DA to request Treasury intervention in fuel fund deal
30 June 2016
The DA will submit a letter to the National Treasury requesting that the dodgy Chevron deal be investigated and prevented from going ahead. In such a dire economic climate, the government has no need to spend public money on establishing a retail presence in the fuel sector that may cost up to R15 billion.
This is money that could be better used on boosting economic growth, creating jobs, and delivering better services.
Our 9 June letter to the Minister of Finance, Pravin Gordhan, that requested Treasury to confirm whether it has received any funds from the illegal sale of the national fuel reserves, has not yet received acknowledgement.
This comes after it was reported that the Strategic Fuel Fund (SFF) had offered to purchase Chevron’s SA assets which include the Cape Town refinery, Durban lubricants plant and 845 retail fuel stations.
Minister Joemat- Pettersson’s stubborn determination to access the fuel sector comes on the back of a previously failed attempt by the Central Energy Fund, the parent company of the SFF, to purchase Engen’s assets and fuel stations in 2013. This R100 billion deal was blocked by Treasury and is seen by many insiders to be the reason for Mr Gordhan’s lack of reappointment as Finance Minister. The failed deal still needs to be investigated to determine whether any excessive consulting fees and payments were justified.
The purchase offer also follows the sale of SA’s strategic fuel stock for $250 million in December last year at rock bottom prices of $28 a barrel. This sale has been escalated to the Auditor-General for scrutiny. Even more problematic is the glaring evidence that this sale was done so rapidly and without any involvement of Treasury.
Under the Public Finance Management Act (PFMA), the purchase of Chevron will require Treasury’s approval. According to the PFMA, section 54(2d):“Before a public entity concludes any of the following transactions, the accounting authority for the public entity must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the transaction to its executive authority for approval of the transaction: (d) acquisition or disposal of a significant asset.” This purchase will entail a significant asset.
Treasury is the bastion in stemming the flow of tax payers money to patronage and wasteful expenditure.
The DA will continue to fight for tax payers money to be used in areas of crime prevention, job creation and service delivery to all.
Issued by Pieter Van Dalen, DA Shadow Deputy Minister of Energy, 30 June 2016