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The management of Cool Petroleum is moving to clear the air over its contract to supply fuel to the Jamaica Urban Transit Company (JUTC).
The contract is the subject of an investigation by the Office of the Contractor General following reports that the state-owned bus company is paying 28 per cent more than it would if it bought the fuel from another state-owned entity, Petrojam.
No truth to claim
But chief executive officer of Cool Petroleum, Joe Issa, says there is no truth to that claim.
In a letter to Transport Minister Mike Henry, Issa says his company sells fuel to the JUTC with a mark-up, which is less than half of a percentage point.
According to Issa, if the JUTC were to purchase the fuel directly from Petrojam, it would pay the price that all other purchasers paid, which would result in a saving of less than one per cent and nowhere close to the 28 per cent difference quoted in the reports.
Credit terms
But Issa warned that in that case, the JUTC would not enjoy the credit terms offered by his company.
He said Cool Petroleum offers the JUTC 30 days credit, while it would get seven days credit from Petrojam.
"Currently, the JUTC is in breach of its credit arrangements (to Cool) by $74 million," Issa said.
He further claimed that Cool Petroleum had assets valued at $80 million at the JUTC depots.
Issa indicated that Cool inherited the JUTC contract when it purchased the local Shell operations back in 2006. Shell was awarded the contract to supply fuel to the JUTC in 1999, and the contract was renewed in 2004.
On Wednesday, the Office of the Contractor General announced that it was probing several contracts issued by the JUTC. These include a contract valued at $124.5 million to a security company headed by the chairman of the National Solid Waste Management Authority, and a contract issued to an entity which listed murdered JUTC chairman Douglas Chamber as the majority shareholder.
The contract is the subject of an investigation by the Office of the Contractor General following reports that the state-owned bus company is paying 28 per cent more than it would if it bought the fuel from another state-owned entity, Petrojam.
No truth to claim
But chief executive officer of Cool Petroleum, Joe Issa, says there is no truth to that claim.
In a letter to Transport Minister Mike Henry, Issa says his company sells fuel to the JUTC with a mark-up, which is less than half of a percentage point.
According to Issa, if the JUTC were to purchase the fuel directly from Petrojam, it would pay the price that all other purchasers paid, which would result in a saving of less than one per cent and nowhere close to the 28 per cent difference quoted in the reports.
Credit terms
But Issa warned that in that case, the JUTC would not enjoy the credit terms offered by his company.
He said Cool Petroleum offers the JUTC 30 days credit, while it would get seven days credit from Petrojam.
"Currently, the JUTC is in breach of its credit arrangements (to Cool) by $74 million," Issa said.
He further claimed that Cool Petroleum had assets valued at $80 million at the JUTC depots.
Issa indicated that Cool inherited the JUTC contract when it purchased the local Shell operations back in 2006. Shell was awarded the contract to supply fuel to the JUTC in 1999, and the contract was renewed in 2004.
On Wednesday, the Office of the Contractor General announced that it was probing several contracts issued by the JUTC. These include a contract valued at $124.5 million to a security company headed by the chairman of the National Solid Waste Management Authority, and a contract issued to an entity which listed murdered JUTC chairman Douglas Chamber as the majority shareholder.