Transnet has awarded a R2,4-billion fuel contract to seven black empowerment oil companies.
Speaking at a media briefing in Johannesburg on Wednesday Transnet CEO Mafika Mkwanazi said the successful bidders were Exel Petroleum, KZN Oils, BP South Africa, Caltex Oil, Total/Calulo Investments, Engen/Afric Oil and Shell SA/Tepco.
Total, Engen and Shell entered joint bids as they did not meet the 30% black empowerment holding specified by Transnet.
Mkwanazi said the three-year contract represented 60% of the parastatal’s fuel needs. The contract covers an estimated consumption of 318-million litres per annum.
The joint bid by Engen Petrolem and Afric Oil, in which Worldwide African Investment Holdings has a stake of 20% and 55% respectively, received the largest slice of the cake and was allocated 79,7 million litres per annum of the contract.
Exel Petroleum, 77,5% held by black investors, was allocated 72,5 million litres per annum followed by KZN Oils at 66,5 million litres per annum.
Exel Petroleum’s contract with Transnet will be the company’s largest and worth R260-million per annum to the company.
British Petroleum (BP) South Africa was allocated 62,5 million litres per annum, Caltex Oil 20,5 million litres, the Shell South Africa/Tepco consortium 10,5 million litres and Total 5,8 million litres litres per annum.
The awarding of the fuel contracts was strongly biased towards black empowerment concerns with a 30% weighting for empowerment while the remaining 70% was for price and business issues.
The South African oil industry charter requires that empowerment concerns hold 25% of the country’s petroleum sector within 10 years.
In addition to empowerment, Transnet was also looking to consolidate its fuel procurement through the awarding of Wednesday’s contract.
Exel MD Maurice Radebe said the deal confirmed Transnet’s commitment to transformation.
”This deal makes Transnet our biggest customer. It will contribute immensely to Exel’s growth and help us increase our market share,” he said.
BP SA chairman Fred Phaswana said the company’s partners, the Mineworkers Investment Company and the Women’s Development Bank, were delighted with the deal.
Rajen Reddy, KZN Oils MD, said the contract had led to the restructuring of his company’s shareholding.
”An additional 30% of issued share capital has been taken up by previously disadvantaged groups. Another five percent has also been allocated to staff,” he said.
The tendering for the contract followed a three-stage process, which started with 16 bidders, moved to nine bids and ended with seven winners. – Sapa, I-Net Bridge