RUSSIAN ROULETTE
Cabinet signs off on controversial R3.7bn Gazprombank deal to reboot Mossel Bay refinery
Russia’s Gazprombank – currently under US sanctions – has now been endorsed by South Africa’s government to refurbish the gas-to-liquids refinery in Mossel Bay.
The announcement was made on Monday in a statement concerning the Cabinet meeting on Friday, 8 December.
“Cabinet endorsed PetroSA’s recommendation to select Gazprombank Africa as the investment partner for the reinstatement of the plant and production. Cabinet noted that this selection of Gazprombank is still dependent on the Final Investment Decision that will be informed by a joint bankable business case,” the statement said.
Gazprombank, Russia’s third-largest lender by assets and the de facto financial arm of Russia’s state-owned gas company Gazprom, was hit by US sanctions in the wake of Russia’s invasion of Ukraine almost two years ago.
The sanctions are not as biting as those applied to other banks, and Gazprombank is still allowed to transact in dollars and retains access to the international SWIFT bank messaging system, not least because of European reliance on Russian gas.
“These sanctions are not applicable to South Africa,” Sesakho Magadla, PetroSA’s acting chief operations officer, was quoted by Reuters as saying at a media briefing on Monday.
Read more: South Africa picks Russia’s Gazprombank as PetroSA refinery partner | Reuters
The push by state-owned enterprise PetroSA to have Gazprombank selected as the investment partner to reboot the refinery in Mossel Bay has been controversial, to say the least, and is another indication that the ANC government is being drawn into the geopolitical orbit of a Russian state that is widely regarded as corrupt, authoritarian and at loggerheads with the West.
The saga has been scrutinised in detail by amaBhungane, which last month reported that the bidding process was heavily slanted in Gazprombank’s favour.
Read more in Daily Maverick: PetroSA pushes for R3.7-billion deal with Russia’s Gazprombank
“Twenty companies submitted bids, but the unusually strict technical criteria meant that 19 of the 20 were eliminated, leaving Gazprombank’s local subsidiary, GPB Africa & Middle East, as the only qualifying bid,” amaBhungane reported.
It also said that leaked documents indicated that red flags about this choice were raised by the PetroSA bid evaluation committee and board. Yet it pushed ahead with the deal.
The 45,000 barrels-per-day Mossel Bay plant has been closed since December 2020 when it ran out of feedstock, and there are concerns about the security of fuel supply in Africa’s most industrialised economy after the closure of the Sapref and Enref refineries.
South Africa has a disheartening knack for running low on crucial things. Power and water immediately spring to mind.
PetroSA’s current business model effectively revolves around the purchase of imported diesel for resale to Eskom, so rebuilding its refining capacity is seen as crucial.
But striking deals with sanctioned Russian banks will be regarded with suspicion, given Russia’s corrupt reputation – not to mention that of the ANC – and the way the bid was handled.
Gazprombank, not famed for its transparency, will share in the profits from the refinery, and where some of those get channelled is a fair question to ask, under the circumstances.
The South African Reserve Bank warned in May that perceptions that South Africa’s “neutral” stance on the Russia-Ukraine conflict is a Potemkin one could have devastating consequences for the country’s financial stability if secondary sanctions were imposed as a result.
Read more in Daily Maverick: Reserve Bank warns of a shock to the system over SA’s ‘neutral’ Russia-Ukraine stance
Given the stakes involved, it seems PetroSA and the government are playing a high-stakes game of Russian roulette. DM
Now we know why the ANC was desperate to postpone the liquidation process till Tuesday. Russian drive a hard bargain and would not pay until parliament okay’s this deal. Let’s see what happens now … follow the money guys, our country is about to be sold for a measly R100m.
“Russian state that is widely regarded as corrupt, authoritarian and at loggerheads with the West” is a euphemism for pariah state responsible for multiple war crimes and total disregard for human life and international conventions.
The leader of their opposition is in jail and seems to have disappeared. Others in opposition die mysteriously while others get shot out of the sky. Where independent media has been totally snuffed out. All quite normal in russia.
If you want to know the character of any person or organisation, look to see who their friends are.
“corrupt, authoritarian and at loggerheads with the West” are we talking about South Africa or Russia?
Watch out for more poison pills as the ANC lemmings head for Dubai as the elections approach.
Two hopes for the future. 1) is that the business case is properly evaluated and the likely flawed assumptions contestable in court. 2) The ANC is kicked into touch and the winner commits to hunting down every person in the food chain that benefitted from ANC theft!
slow motion train crash in motion! what an utterly predictable rat’s nest of corruption this is going to be.
This week sees the last of our children and their young kids on an outbound one way flight. Hallelujah!
One is judged by one’s friends, and when the world’s political criminals are your best friends, it tells everything about your own lack of a moral and ethical backbone, but that’s the ANC! As a matter of fact, the ANC wouldn’t be able to find the “moral high ground” with the aid of a map, a search party AND GPS!
The ANC needs money to fight an election.
The experts have already explained that the entire plan is uneconomical, simply because there is not enough gas reserves there. However we all know what this is really about…
a) looting by ANC and connections
b) cosying up to a fellow pariah state
c) giving the middle finger to the West
Sinking, sinking, sinking … ever lower !
An incestuous cadre and elite feeding frenzy with backhanders/rebates to the ruling party as well. Why the total secrecy when this is a SOE, bailed out and funded by us the taxpayers??? Mantashe, that wicked old geriatric, way past his sell by date and intelligence, and clinging to the miserable and failed communist dogma of central control, maintains that it is not necessary to divulge the terms and conditions of supply etc., quoting that companies are not required by law to divulge such confidential supplier agreements!!! Mantashe – you are conflicted and confused, as always. You are a public servant, extravagantly remunerated by the SA taxpayer in charge of minerals and energy (in charge???) and running PUBLIC not private companies!! We have every right to know, but in typical anc fashion, they willfully confuse self/party interest with SA’s best interest. We are no different to Putin’s Russia – criminal, parasitic and predatory with wholesale rape and theft of the country’s resources under the guise of NDR. Putin has his oligarchs, who pay homage and kickbacks to him – we have the abominable anc with their elite and cadres – no difference!!
Nicely put!
The ANC obsession with Russian projects is because extorted taxpayer money can be laundered through the Gazprombank parrallel banking system, which has minimum oversight from Western anti-terrorism, sanctions and money-laundering controls. One hopes that civil society organisations will once again challenege this decision in court, and make the entire process subject to oversight by forensic auditors.
The west ain’t clean either. Russia is singlehandedly standing up to a bully and his girlfriends.
If you HAD to emigrate, would you emigrate to Russia, or to one of the Western countries?
I thought so.
Russia is the bully
Stephen Grootes interviewed one of Petro SA’s deprtment heads this morning. Missed her name but the arrogance was unbelievable. Her sneering remarks about “You media” and her refusal to give straight answers to Grootes’ specific and probing questions is symptomatic of everything the ANC tries to control and very seldom gets right. The Gazprom Bank is not the way to go. Anything to do with Russia is bad for SA and does severe damage to our image with our business partners in the West which accounts for vastly more business than Russia could ever dream of. The ANC, backing losers as usual.
ANC does not care a jot about what the west think. The west are just odious, greedy, horrible capitalists (who provide jobs and pay taxes by the way). No such thing as an honest communist – a contradiction in terms, from way back to Stalin, Lenin and pretty much all of the ANC extending into the NHI.
The deal stinks….guaranteed!
My question is: Why does the Government not approach the OEM’S (Original Equipment Manufacturer’s) to do the necessary work? I can only imagine that some of those OEM’s have strict anti-corruption policies that stop the ComRAIDS from getting anything out of the feeding trough. (I worked for one of the OEM’s and we had to sign these documents for every large tender )
The odds of this being above board are vanishingly low. Anything the ANC the touches should be considered crooked until proven beyond a shadow of a doubt not to be.
It is not just perpetuating the corruption, but also lending a ‘helping hand’ to a valued close friend to assist in further money laundering. Russian friendship rules!
Wouldn’t it be easier and more honest if we just paid 80% of ALL tax into an ANC slush fund, the be spent on booze, clothing and hookers as they wish.
(Basically like now, just more honest)
Then the remaining 20% of tax could be managed by private industry to fix SA.
For their 80%, the ANC would simply be request to do NOTHING, which would be infinitely less damaging to our country then their actually trying to do something.
The would avoid SO many convulted systems put in place to steal the tax and would empower us to start to fix the country. The ANC would simply exist as a collection entity and it’s member can have their factional battles, conferences and meetings.. then once voted in… the next group of ANC members and leaders could stay at home and eat and drink until their Italian shirts explode.
It’s basically a simplified and cheaper version of what we have now… and with all the unnecessary steps removed.
Last desperate ‘dash for cash’ by the soon to be, unemployed cadres of the ANC.
Only 5 months to 2024 election!
Andre, rge ANC and IEC already have printed the results…..hidden in a sofa at Phala- Phala
SA must trade this deal in Rands or Rubles. to _ _ ell with US sanctions
Hahahahaha
This has nothing to do with US sanctions rather it is more likely it has everything to do with ANC funding from Russia.
Where is my comment, posted about an hour ago???
Amandla to the deal between Petros and Gazprombank, I salute our friendship with Russia. Price of petrol will decrease ✊🏽✊🏽
It is a great decision, it makes lots of business sense, and it shows that South Africa will not be a colony of the United States, but is a free country . DA on the contrary wants South Africa to be a colony of the United States and is already receiving orders from the Biden regime, and I hope that it will never be in the government of South Africa will become a colony