This represents a contract value of R2,4-billion – of a total of R4-billion – over the three-year duration of the agreement. The successful bidders, all of whom have significant BEE shareholding, are to supply an estimated 318-million litres of fuel a year to the State-owned transport utility and its business units.
Out of 16 oil companies that submitted bids originally, seven satisfied Transnet’s criteria. They are: Exel Petroleum, Engen/Afric Oil, KZN Oils, BP South Africa, Caltex Oil, Total SA/Calulo Investments and Shell SA/Tepco.
“We, indeed, take pride in every little difference we make to brining historically disadvantaged communities to the mainstream of the South African economy,” said Transnet group CE Mafika Mkwanazi.
The tender includes supplying fuel to 18 000 of Transnet’s revenue-earning and nonrevenue-earning vehicles, 48 locomotive servicing sites and 88 ‘home-based’ sites.
Engen Petroleum and Afric Oil, in which Worldwide African Investment Holdings has 20% and 55% stakes respectively, submitted a joint bid and received the biggest share of the contract – 79,7-million litres a year.
The second-biggest slice was awarded to Exel Petroleum, in which black investors – including women’s investment group Nozala – have a total of 77,5% shareholding. The company is to supply 72,5-million litres a year.
KZN Oils is to supply 66,5-million litres a year, followed by BP South Africa with 62,5-million litres, Caltex with 20,5-million litres, Shell South Africa/Tepco with 10,5-million litres and Total with 5,8-million litres.
Transnet, South Africa’s biggest consumer of petroleum products, considers BEE a top priority.
“This country needs more entrepreneurs. To create these, a company like ours needs to support small and medium-size businesses,” Mkwanazi added.
“It is also in this category where the majority of our people expect employment opportunities.
“Given this expectation, we need to steer the direction of the more experienced and established white business to the formation of alliances and partnerships with the smaller and, in some cases, less experienced black businesses”.
Mkwanazi explained that one of the ways of achieving this is to get large businesses and corporations to support BEE companies, which will assist in creating a stronger and more stable economy in South Africa.
Transnet has committed itself to reaching a 50% target of available discretionary spends to BEE by 2005. This target was achieved during the past financial year.
“However, this is a moving target, as it is adjusted annually as Transnet grows the size of its discretionary spend.
“You will also be pleased to know that figures tabled for the 2002/3 financial year – due to be announced in June, with our overall performance figures – show an increased spend on budgeted percentages,” said Mkwanazi.
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