A five year R15,5 billion contract to supply fuel to Transnet has been awarded to nine black and women owned companies. Following the announcement of this historic deal Simon Foulds speaks to Public Enterprises Minister Malusi Gigaba and Transnet Group Chief Executive, Brian Molefe after the announcement.

This is the biggest contract to date awarded by Transnet, following a rigorous tender process. Between them, the nine companies will be responsible for supplying Transnet with home-based fuel which will be stored at Transnet sites around the country, supplying diesel lubrication for all of Transnet’s locomotives as well as supplying Transnet with marine dieselfor port equipment like dredgers and tug boats.

Gigaba says, “Transnet’s economic expansion must not stop once the contract has been awarded, we must also ensure we can also grow the companies supplying the tenders to the state owned enterprise. We are engaging with small businesses because we realise the importance of this vital segment to the economic growth of the country. It is also the shortest route to develop skills required by state owned enterprises like Transnet.”

Following a rigorous open and public bidding process overseen by a committee of the Board of Directors, Transnet appointed nine companies – Afric Oil, Borutho Gas Supply, Gulfstream Energy, KZN Oils, Mzumbe Oil, NRW Trading and Logistics, Tlhokaina 21, Women Of Africa Fuels and Oils, and YemYem Petroleum – to cover Transnet’s fuel requirements.

Eight of the nine suppliers are 100% black owned. Five of them are more than 80% women owned. Encouragingly, three new entrants have been introduced into the industry.

The successful bidders were assessed on price, which accounted for half of the scoring, supplier development, B-BBEE and technical ability among others. In addition, Transnet conducted a thorough assessment of the short-listed bidders to ensure that all of them had the required capability and capacity to service Transnet’s operational requirements.

Gigaba says: “When the President announced Transnet’s Market Demand Strategy in his state of the nation address in 2012, he said it was intended to revitalise South Africa’s Transport and logistics infrastructure which Transnet has custody of. Further, he challenged us to use programmes like these to create employment, develop skills and pioneer the creation of a new class of industrialists – especially among black people. Transnet has successfully met the challenge.”

Brian Molefe, Transnet Group Chief Executive, says, “Given the size and the quantum of the contract, and the central role fuel plays in Transnet’s operations, this assessment meant we could comfortably award the contract knowing that security of supply for the company is assured.”

“The contract contributes significantly to Transnet’s supplier and enterprise development goals, target and ambitions especially in relation to skills development, job creation, technology transfer and rural integrations. In line with this commitment, Transnet is further providing support to the new entrants through mentorship programmes.”

“Over the next six years, Transnet is spending R307 billionon its infrastructure – building ports and expanding them, buying locomotives, wagon and other rail assets and infrastructure and assets while at the same time spending almost a similar amount on its operational expenditure over the same period.”