Namcor fuel import bid needs 'tweaking'

13 August 2018 | Energy

Namcor has had to go back to the drawing board as it makes a renewed bid to have its 50% fuel import mandate restored by government.

The state oil and gas company was stripped of the responsibility by former mines minister Isak Katali, after this mandate had led to its technical insolvency.

Namcor spokesperson Utaara Hoveka said the bid was getting the necessary attention.

“The restoration of the 50% fuel import mandate is one of Namcor's strategic priorities. We have been seized with the matter for quite some time and it enjoys our finest efforts,” he said.

“We handed in a formal bid for the restoration of the 50% fuel import mandate to the minister of mines and energy about a month ago.”

Hoveka said prior to this latest submission, Namcor had made several other similar attempts to the ministry, where changes were suggested.

Mines minister Tom Alweendo also provided an update on the issue, saying: “Namcor has not, as yet, formally requested the restoration of its import mandate. When they do so the government will look at the measures that Namcor has put in place to avoid the pitfalls experienced the last time when they had the mandate.”

Namcor in 2008 signed a 50-50 fuel supply deal with Glencore and its subsidiary Petroneft International.

The agreement was cancelled in 2010, after government said it was not favourable to Namibia at the time.

Within the first nine months of starting to trade with Glencore, Namcor suffered losses of around N$195 million, plunging it into technical bankruptcy, according to an audit completed in October 2009.

Glencore succeeded in the High Court in 2011 with its challenge against the cabinet decision to suspend the contract.

The court ruled the decision was in conflict with the constitutional right to fair procedure. Government eventually paid N$538 million to Glencore, when it terminated the supply contract. Private fuel companies were then tasked to import fuel.

OGONE TLHAGE

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