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THE Competition and Tariff Commission is investigating allegations that Total Zimbabwe, a French registered oil company, is refusing to sell some of its assets to local businesspeople.
The commission last Friday conducted hearings into Total’s compliance with its directive that it should dispose of excess assets.
The directive is one of the conditions the commission gave to Total when it approved its merger with Mobil Zimbabwe in 2006.
Players in the fuel industry alleged that they have made several attempts to negotiate for some of Total’s assets without success.
“Total still has two or more depots co-existing in Harare, Bulawayo, Masvingo and Gweru among other areas and this translates to excess”, National Oil Company of Zimbabwe (Noczim) marketing and distribution director Chrispen Mashange said.
“We also have cases whereby Total Service stations are found 500m apart and that too translates to excess.
“We think that Total should have disposed of some of the sites that co-exist as holding on to them is blocking competition.”
In its presentation, the Indigenous Petroleum Group of Zimbabwe (IPGZ) alleged that some Total depots were being underutilised in Bulawayo, Gweru, Chiredzi, Kariba and Mutare.
IPGZ said despite the commission’s directive four years ago, Total was yet to put the assets on a public offer, adding that selling them to other players would be of benefit to the economy at large as they were most likely to be fully utilised by the new owners.
Others alleged that Total was demanding “reckless and outrageous” prices for the assets which are now too old to be sold at high prices, with one alleging that in one instance, Total was charging US$35 000 for a tank installed more than 15 years ago. A similar brand new tank costs US$7 000 in South Africa, they said.
Another oil industry representative complained that in 2008, Total Mutare was being priced at US$10 million, an amount he said was too high given the depot’s small size.
There were allegations that Total is not considering the age, obsolete state and outdated technology of some of its assets.
“The problem is that the commission left it in Total’s discretion to decide on what to dispose of and also how to evaluate whatever it is disposing of hence all these problems”, Sakunda Energy managing director Kuda Tagwirei said.
“We are not being given a fair value and we need an independent evaluator who will act as a referee and give us a fair value of the assets we want to buy. We have been failing to do so because of disagreements over the value.
“The values that Total has been pushing for in some cases are three to four times values of new assets in South Africa.”
It was also alleged that Total lied to the commission that some players had benefited from its assets disposal, with Martin Mataranyika from Falcon Motors and Constance Shamu from Lake Service Station saying they were shocked to hear that Total had cited their companies as beneficiaries.
“We leased a Mobil Service Station and invested a lot of money in rebranding it,” Mataranyika said.
“Before we started operations, we got a call from one of our men on site telling us that Total had come and removed all the equipment.
“We are a very young indigenous company and we had put in a lot in that project in an attempt to contribute to this economy.”
Shamu said her company’s case proves that Total is doing all it can to ensure that local people do not buy its assets saying she was charged an “outrageous figure for very old pipes”.
The players said they wanted to buy Total’s assets because they cannot get land to build as municipalities across the country are saying that there are too many service stations in the country.
Total strategy director Stanley Hatendi told the commission that his company had identified the excess assets as per agreement and was only asking for a value they felt was fair to the company’s shareholders.
He added that the value was determined by the company’s professional evaluators.
Hatendi also said some depots were still flying Total colours although their ownership had since been changed.
Government officials at the hearing urged Total to comply with the directive, with others reminding the company that the Indigenisation Act was “now operational and Total is expected to comply like all other companies”.
Commission chairperson Dumisani Sibanda advised Total to furnish the commission with its valuation methodology and list of beneficiaries by Friday.
He also asked other stakeholders to make submissions identifying areas where Total assets are located.
The submissions will inform the commission’s way forward, he said.
BY JENNIFER DUBE
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