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Trafigura, Gunvor deals above board - Zulu

Trafigura, Gunvor deals above board - Zulu
By Chiwoyu Sinyangwe
Mon 04 June 2012, 06:58 CAT

THE selection of Trafigura and Gunvor to supply finished petroleum products and crude feedstock was done above board, says energy permanent secretary George Zulu.

The selection of Gunvor of Russia to commence negotiations with the government for possible contract to supply of 1.4 million tonnes of commingled feedstock and Trafigura on the supply of 216,920,000 litres of diesel and 21,230,000 litres of unleaded petrol for the next two years, has raised an uproar with allegations of corruption being thrown at the selection process.

Some sources close to the transaction say the hiring of Trafigura would result in the country losing US$2.2 million annually as the firm's bid was fifth in price variances in which Dalbit of Kenya was the cheapest.

But Zulu said the current tenders were the "most open", dismissing all accusations of corruption in the process.

Zulu, who said there was "a lot of distrust" in the country, said the decision to hire Gunvor and Trafigura was purely done by technocrats he led from his ministry without "undue influence from above".

"What is the government not doing for me to go and accept a bribe so I end up going to jail?" Zulu said in an interview yesterday.

"A lot of people from my ministry feared to participate in this process because of previous experiences. What you are seeing now is a manifestation of what was happening in the past. There is a lot of distrust with anything that we do. This is the most open tender and it has been discussed everywhere, and it was done above board. We are as much loving of Zambians as all those concerned. We want to be of service to the President and people of Zambia. When the President says he is fighting corruption, he is serious. So, this deal was done above aboard."

Zulu said he was not concerned about reports of alleged environmental damage in some parts of Africa by Trafigura where it illegally dumped toxic wastes resulting in it being fined US$1million (about K5.2 billion).

And in a recent article dated May 5, 2012, The Economist magazine revealed that the Swiss-based Russian oil supplier, Gunvor does not report its profits despite recording a revenue increase from US$5 billion in 2004 to US$80 billion in 2011.

The article stated that Gunvor had been recording tremendous growth in revenue despite the decline in its share of Russian seaborne exports of crude oil.

The Economist stated that Gunvor, which is the Kremlin's favourite oil trader, trades in Urals crude, a benchmark blend in north-west Europe and there are indicators that the company buys oil in Russia cheaply and, in theory, earns inflated profits when it sells the same oil on the international market at full price.

But Zulu insisted the two companies would operate by Zambian laws if the firms successfully negotiate their contracts.

He challenged anyone with evidence of corrupt activities in the contract awarding process to report to relevant crime investigative wings.

"Trafigura is already supplying the country; they run Puma former BP in Zambia," Zulu said.

"So, companies must operate within our laws. In Zambia, we have got laws related to safety of our people and the environment and so, if they are not going to abide by our laws, then we won't allow them to operate in here."

Zulu also said Trafigura was selected despite coming fifth in terms of price because the selecting committee based its decision on stability of price and supply.

"If our decision was based on the cheapest company, Dalbit would have been picked but there are other issues that the committee evaluating the tenders looked at," said Zulu.

Labels: FUEL, TENDER OFFERS, TRAFIGURA LTD

posted by MrK @ 2:28 PM