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Stakeholders Doubt On swiss firm ADAX Bulk Procurement System (BPS) Winner

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by R.B, Sep 5, 2012.

  1. R.B

    R.B JF-Expert Member

    Sep 5, 2012
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    Some stakeholders in the oil sector have expressed doubts on whether the firm that replaced another Swiss based Agusta energy in the supply of petroleum will bring any efficiency because of the nature of the criteria used by the coordinating body.

    The Geneva-based Addax Energy last week won the hotly-contested bid process that will see the firm ship a consignment of petroleum through the Bulk Procurement System (BPS) to cover the month of October this year.

    The Tanzania Truck Owners' Association (TATOA) Executive Secretary, Mr Zacharia Hans Pope said in an interview in Dar es Salaam last week that using price as criteria for picking the lowest bidder could in turn lead to importing low quality petroleum products.
    "The firm that won the tender, like any other in the world, aims at maximising profit thus it will never procure high quality fuel products at the price above the weighted average premiums offered during the tendering process," he remarked.
    Addax Energy SA that won the fourth petroleum importation tender offered 53.87 weighted average premiums for diesel, petrol, aviation fuel (Jet A 1/K) and kerosene. It will import 232,000 tons for domestic and transit fuel to cover the month of October.
    He said for example, the fact that a certificate of quality is issued at the loading point, may make it difficult to reject the oil consignments at the Dar es Salaam port because there is nowhere to get replacement in a short period of time.
    Announcing the tender results in Dar es Salaam, the Petroleum Importation Coordinator (PIC) Chairman Mr Shanif Mansoor said the winner beat Augusta Energy SA (Geneva) which came second, Vitol SA (Geneva and London) which settled for the third slot, Geneva-based Trafigura PTE Limited (fourth) and Sahara Energy Resources (Nigeria) which came last.
    Augusta Energy SA which came second offered 62.976 weighted average premiums, Vitol SA (64.331), Trafigura PTE Limited (65.4) and Sahara Energy Resources (77.5). The bidders which pulled out of the race include Swiss Singapore (Dubai) and Kobil Kenya.
    Under the newly-introduced regulations, the tender size has been reduced to 30 days instead of 60 which covered the previous three tenders to cut further the demurrage period currently at three days where six out of former eight oil vessels will be berthing at the Kurasini Oil Jetty (KOJ).
    During the tender process, all bidders signed a document obliging them to adhere to quality standards, short of that they will be penalised.
    The Tanzania Bureau of Standards (TBS) has said that all importers of gasoline that the current Tanzania Standard for gasoline (TZS 672:2009) does not allow for blending of gasoline with ethanol/alcohol.
    The Augusta Energy SA that won the previous three consecutive tenders suffered serious accusations of importing petrol that contained ethanol beyond the country's allowable specifications.
    In the meantime, East African Region has decided to harmonize fuel standards to get rid of current irregularities experienced from one country to another clearing the existing confusions pertaining to uniform fuel specifications each member state should possess and follow.
    The PIC General Manager Mr Michael Mjinja said the PIC will send to Mombasa at own cost, six samples out of 17 needed for testing of the oil quality standards. Currently, TBS manage to conduct tests to only 11 parameters against the required 17 parameters.
    "All these are efforts done by the PIC to ensure Tanzanians get quality fuel which meet the required standards," he insisted. He said the transit fuel consignments will also undergo same testing to block all chances of dumping on the local market. It is on records that Tanzania was losing around Tsh30b ($19m) monthly due to activities related to fuel adulteration. Addax Energy SA Product Trader Mr Julien Seddiki said his company was capable and has financial muscles to meet the tender expectations. "We are happy for emerging winners this time and it is an opportunity for our firm to deliver quality fuel products to the Tanzanians," he remarked.
    The Bulk procurement system was introduced in a bid to, among others, bring down fuel prices to exploit economies of scale, enhance availability of fuel and increase government revenue collection from trade and other activities related to petroleum products. Between January and June, this year, a total of 1,808,958 metric tons of petroleum products were imported through the system out of which 617,178 tons were destined for transit to neighbouring land-locked countries.
  2. R.B

    R.B JF-Expert Member

    Nov 2, 2012
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