OWN CORRESPONDENT, Pretoria | Saturday
AMID growing calls for the head of Minerals and Energy Minister Phumzile Mlambo-Ngcuka, the government will decide next week how to act on allegations of a secret R1,5bn deal which has effectively privatised the country’s oil trading operations – and will cost the taxpayer at least R75m.
Ministry official Kanyo Gqulu said a forensic audit would be launched, if necessary, into whether the management of the Central Energy Fund deliberately concocted a deal with two private companies to the detriment of the country, and without the knowledge of Mlambo-Ngcuka.
The Mail and Guardian reported that the alleged R1,5bn contract was sealed in April this year without a public tender and without the knowledge of the minister.
The deal was allegedly struck between the Strategic Fuel Fund (SFF) and two oil trading companies – High Beam Trading International, registered in the Bahamas, and Trafigura, an international commodities trading company.
The SFF is the oil trading subsidiary of the Central Energy Fund, the holding company of the state’s oil operations.
The deal reportedly pays the companies to effectively take over SFF’s oil trading operations for three years.
It gives them a share in the profits while imposing few corresponding liabilities.
The SFF apparently turned to the two companies after making an R84m loss on the sale of reserves. Further losses were sustained when the oil market became unpredictable and adversely affected the government’s futures hedging on the price of the oil.
Gqulu said Mlambo-Ngcuka learnt of the deal between the SFF and the two companies in July this year. After studying the contract she instructed Minerals and Energy Director-General Sandile Nogxina to investigate the matter.
Nogxina presented his report to the minister about three weeks ago.
The Democratic Alliance called for Ngcuka’s resignation, saying she should accept full responsibility for the deal.
DA spokesman Ian Davidson said Ngcuka’s department knew about the contract since July, yet she failed to inform Parliament of the matter.
“No doubt she hoped that the matter could be hidden from the public eye. The minister’s conduct is unacceptable and not befitting a Cabinet member,” Davidson said. – AFP