‘New site for tender fraud’: EFF wary of SA’s new petrol company

The Economic Freedom Fighters (EFF) has expressed distrust about South Africa’s new state-owned petroleum company, saying the people of South Africa will not benefit from it.

It was announced last week the South African National Petroleum Company (SANPC) was formed following the merger of the Central Energy Fund (CEF) subsidiaries, iGas, PetroSA and the Strategic Fuel Fund.

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Government said the SANPC is poised to become a leading player in the country’s energy sector ensuring energy security, driving new technologies, developing and enabling essential infrastructure, fostering strategic partnerships and propelling social and economic development.

“It is also expected to oversee strategic planning, coordination and governance of the country’s petroleum resources, contributing to the country’s development and economic growth,” the government revealed in a statement.

The launch came after President Cyril Ramaphosa’s February 2020 State of the Nation Address where he announced government’s intention to repurpose and “rationalise” state-owned enterprises to support growth and development in South Africa.

EFF says petrol company will only benefit the elite

The party’s national spokesperson, Leigh-Ann Mathys has responded that the launch of the state entity is “not a genuine attempt to build state capacity”.

Instead, it is another move by the president to “further weaken state-owned enterprises and open the door for private sector profiteers”.

“[Ramaphosa’s] administration relies on outsourcing and tendering, which enriches the politically connected while depriving South Africans of much-needed affordable fuel and energy security,” she said.

Mathys also criticised the lease and assign model used, which will see certain assets of the merging entities leased to the new company, the SANPC, which the government said was the most effective approach for the merger.

“The SANPC’s ‘lease and assign’ model will only worsen corruption, making it a new site for tender fraud, rather than ensuring that the state takes full control of petroleum production and distribution.

“The EFF rejects the notion that this merger will lead to meaningful state ownership and control.

“Rather than producing fuel for the people, this entity will serve as a platform for private companies to exploit state assets.”

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Failure at other state entities ‘leaves little hope’ for petrol company

Mathys said the African National Congress’ track record of failure with Eskom, Transnet, and South African Airways (SAA) “leaves little hope that this new entity will benefit the people of South Africa”.

“Ramaphosa’s focus is on appeasing private interests while pretending to reform state institutions.”

The EFF spokesperson said a real state-owned petroleum company should have full control over the value chain, from extraction to refining, instead of outsourcing.

“Ramaphosa’s so-called restructuring is simply a mask to push the state out of key economic sectors and reduce it to a regulator while private businesses continue to rake in profits at the expense of ordinary citizens.”

Mathys also slammed the “rushed and disorganised” approach to how the Upstream Petroleum Resources Development Bill designated a National Petroleum Company to manage the industry before the SANPC even existed.

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