to say that the directors and shareholders of Glencore were the owners of Afroneft.

That, he said, was the only information available to NAMCOR.

Beukes further informed New Era that Afroneft bought back the petrol at the same price as five local oil companies because the second consignment had purportedly not met the international oil industry standards for transporting petroleum products.

The cost of the second consignment, said Beukes, was not N$200 million as previously reported in the media, but was in fact US$12 million, which at that time translated into roughly N$90 million.

The problem with the consignment, said Beukes, was not that the petroleum product was not the right standard – as confirmed by the oil industry inspectorate, GTS Empowered, based in Durban, South Africa – but that the vessel was not yet registered as a double hull (two-layered) vessel.

The vessel, he said, was initially a single hulled vessel, but it was in the meantime converted to a double hull, as per international safety standards in the event of oil spillage.

The confusion came in because the conversion of the vessel had not been done, and hence the instructions from the local oil companies’ head offices not to accept the consignment, despite an initial decision by the local companies to accept the petroleum products.

“It was a hierarchy issue,” said Beukes.

The total costs NAMCOR had to incur as a result of this, said Beukes, amounted to N$1,2 million for demurrage (a penalty cost for keeping the vessel at the Walvis Bay Port) and for sailing it eventually to the Port of Banana in the Democratic Republic of Congo.

Another concern was the constraints at the Walvis Bay receiving facilities, which required a buffer product to make the discharge of the petroleum product safe.

The next two Afroneft vessels are lined up for this week.

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