The Namibian (Windhoek)

13 July 2006

Namibia: BEE Fuel Deal Still Murky

Windhoek — NAMIBIA Liquid Fuels, which has a three-year contract to import 50 per cent of all Namibia's liquid fuel requirements, yesterday tried to defend the biggest-ever BEE deal made in Namibia, but left more questions hanging about the controversial deal.

Ranga Haikali, former trade unionist turned business tycoon, sought to justify the deal against what he termed "an atmosphere of animosity" and appealed to the Anti-Corruption Commission to complete and publish the results of its investigation.

According to Haikali, an earlier probe by the Central Governance Agency into the same deal gave it a clean bill of health.

However, he noted that the company had not been able to obtain a copy of this report, of which only two are known to exist.

As in the CGA investigation, NLF pledged its co-operation to the ACC, he said.

Haikali, the largest single shareholder in the NLF deal, evaded direct questions about how much the deal was worth, maintaining that there had not been any undue influence from any of the parties involved during the tender process.

Namibia Liquid Fuel is a joint venture between South African petroleum company Sasol and a local off-the-shelf entity Philco 20 (Philip Ellis Company 20), in which a slew of top Government officials hold shares.

These include Haikali (14 per cent), Director of Economic Affairs in the Office of the President Leevi Hungamo (12 per cent), another State House employee Naeman Amalwa (10 per cent), Secretary to the President Ndeutala Angolo-Amutenya (8 per cent), James Hatuikulipi (8 per cent), the South African Luke Mabaso (8 per cent), with the balance held in the Kapande Development Trust (40 per cent).

The Kapande Trust in turn is shared out to Hanganeni Investment Holdings (40 per cent), the National Youth Service (17,5 per cent), the Eudafano Women's Co-operative (17,5 per cent) and Etango Investments (25 per cent), according to press release handed out at the press conference yesterday.

Haikali however did not disclose that he owns another chunk of shares in Etango via his family trust (30 per cent via his Tulongeni Family Trust), or adequately explain shares held in Hanganeni by Hungamo, Angolo-Amutenya, Sackey Shanghala and Hatuikulipi (10 per cent each) or the same shareholdings in a subsidiary to Hanganeni held in Mekondjo Investment Holdings CC.

Haikali, flanked by Hungamo and the newly appointed but utterly silent NLF CEO Mulife Siyambango, said they had borrowed N$150 million from Bank Windhoek and Absa to finance their equity share via Philco 20.

This was to be raised to N$200 million to deal with fluctuating international oil prices, he added.

He said instructions have also been given to effect a name-change to Philco 20 as well as hire local staff and set up local offices - more than a year and a half after they obtained the contract.

Repeated questions yesterday on how much fuel they had supplied so far, and what value they added to a deal that is run by and large from Sasol's Johannesburg offices, remained unanswered.

But Haikali and Hungamo persisted with their defence of the deal, which they said was in line with Government's desire to ensure secure fuel supplies as well as allow Namibian participation in the fuel wholesale business.

Accusations by rival group Namibia Energy Corporation (Namenco) of undue influence by especially the top Government officials were unfounded and ultimately dismissed by the Namibian High Court, he said.

NLF had at no stage had any agreement with Namenco in this regard, but Namenco instead had approached Sasol directly, disregarding the Namibian majority shareholders, Haikali said.

Namenco, which wanted a contract to transport the fuel from South Africa's largest refinery Natref, lost its legal bid when Judge Mavis Gibson ruled it was not urgent.

Namenco has also disputed NLF's version of events leading up to the awarding of the contract, pointing out that NLF was only formed shortly after the tender for liquid fuel supplies to Namibia was invited in 2004.

Haikali also dismissed rumours that NLF or Philco 20 were not registered as taxpayers, but declined to say how much they have contributed to the tax coffers.

Allegations that NLF was responsible in any way for the lack of aviation fuel late last year were also false, as NLF had no distribution network in Namibia.

NLF was confident that it would meet the conditions set out in the tender, as well as build local capacity and transfer skills to local Namibians, all of which would be done by the newly appointed CEO Siyambango, Haikali said.

"We state that neither NLF nor any of its shareholders controls or has the ability to affect in any way the retail price of fuel at the pump or at all," Haikali said, noting that pump prices were set by the Ministry of Mines and Energy.

"We furthermore state that neither of the aforesaid parties has any control or impact on the National Energy Fund, which is similarly controlled by the relevant Ministry," he said.

On accusations that this appeared to yet another case of elitist "fat cat" deals done at the expense of the Namibian economy and the State, Haikali said they had appealed to Government to come up with rules for BEE (Black Economic Empowerment) deals.

NLF and its shareholders were 'just black entrepreneurs who needed the money and took advantage of a given situation', Haikali said.

All the capital raised to finance their equity came without any form of Government backing or guarantees, he said.

"We would also like to put it on record that none of the people who are alleged to have misused their position in Government had any say whatsoever in the granting of this tender and that could have been cleared by such an investigation," Haikali concluded.

John Grobler is a freelance journalist

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