Well-informed sources say Mina Corp, the current fuel supplier to the Manas Transit Center in Kyrgyzstan, is pulling out of the bidding for the latest fuel contract.
Mina Corp executives are reportedly unhappy with the terms of the new solicitation, under which the Defense Logistics Agency (DLA) could opt to purchase just 10 percent of the total amount of fuel consumed at Manas, even if a supplier offered to meet requirements in full. US government sources say the new solicitation, issued in early May, is structured in a way that allows a Kyrgyz-Russian enterprise, Gazpromneft-Aero-Kyrgyzstan, to control 90 percent of the base’s fuel needs. With only 10 percent of supplies guaranteed to be in play, there’s not enough of a profit incentive for Mina Corp to stay in the bidding, according to one source.
“It’s no longer worth the risk. There isn’t enough left in it to make it worth their while. They are taking all the up-front management and investment hit, the return is not big enough,” the source told EurasiaNet.org.
Mina Corp representatives would neither confirm nor deny that the firm is out of the running. “Mina Corp does not comment on confidential solicitations being conducted by US Government federal agencies,” said John Lough, spokesman for the company, on June 22. Manas Transit Center is a key logistics hub for US and NATO military operations in Afghanistan.
A spokeswoman for the DLA was circumspect in commenting on Mina Corp’s role in the solicitation. “In order to protect the integrity of the acquisition process, DLA does not release the names of offerers, or information related to ongoing procurements,” the DLA representative said.
Mina Corp’s current fuel-supply contract expires in November. But the firm retains a one-year option that could see it supplying fuel to the air base outside the Kyrgyz capital Bishkek into 2012.
One industry analyst said Mina Corp’s decision to pull out of the bidding, if accurate, would be a “major headache” for DLA. Despite being dogged by controversy and being the subject of USA congressional probe, Mina has maintained an unblemished record for reliable fuel deliveries.
Gazpromneft-Aero-Kyrgyzstan, the heir-apparent fuel supplier, is an unproven entity. Although the company currently makes deliveries of civil aviation fuel to Manas International Airport, it has no track record for supplying the military base. Gazpromneft-Aero-Kyrgyzstan is currently subject to DLA due diligence procedures, which are expected to be completed within weeks.
US government sources suggest that Gazpromneft-Aero-Kyrgyzstan is likely to be supplying a portion of the current fuel contract to Manas by early September. Gazpromneft-Aero-Kyrgyzstan is partly owned by a subsidiary of the Kremlin-controlled Russian energy giant, Gazprom. A Bishkek-based observer told EurasiaNet.org that Gazpromneft-Aero-Kyrgyzstan’s lack of performance to date was because the Russians subjected the Kyrgyz side to longer and tougher negotiations than expected.
Deirdre Tynan is a Bishkek-based reporter specializing in Central Asian affairs.