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Finance Bank funded crude oil procurement - Magande

Finance Bank funded crude oil procurement - Magande
By Joan Chirwa
Tuesday October 23, 2007 [04:00]

FINANCE minister Ng’andu Magande yesterday disclosed that Finance Bank Zambia Limited financed the procurement of 60,000 tonnes of crude oil offloaded into the country two weeks ago. This follows public outcry that the government should disclose the name of the bank that President Levy Mwanawasa said would be involved in the procurement of crude oil for refining at Indeni Oil Refinery.

During a press briefing in Lusaka yesterday, Magande said that the government had faced a lot of pressure after the withdrawal of Total Zambia Limited in the procurement process; hence the involvement of Finance Bank at a time when the country urgently needed feed stock. He addressed the press jointly with energy minister Kenneth Konga, agriculture minister Ben Kapita and acting information minister George Mpombo.

“There has been a lot of talk concerning the procedure taken in the procurement of crude oil. We had a problem in this country in terms of feed stock for Indeni to operate.

This was all because Total Zambia said it will no longer bring in crude when we refused to adjust prices of fuel pump prices by 25 per cent as proposed by the company,” Magande explained. “Now, we knew we were going to be in problems if we just sat without doing anything.

That is why we had to look for someone to supply crude, and a company called Gallic offered to bring 60,000 tonnes and they are the ones that said there is a bank in Zambia that can finance this procurement. And they told us that this bank is in Cairo Road and that this bank is Finance Bank.”

Magande further said the government was trying to raise enough resources through the purchase of foreign exchange using the Bank of Zambia for the procurement of the next consignment of 90,000 tonnes of crude oil next month, which would be supplied by a Switzerland-based company called Lukoil Trading and Supplying Company (LITASCO).

“Since our good friend (Finance Bank Zambia chairman Rajan Mahtani) helped us procure the 60,000 tonnes of crude, it will be difficult for him to open another letter of credit.

Hence, we have decided to purchase foreign exchange using the central bank so that we could bring in another 90,000 tonnes of crude oil before the end of the year at a cost of around US $65 million,” Magande said. “Then by the end of November, we hope to find a company that can be supplying crude from a list of tenders we are receiving. The tenders for those who will be financing the procurement will be done separately.”

Others that attended the briefing include Energy Regulation Board executive director Silvester Hibajene, Zambia National Tender Board director David Kapitolo and other senior government officials.

Labels: MAGANDE, PROCUREMENT SYSTEMS

posted by MrK @ 4:23 AM