Contracted energy group has delivered no fuel to SAA for six months | Fin24
 
  • Mandela Day

    Nationalisation, privatisation and land: What Mandela told business in 1990 still resonates today.

  • African Foothold

    American multinational PepsiCo has agreed to buy South Africa’s Pioneer Foods for about R24.4bn.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

Contracted energy group has delivered no fuel to SAA for six months

Jun 25 2019 22:03
Jan Cronje, Fin24

Despite being contracted to provide 2 million litres of jet fuel per month to state-owned airline SAA at OR Tambo, EML Energy has not provided any fuel since November, the judicial commission of inquiry into state capture heard on Tuesday.  

The inquiry, which has been investigating allegations of state capture, corruption and fraud at state entities since August 2018, is currently focusing on the airline industry.

Mark Vaughan, the head of fuel management at the flag carrier, told the commission that EML Energy was one of eight companies that won tenders to supply a portion of 40 million litres of jet fuel per month to SAA at OR Tambo for the year between July 2018 and June 2019.

The others were BP, Shell, Chevron, Sasol, Total, Puma and Engen.

But EML only provided fuel for 2 months and 15 days. Its contract, which has not been cancelled, is set to expire in a few days.

Vaughn said that EML supplied fuel for half the month of July, did not supply fuel for August, then again supplied fuel for the months of September and October. Since November it has not supplied anything.

He said EML did not produce its own jet fuel but sourced it via one of the major energy suppliers. During the period of its contract, it sourced fuel from Total and Shell. 

As SAA had been cutting down on unprofitable routes over the period, EML's inability to supply the fuel "wasn't an issue", said Vaughn. When asked by advocate Kate Hofmeyr if the shortfall would have been serious if SAA's fuel use had been higher, he said it would have been.

It was not clear from his testimony why EML stopped supplying fuel in November 2018. Hofmeyr, meanwhile, told the commission that Vaughn's testimony would play a role in linking evidence that is yet to be presented. 

EML Energy has not testified at the inquiry. It is unclear if a representative will be giving evidence. 

This is not the first time that group, which is based in Kempton Park in Gauteng, has been mentioned in the inquiry.

Earlier in the week the inquiry heard that SA Express in 2017 signed a R2.4bn contract with EML to procure jet fuel for three years.

The contract was later cancelled after staff raised concerns about the price of the fuel that EML would be supplying, and why it would be supplying fuel at airports where SA express could already source fuel via SAA.

The inquiry continues on Thursday.

eml energy  |  saa  |  sa express
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

FaceApp has been at the centre of a debate on data security. What is your view?

Previous results · Suggest a vote

Loading...