One month after winning a tender to supply Lebanon’s energy ministry with fuel-oil for three years, trading and investments company, The Argosy Group, is still waiting for final government approval to begin shipments, reported the Daily Star newspaper on Thursday.
The Lebanese-registered company is offering to supply the ministry with the 2.1 million tons of fuel-oil needed to power Lebanon’s electricity generating stations each year, for three years.
Argosy will supply the fuel-oil on a monthly basis in exchange for zero premium bonds from the Lebanese Central Bank, redeemable after three years.
Through this scheme, the government is not obliged to make the first repayment for three years. It would also save between $250 million and $650 million during that time in interest and lower prices, said the paper.
Argosy won the tender against five other fuel-oil importers on March 13, and has been on the Cabinet’s long agenda ever since.
The cabinet, said the paper, is expected to discuss the fuel-oil contract at this week’s meeting.
It must decide whether the bond that the government would exchange for the fuel-oil is considered government debt.
If the cabinet says it is, then the contract requires parliamentary approval. If not, then the cabinet can pass it in a decree.
The problem is that the government cannot afford to continue paying the current prices and on a monthly basis.
“The deal was so good we couldn’t turn it down,” said a source at the ministry.
“If we go back to the old system, then there might be a risk of electricity shortages,” he added – Albawaba.com
