PETROLEUM BULK PROCUREMENT AGENCY

[PBPA]

PETROLEUM BULK PROCUREMENT SYSTEM IMPLEMENTATION

MANUAL, 2020

JULY 2020
 BPS MANUAL

TABLE OF CONTENTS

1. INTRODUCTION............................................................................ 4
1.1. Preamble ..................................................................................... 4
1.2. Objective ..................................................................................... 5
1.3. Functions of PBPA under BPS ........................................................ 5
1.4 System Outline (Framework). ........................................................ 7
2. LEGAL FRAMEWORK ..................................................................... 8
3. INSTITUTIONAL FRAMEWORK ..................................................... 8
3.1. Energy and Water Utilities Regulatory Authority (EWURA) ............... 8
3.2. Petroleum Bulk Procurement Agency (PBPA) .................................. 8
3.3. Weights and Measure Agency (WMA) ............................................. 9
3.4. Tanzania Bureau of Standards (TBS) .............................................. 9
3.5. Tanzania Revenue Authority (TRA) .............................................. 10
3.6. Tanzania Shipping Agencies Corporation ...................................... 10
3.7. Tanzania Ports Authority (TPA) .................................................... 10
3.8. BPS Prequalified Supplier ............................................................ 11
3.9. Oil Marketing Companies (OMCs) ................................................. 11
3.10. Single Receiving Terminal Operator ............................................. 11
4. REGISTRATION AND DEREGISTRATION OF OMCs .................... 11
4.1. Registration of OMCs .................................................................. 11
4.2. Deregistering of OMCs ................................................................ 12
5. BPS SUPPLIER PRE-QUALIFICATION......................................... 13
5.1. Pre-Qualification Criteria ............................................................. 14
5.1.1. Documents to be Enclosed in the Application Letter. ... 14
5.1.2. Prequalification Criteria for BPS Supplier .................... 15
5.2. Pre-qualification Results .............................................................. 16
5.3. Due Diligence for Suppliers ......................................................... 17
5.4. Dis-Qualification of Pre-Qualified Supplier..................................... 17
6. IDENTIFICATION OF PETOLEUM PRODUCTS REQUIREMENTS . 17
6.1. Supply and Demand Forecast ...................................................... 17
6.2. Monitoring and Controlling Stocks Levels ...................................... 19
6.3. Re-Order Levels .......................................................................... 20
7. TRANSIT ORDERS ....................................................................... 20
8. RECEIVING INFRASTRUCTURES ................................................ 21
9. VESSEL NOMINATION AND PRODUCT SPECIFICATIONS .......... 21
9.1. Vessel Nomination ...................................................................... 21
9.2. Product Specifications ................................................................. 22
10. PRE -BIDDING PROCESS ............................................................ 22
10.1. Pre -bidding Communication ........................................................ 22
10.2. Approvals of Placed Orders ......................................................... 22
11. TENDER COMMITTEE .................................................................. 23
11.1. BPS Tender Evaluation Committee ............................................... 23
12. BIDDING PROCEDURES UNDER BPS. ......................................... 24

1
 BPS MANUAL

12.1. Invitation to Bid .......................................................................... 24

12.2. Bid Documents ........................................................................... 24
12.3. Tender Opening and Evaluation ................................................... 25
12.4. Tender Award and Signing of the Shipping and Supply Contract .... 25
13. LEGAL RELATIONSHIPS UNDER THE BULK PROCUREMENT
SYSTEM. ............................................................................................ 26
13.1. Contract between the Agency and the OMCs; ............................... 26
13.2. Contract between the Agency and the Supplier; ........................... 27
14. FINANCING OF THE PETROLEUM PRODUCTS ............................ 27
15. EMERGENCY SITUATIONS AND PUBLIC INTEREST ................... 28
16. SHORTAGES CAUSED BY OPERATION ........................................ 28
17. SINGLE RECEIVING OPERATIONS ............................................. 28
18. DELIVERY PROCEDURES ............................................................ 28
18.1. Lodging of Cargo Manifest........................................................... 29
18.2. Pre-Arrival Checks ...................................................................... 29
18.2.1. Cargo Documentations ............................................ 29
18.2.2. Disport Operations upon Arrival of the Vessel ........... 30
18.3. Pre-Discharge Operations ............................................................ 30
18.3.1. Pre- discharge meetings. ......................................... 30
18.3.2. Sampling and Testing of the Product before Discharge
from Delivery Vessel............................................................. 31
18.3.3. Checking of Receiving Infrastructures ...................... 32
18.4. Discharge Operations .................................................................. 32
19. TRANSFER OPERATION FROM SRT TO OMCs OIL TERMINALS.. 34
19.1. Cargo Measurement .................................................................... 36
19.1.1. Methods ................................................................. 36
19.1.2. Units ...................................................................... 36
19.1.3. Quantities .............................................................. 37
19.2. Receiving Terminals Responsibilities when Receiving Petroleum
Products 38
19.3. Customs Clearance ..................................................................... 38
20. OUTTURN REPORTS.................................................................... 38
21. BANK GUARANTEE ...................................................................... 39
22. INVESTIGATION OF DISCHARGE OPERATIONS ........................ 39
23. INVOICING AND PAYMENT FOR THE PETROLEUM PRODUCT ... 40
23.1. Invoices (PFI and Final Invoice) to OMC ....................................... 40
23.2. Payment to Suppliers .................................................................. 41
24. DEMURRAGE ............................................................................... 41
24.1. Demurrage computation ............................................................. 42
24.1.1. Delay of Vessels by OMCs ....................................... 42
24.1.2. Delay of Vessel by the Supplier................................ 42
25. CONSULTATIVE PROCESSES ...................................................... 43
25.1. Aspects which Requires Board’s Involvement................................ 43
25.2. Operational Issues ...................................................................... 43

2
 BPS MANUAL

26. CORRESPONDENCES .................................................................. 43

26.1. Incoming Letters ........................................................................ 44
26.2. Outgoing Letters ......................................................................... 44
26.3. Email correspondences ............................................................... 44
27. CONFIDENTIALITY AND CONFLICT OF INTEREST ..................... 44
27.1. Confidentiality ............................................................................ 44
27.2. Conflict of interest ...................................................................... 44
28. HANDLING OPERATIONAL COMPLAINTS................................... 45
29. MONITORING AND EVALUATION ............................................... 45
30. REVISION AND AMENDMENT OF THE CONTRACTS ................... 46
31. PENALTY ..................................................................................... 46
32. DISPUTES SETTLEMENT AND GOVERNING LAW ........................ 46
33. REVIEW AND AMENDMENT OF THE MANUAL ............................ 47
34. APPENDIX 1 SPECIFICATIONS FOR THE PRODUCTS ................. 48
SPECIFICATIONS FOR THE PRODUCTS SHALL BE AS SHALL BE
PROVIDED BY TBS ............................................................................ 48
35. APPENDIX 2 SHIPPING AND SUPPLY CONTRACT FOR AGO ...... 49
FROM : ............................................................................................. 81
36. APPENDIX 3 SHIPPING AND SUPPLY CONTRACT FOR MOGAS . 85
FROM : ........................................................................................... 116
37. APPENDIX 4 SHIPPING AND SUPPLY CONTRACT FOR JET A1
AND KEROSENE ............................................................................... 120
FROM : ........................................................................................... 153
38. APPENDIX 5 IMPORTATION AGREEMENT BETWEEN THE AGENCY
AND OMC ......................................................................................... 156

3
GLOSSARY OF TERMS

“Agency” Petroleum Bulk Procurement Agency.

“Authority” Energy and Water Utilities Regulatory Authority

“Board” Ministerial Advisory Board which is the Board of Directors of

the Petroleum Bulk Procurement Agency.

“Bulk Procurement Petroleum Bulk Procurement System established to ensure

System (BPS)” supply of petroleum products at the most competitive prices,
by purchasing from a pool of imports obtained from suppliers
selected through an international competitive bidding
process to take the advantage of the economies of scale.

“Charter Party” A contract between the charterer and the ship owner where
the former hires from the latter for the use of the ship for a
certain length of time or for a certain voyage.

“CIF” A contract of sale whereby the seller bears all costs up to the
time of loading of the goods aboard ship and pays for the
freight and insurance of the goods for the voyage. Buyer
assumes responsibility when the goods are loaded on the
ship. He also bears customs duty, costs etc. at the port of
destination. Seller nominates the ship; and the term Cost
Insurance and Freight shall be construed accordingly.

“Delivered at Place” Delivered at Place means that the seller delivers when the
(DAP) goods are placed at the disposal of the buyer on the arriving
means of transport ready for unloading at the named place
of destination. The seller bears all risks involved in bringing
the goods to the named place.

“DAT” Delivery at Terminal. Seller bears cost, risk and responsibility

until goods are unloaded (delivered) at named terminal at
destination

“EOP” A point at which the vessel is considered to have ended the

sea voyage and commenced harbour steaming prior to
berthing; and the term End of Passage shall be construed
accordingly.

1
“EWURA” Energy and Water Utilities Regulatory Authority established
under the provisions of the Energy and Water Utilities
Regulatory Authority Act, Cap. 414; and the term the
Authority shall be construed accordingly.

“FOB” A contract of sale whereby the seller delivers the goods free
on board the ship nominated by the buyer and at the time
stated by the buyer. Seller bears all costs up to and including
the loading on the goods aboard the ship. The buyer then
assumes responsibility and bears the costs of freight,
insurance, landing charges etc. at the port of destination;
and the term Free on Board shall be construed accordingly.

“Gross Misconduct” An act or behaviour which endangers security of supply of

petroleum product in the country.

Marine Inspector PBPA employee assigned to perform marine operations

under the Bulk Procurement system

“Marine Surveyor” Shall mean Independent Marine

Inspection company, whose ownership is fully disclosed, and
is member of IFIA and other international organizations that
provide inspection, testing and certification of marine
services

“Minister” Minister responsible for petroleum affairs.

“OMC” An Oil Marketing Company licensed by EWURA to undertake

petroleum wholesale business.

“PBPA” Petroleum Bulk Procurement Agency established under

Executive Agencies Act Cap. 245 vested with mandates of
coordinating and managing efficient procurement of
petroleum products through Bulk Procurement System.
“Safe Port” A port which is safe for a particular ship to enter, lie, load
and discharge always afloat.

2
“SPM” Single Point of Mooring is an offshore terminal owned and
operated by the Tanzania Ports Authority that is used to
offload petroleum products. and the term (SBM) Single Bouy
Mooring shall be construed accordingly.

“SRT” Single Receiving Terminal is the central receiving facility of

all petroleum products from the delivery vessel for onward
transfer to the OMCs facility.

“SURVEYORS” An entity registered by EWURA to perform marine survey

services.

“TASAC” Tanzania Shipping Agencies Corporation established under

the provisions of Tanzania Shipping Agencies Act, 2017.

“TBS” The Tanzania Bureau of Standards established under the

provisions of the Standards Act, Cap. 130.

“TPA” The Tanzania Ports Authority established under the

provisions of the Ports Act.

“TRA” The Tanzania Revenue Authority established under the

provisions of the Tanzania Revenue Authority Act, Cap. 339.

“WMA” Weights and Measures Agency established under the

Executive Agencies Act No. 30 of 1997, and is the calibrating
authority.

3
1. INTRODUCTION

1.1. Preamble

This manual shall be referred as Petroleum Bulk Procurement System

Implementation Manual, 2020.

The Petroleum Act, Cap 392 requires that petroleum products supply to Tanzania
mainland is conducted through an efficient procurement system that shall be specified
by the Minister responsible for petroleum affairs.

The Minister has exercised powers conferred to him under the Act, and directed that,
petroleum products for the Tanzania Mainland market shall be procured through a Bulk
Procurement System (BPS).

The BPS Manual gives an outline of implementation of the Petroleum Bulk Procurement
System for Mainland Tanzania by providing the institutional framework and the
procedures for procurement and importation of petroleum products.

This manual has been developed by the Petroleum Bulk Procurement Agency, vetted by
the Authority and approved by the Minister responsible for petroleum affairs by virtue of
the Petroleum (Bulk Procurement) Regulation, 2017. This Manual has been developed
for effective operation of the Bulk Procurement System.

The Petroleum Bulk Procurement System Implementation Manual regulates all matters
related to invitation to bid, bid evaluation, bid qualification and award of the bid to supply
petroleum product in bulk and guide all operation matters related to procurement of
petroleum products under BPS, including pre-arrival checks, single receiving operations
which includes but not limited to pre-discharge operations, discharge operation, post
discharge outturn, customs and warehousing.

The types of petroleum products covered under the Bulk Procurement System are as
follows:
(a) Automotive Gas Oil (AGO);
(b) Unleaded Motor Spirit Premium (MSP);
(c) Jet A-1;
(d) Illuminating Kerosene (IK);
(e) Liquefied Petroleum Gas (LPG); and
(f) Heavy Furnace Oil (HFO).

4
The following documents are attached to this manual; specification for all products,
shipping and supply contracts between the Agency and the supplier and between Agency
and OMCs, Standard Operating Procedure. The referred documents might change from
time to time as need shall arise.

The tenders for delivery of all petroleum products except Liquefied Petroleum Gas (LPG)
and Heavy Furnace Oil (HFO) shall be on cargo by cargo basis or any other way as shall
be prescribed by the Authority and shall be called on intervals agreed by all stakeholders.
The mode of tendering may be changed whenever circumstances require. Tenders for
delivery of LPG and HFO shall be as advised by the Authority in consultation with the
Agency and other stakeholders.

1.2. Objective

The main objectives of this manual are;

a) to set guidelines for coordination of bulk importation of petroleum products
in which all players will be assured of security of supply at the most
competitive prices possible through international competitive bidding
process by taking advantage of economies of scale;
b) to ensure that the suppliers and buyers (OMCs) observe terms and
conditions of the contracts and laws Governing importation of petroleum
products in bulk;
c) to serve as a reference tool in making decisions involving the management
and operation of the Bulk Procurement System;
d) to establish guidelines to be followed by key stakeholders in the petroleum
industry;
e) to provide to key stakeholder’s information on Bulk Procurement System
policies and procedures with respect to all key activities under the Bulk
Procurement System; and
f) To create a level playing field to all stakeholders involved in the petroleum
product supply chain.

1.3. Functions of PBPA under BPS

The following are the activities of the Agency under Bulk Procurement System;
i. Register OMCs; Registration of OMCs shall be done based on the validity
of the Petroleum Wholesale License issued by EWURA. Upon expiring of
wholesale license issued by EWURA the OMC shall be required to renew
its registration with the Agency as the registration automatically ends with
the expiring of the wholesale license;

5
 ii. Prequalify suppliers of Petroleum product; prequalification of suppliers
shall be obtained by making application to the Agency as stipulated in this
manual;
iii. Conduct diligent forecasts of petroleum products requirements by
collecting requirements for importation of petroleum products from OMCs
and reconcile petroleum products forecasts with requirements submitted
by OMCs and engage OMCs to adjust their orders where requirements
submitted are less than the forecasts;
iv. Consolidate the petroleum importation requirements and establish delivery
schedules;
v. Prepare petroleum supply tender documents, float tender, open tender,
evaluate the same and award to the lowest responsive bidder;
vi. Receive Supplier’s performance bond, list of conforming banks and list of
terminals where the product on financial hold will be discharged from the
supplier who has been awarded the tender;
vii. Enter into a contract (shipping and supply contract) with supplier who won
the tender;
viii. Enter into a contract with OMCs;
ix. Manage performance of all contract entered under the Bulk Procurement
system;
x. Prepare contractual performance reports and take appropriate actions
upon non-performing suppliers or service providers. Identify any
inefficiency which adversely impacts the anticipated benefits of BPS
implementation and eliminate all which falls under the mandate of the
Agency and escalate to relevant authority’s matters which fall outside the
Agency mandate; and
xi. Prepare and submit monthly, quarterly, annual BPS operations
performance reports to the Ministry responsible for petroleum affairs and
to the Authority.

6
1.4 System Outline (Framework).

Pre-qualification of suppliers,
this is to be done in, August
Registration of OMCs, and thereafter the window will
which is to be done be open till July of the following
throughout the year (the year. The validity of pre-
validity of OMCs qualified supplier is from 1st
registration depends with January to 31st December of
the validity of the the year of supply)
wholesale license issued

Consolidating Preparing tender

Collecting requirements and documents and
requirement doing vessel floating tenders
s from configuration
OMCs

Supplier submission of
Tender opening and performance bond, list of Signing of the
award of tender to the conforming banks and shipping and
lowest responsive bidder list of terminals where supply
the products of financial contract
hold will be discharged

Preparation of
Performance of the contractual
shipping and supply performance reports
contract

7
2. LEGAL FRAMEWORK

The legal framework relevant for the Petroleum Bulk Procurement System is derived
from, among others the National Energy Policy of 2015 and, the following legal
instruments:
(a) The Petroleum Act, CAP. 392; GN No. 21 of 2015
(b) The Petroleum (General) Regulations, 2013;
(c) The Petroleum (Bulk Procurement), Regulations 2017 GN No. 198 of 2017;
(d) The Environment Management Act, CAP. 119 of 2004
(e) The Energy and Water Utilities Regulatory Authority Act, CAP. 414;
(f) Weights and Measures Act, CAP.340 (R.E.2002);
(g) Standard’s Act, Act No. 2 of 2009;
(h) Customs Laws;
(i) International Commercial Terms (Incoterms)are key instruments to the
implementation to BPS;
(j) The National Energy Policy of 2015;
(k) Petroleum products specifications; and
(l) Any other relevant laws.

3. INSTITUTIONAL FRAMEWORK

The Petroleum Bulk Procurement System shall be overseen by the undermentioned

institutions which have a role to play in the system;

3.1. Energy and Water Utilities Regulatory Authority (EWURA)

The Energy and Water Utilities Regulatory Authority (EWURA) is a regulatory authority
established by the Energy and Water Utilities Regulatory Authority Act, CAP. 414 of the
laws of Tanzania. As the regulator in the downstream petroleum sub-sector, EWURA is
responsible for overseeing all matters related to the supply of petroleum products in the
country in accordance with the provision of the Petroleum Act of 2015.

3.2. Petroleum Bulk Procurement Agency (PBPA)

Petroleum Bulk Procurement Agency is an Executive Agency established under the

Executive Agencies Act CAP.245 vested with mandate of coordinating and managing
8
efficient procurement of petroleum products through Bulk Procurement System. This
mandate emanates from the Petroleum Act, CAP. 392 and is operationalised by the
Petroleum (Bulk Procurement) Regulations, 2017 (GN No. 198).

3.3. Weights and Measure Agency (WMA)

(a) The Weights and Measures Agency is an Executive Agency, established under the
Executive Agencies Act, CAP. 245, responsible for fair trade transactions through
certification of weights and measures. The responsibilities of WMA are stipulated
in the Weights and Measures Act, CAP. 340.

(b) WMA is fully involved in determining the arrival quantity of petroleum products
and the quantity of products discharged from delivery vessels and received in the
respective nominated receiving terminals. Under the Bulk Procurement System,
WMA is considered the final authority in dispute related to difference on
measurement of arrival quantity and quantity discharged and received into shore
tanks.

3.4. Tanzania Bureau of Standards (TBS)

(a) Tanzania Bureau of Standards (TBS) is mandated to oversee and set standards of
imported and local made commodities. Pursuant to Section 4(1) of the Standards
Act No. 2 of 2009, TBS has the following functions which are directly related to
the Bulk Procurement System;

i. To prepare, frame, modify or amend National Standards;

ii. To undertake measures for quality control of commodities, services and
environment of all descriptions and to promote standardization in
industry and trade; and
iii. To provide for the inspection, sampling and testing of locally
manufactured and imported commodities with a view to determining
whether the commodities comply with the provisions of the Standards
Act or any other law dealing with standards relevant to those
commodities.

(b) TBS is the final authority in determining the quality of imported petroleum product.
Vessels bringing petroleum products are allowed to discharge the product only
after receiving an approval from TBS that the product meets approved standards
and specifications.

9
3.5. Tanzania Revenue Authority (TRA)

(a) Tanzania Revenue Authority (TRA) was established by the Tanzania Revenue
Authority Act, CAP 399, as the central body for the assessment and collection of
revenues which include taxes, duties, fees, fines and other monies imposed by or
collected under various laws or provisions of laws set out in the First Schedule of
TRA Act, CAP 399.

(b) TRA is responsible for collecting all taxes associated with importation of petroleum
products through BPS.

(c) Under BPS, any change of cargo ownership (cargo manifest) and localization of
petroleum products imported for transit use must be approved by TRA.

3.6. Tanzania Shipping Agencies Corporation

Tanzania Shipping Agencies Corporation (TASAC) was established under the provisions
of Tanzania Shipping Agencies Act, 2017. TASAC has exclusive mandate on clearance
of petroleum products and managing all shipping operations as the sole Shipping Agent
for petroleum products vessel.

3.7. Tanzania Ports Authority (TPA)

(a) The Tanzania Ports Authority (TPA) is established by the Ports Act No. 17 of 2004
as landlord port authority. It operates a system of ports serving the Tanzania
hinterland and the landlocked countries of Malawi, Zambia, Democratic Republic
of Congo (DRC), Burundi, Rwanda and Uganda.

(b) The principal objectives of TPA which relates to the bulk procurement system are;

i. To establish and coordinate system of harbours; and

ii. To provide facilities relating to harbours and provide harbour services.

(c) Moreover, under BPS, suppliers are supposed to send particulars intertanker or
standard tanker chartering questionnaire 88 (Q 88) of the nominated vessels to
TPA for approval before loading the vessel with petroleum products.

10
3.8. BPS Prequalified Supplier

BPS prequalified suppliers are both international and local entities entitled to participate
in tenders for the supply of petroleum products. Tenders for the supply of petroleum
products under the Bulk Procurement System are floated to the pre-qualified suppliers
only, participation in tenders is not open to the general public.

3.9. Oil Marketing Companies (OMCs)

OMCs are the locally registered companies eligible to place requirements of petroleum
products through Bulk Procurement System. The requirements may be for local use or
transit. The eligibility of an OMC to participate in the BPS is to have a valid Petroleum
Wholesale License issued by the Authority. Financing of petroleum products under BPS
is done by the OMCs for local products and consignee for the transit product.

3.10. Single Receiving Terminal Operator

Single Receiving Terminal Operator is the operator of the single receiving terminal which
is the onshore tank farm owned or contracted by Government to receive petroleum
products from the delivery vessel.

4. REGISTRATION AND DEREGISTRATION OF OMCs

Registration and deregistration of OMCs shall be done in the manner provided below;

4.1. Registration of OMCs

(a) Regulation 6(1) of the Petroleum (Bulk Procurement) Regulations, 2017 G.N. No.
198 of 2017 requires OMCs to register with the Agency in order to be eligible to
import petroleum product. The Agency has been mandated to prepare procedures
for registration of OMCs intending to import petroleum products under BPS. Below
is the procedure and requirement for registrations: -

1) The following documents must be submitted by an OMC when making an

application to be registered by the Agency;
a. Application letter;
11
 b. A certified true copy of the following;
i. Certificate of Incorporation;
ii. Petroleum Wholesale license issued by EWURA;
iii. Business Trading License;
iv. TRA Importation License;
v. TIN Certificate;
vi. VAT Certificate;
vii. Memorandum and Article of Association;
viii. Hospitality agreement(s) or proof of own storage facility;
c. Specimen signature of at least two representatives;
d. List of staff responsible in handling all operations related to receiving
of petroleum products;
e. Three months’ importation projections volume;
f. Letter from BRELA showing the current status of the company
including;
i. Name of Shareholders (number of shares should be stated);
ii. Name of Directors;
iii. The last time the company filed returns;
g. Comfort letter from OMC’s banker stating the OMCs financial
position;
h. Tax clearance certificate;
i. Source of financing proved by letter from financier committing to
finance the OMC;

2) An OMC applying to be registered by the Agency shall be required to pay

registration fees of Tshs. 5,000,000/= (Five million shillings only) or as shall
be approved by the Minister responsible for Petroleum affairs.

3) An OMC who will be aggrieved by the decision of PBPA may appeal to the
Minister Responsible for petroleum affairs.

4.2. Deregistering of OMCs

(a) OMCs registered with the Agency shall be deregistered and shall not be allowed
to participate in tenders upon occurrence of either of the undermentioned
incidences: -

i. Upon expiration of OMCs petroleum wholesale license issued by EWURA;

ii. Revocation of OMCs petroleum wholesale license issued by EWURA;
iii. An OMC wishing to re-register with the Agency shall be required to pay
Registration fee and submit all documents listed in items 4 (a) and (b)
above;
12
 iv. An OMC who will be aggrieved by the decision of PBPA may appeal to the
Minister Responsible for petroleum affairs.

5. BPS SUPPLIER PRE-QUALIFICATION

(a) Application for pre-qualification shall be advertised and companies meeting the
requirements shall be pre-qualified and be invited to bid for supply of petroleum
products under the Bulk Procurement System.

(b) Advertisement for invitation for pre-qualification shall be done through;

i. Local and international newspapers;

ii. Emails to past years prequalified suppliers;
iii. Emails to OMCs;
iv.Emails to international forums and institutions dealing with petroleum
business; and
v.Emails to individual companies which showed interest to participate in BPS
tenders;
vi. PBPA website;
vii. Tanzanian Embassies.

(c) The prequalification criteria for a bidding entity shall be provided in the bidding
document for application for pre-qualification.

(d) Prequalification of suppliers shall be done in August after expiration of previous

prequalification and thereafter pre-qualification will proceed as and when the
applications will be received.

(e) August prequalification shall be conducted as provided below;

i) Advertisement for prequalification shall be issued between 5th and 10th

August of the year of prequalification;
ii) The deadline for BPS Supplier submission of the documents as
communicated by the Agency shall be at least twenty-one (21) days
and not more than thirty (30) days from the date of the first
advertisement in the local newspapers;
iii) Evaluation of submitted documents shall be done within ten (10) days
from deadline for submission of prequalification documents followed by
due diligence as and when required;
iv) Due diligence for new applicants is a must and shall be repeated after
every three (3) years; Where due diligence for new applicants is not
completed, they will be issued with provisional prequalification;
13
 v) Letters of award to the prequalified suppliers shall be issued on or
before 15th November of each year;
vi) Prequalified supplier will be eligible to participate in tenders for the
supply of petroleum products from January to December the following
year;
vii) Prequalified supplier will be eligible to participate in tenders for the
supply of petroleum product for three (3) years from the date of being
pre-qualified subject to payment of validation fees of USD 1000 payable
on second and third year;
viii) During payment of validation fee under paragraph 5(e) (vii) above the
applicant shall notify the Agency of any changes in office location,
shareholding structure, joint venture arrangement, and source of
financing etc;
ix) Applicant for prequalification who will be aggrieved by the decision of
PBPA may appeal to the Minister Responsible for petroleum affairs.

5.1. Pre-Qualification Criteria

(a) The prequalification criteria for a bidding entity will include the following minimum
requirement.

(b) The application for pre-qualification shall be by way of a letter addressed to

Executive Director of the Agency.

5.1.1. Documents to be Enclosed in the Application Letter.

(a) The application letter should include the undermentioned documents:

1) statement in precise terms explaining applicant’s commitment to;

a. Provide credit of not less than sixty (60) calendar days to purchasers
from the first day of delivery date range;
b. Undertake to comply with TBS standards in regards to the specifications
of the products;
c. Undertake to deliver the cargoes in vessels that have been approved by
TPA; and
d. Perform the contract in line with the terms and conditions stipulated in
the Shipping and supply contract and the governing laws of Tanzania.

14
 2) A warrant that there is no actual or threatened litigation that may affect its
liability to comply with the performance of the contract under the Bulk
Procurement System.
3) Assurance that the company is not insolvent, declared bankrupt by a
competent court or be the subject of any winding up process.
4) valid tax clearance certificate issued by competent authority or as the case
shall be a letter from competent Authority that the company has been
exempted from paying tax or is operating in a tax free zone.
5) A statement explaining the modality of handling the responsibilities under the
shipping and supply contract i.e. office where all operations will be performed.
If some of the company obligations will be performed by an offshore office or
Affiliate Company, the applicant must provide the address and the nature of
activities which will be performed by those offices.
6) For companies wishing to form a joint venture, a joint venture agreement
registered in Tanzania. The joint venture agreement should state:
i. Management of the joint venture operations;
ii. Rights and responsibilities of parties to the Joint venture agreement;
iii. Profit and loss sharing;
iv. Financial contribution to the joint venture; and
v. Technical support to the joint venture.
7) Details on source of financing of the obligation under the shipping and supply
contract in the event they win the contracts.
8) Company profile containing, among other information, staff competency on
international trading of petroleum.

5.1.2. Prequalification Criteria for BPS Supplier

(a) The prequalification criterial for suppliers of petroleum products shall be as

provided below;

1) That the application contains all the information required under paragraph
5.1.1.a (1-8) above;
2) The applicant must be a registered legal entity structured for the petroleum
supply and trading business, proof of which will be sought from certified
copies of the company’s certificate of registration, memorandum/articles of
association, tax payer’s registration certificates and business license;
3) International companies must have a gross trading turnover of at least US$
100,000,000 per year and for local companies must have capitalization or
asset base of at least thirty billion (30,000,000,000) Tanzania Shillings,

15
 both shall be evidenced by a certified Audited Financial Statements for the
past three consecutive years;
4) Proof of payment of pre-qualification processing fees of USD 5,000 for
multinational companies and TZS 5,000,000/= for local companies. The fee
is payable after every three (3) years from the date of pre-qualification;
5) The applicant must have a minimum experience of three (3) years in
international trading of petroleum products with a minimum trading volume
of 1,500,000MT for international companies. Local companies must have a
minimum of five (5) years’ experience in local marketing business of
petroleum products. The aforementioned experience must be proved by
any of the two items listed below;
(i) Letters from customers or supplier/refineries indicating annual
volumes traded;
(ii) Certified copies of Bill Lading;
(iii) Certified copies of contract.

6) For local applicants they must not have defaulted to make payment as
buyers of refined petroleum products for the period of twelve (12)
consecutive months prior to invitation for pre-qualification;
7) Past performance of the contracts with the Agency. In ascertaining the past
performance, regard shall be made to the following;
i. The Agency records on the supplier’s performance in the
previous tenders;
ii. Minutes of the stakeholder’s meetings; and
iii. Correspondence from other parties in relation to the
supplier’s performance of the contract.

5.2. Pre-qualification Results

(a) Notice and validity of prequalification results shall be in the manner provided
below;
1) List of pre-qualified suppliers will be released to all applicants and all
stakeholders in petroleum industry in Tanzania and will be maintained in the
Agency register;
2) The list of prequalified suppliers will be valid for three (3) years from the date
of being prequalified up to the 31st December of year of supply; however, the
list will be updated annually based on payment of validation fee;
3) Upon consultation with Ministry responsible for petroleum affairs and EWURA
the Agency might extend the validity of the prequalification of suppliers.

16
5.3. Due Diligence for Suppliers

(a) The Agency shall conduct a background check/due diligence of all prequalified
suppliers as elaborated above under 5.1.

(b) A pre-qualified supplier who is subsequently proven to be unqualified shall be

removed from the register.

5.4. Dis-Qualification of Pre-Qualified Supplier

a) The Agency may disqualify a supplier who has been prequalified if it satisfies itself
that such supplier has submitted false information that materially influence or
intended to influence the Agency’s decision;

b) Prequalified supplier who will be aggrieved by the decision of PBPA shall appeal
to the Minister Responsible for petroleum affairs.

6. IDENTIFICATION OF PETOLEUM PRODUCTS REQUIREMENTS

(a) Petroleum products procurement involves a series of operations whose sequence

is critical for the proper functioning of the chain. A well planned Bulk Procurement
System for petroleum products will enable cost effective access to petroleum
products by improved procurement. Identification of requirements involves the
under mentioned activities;

1) Supply and Demand Forecast;

2) Monitoring and controlling stocks levels and taking proactive actions to
remedy any foreseen shortages and overstocking;
3) Maximizing and protecting economies of scale of BPS imports including
monitoring of re-order levels.

6.1. Supply and Demand Forecast

Supply and demand forecast shall be managed as provided below;

(a) Annual tendering calendar shall be established by the Agency and approved
by the Board. The Annual Tender Calendar shall be shared to all stakeholders
in the petroleum industry including prequalified suppliers;

17
(b) On monthly basis the Agency shall consolidate monthly tender quantities and
float tenders based on the monthly quantities submitted by OMCs. In arriving
at the adequate importation requirement the Agency shall;
i. Simulate petroleum stocks for each OMC and establish days covered
based on respective market share as provided by EWURA;
ii. If the submitted requirements are not sufficient for specified period,
the Agency shall write to all OMCs whose stocks are below buffer
stock of 15 days pursuant to Regulations 6 of Petroleum General
Regulations; requiring them to take necessary remedial measures.

(c) Planning supply and forecasting of annual demands and importation and
collections of monthly requirements shall be in the manner provided below;

i. The Agency shall establish six months’ importation and tendering

schedule which will comprise;
a. Commencement date for OMCs to submit requirements;
b. Deadline for submission of requirements;
c. Delivery date range for each of the discharge point;
d. Dates for OMCs to submit nominations;
e. Date for establishment of delivery schedule;
f. Date to issue Bidding Document; and
g. Date to open the tender.

ii. For the purpose of making proper planning and scheduling of

petroleum products imports;

a. All OMCs shall submit to the PBPA six months’ petroleum

products projections for each product type with clear
assumption of driving factors used;
b. OMCs shall submit to the Agency such forecast requirements
by the end of November of the year preceding the year of
importation and May of the year of importation;
c. The Agency shall in consultation with TRA and EWURA review
importation and sales history data for each individual OMC to
identify patterns and trends and produce six months rolling
importation forecast on monthly basis.

iii. Each OMC shall at the beginning (within 10 days) of the month (M)
submit to the Agency monthly petroleum products imports
requirements for both local market and transit (optional) for delivery
month (M+2);

18
 a. Monthly nominations shall be checked if they are covered by
bank guarantee;
b. Acceptance of nominations is subject to availability of valid
and sufficient bank guarantee; clearance of obligations on
previous cargos including but not limited to financial
obligations; and
c. Acceptance of transit orders must be accompanied by credible
evidence of orders/confirmation from the respective
consignees in the destination or ordering countries. The same
should be accompanied by contacts (e-mail address and
telephone number) with proper physical and postal addresses
which PBPA can use to contact the consignee when required;

iv. The Agency shall issue compliance order to all OMCs who submitted
monthly requirements on (c) above, which are below their
established local demand.

(d) The Agency shall approve six months’ procurement plans before they are
implemented.

6.2. Monitoring and Controlling Stocks Levels

In monitoring and controlling stock level the Agency shall take proactive actions to
remedy any foreseen shortages and overstocking by doing the following: -

(a) All OMCs are required by the Petroleum Act, Cap. 392 to maintain
minimum operational stocks;

(b) The level of minimum operational stocks shall be as prescribed by the

Minister in the Petroleum (General) Regulations, 2011 GN No. 163 of
2011 or as shall be amended from time to time;

(c) The Agency shall, on monthly basis analyse adequacy of petroleum

stock in-tank and on shipment for local consumption based on
established average consumption, simulating projected latest coverage
date enough to suffice country consumption for at least two months
ahead. The analysis shall take into account minimum operational stock
level as shall be prescribed in the Petroleum (General) Regulations,
2011 GN No. 163 of 2011.

19
6.3. Re-Order Levels

Re- order levels shall be managed as provided below;

a) On quarterly basis the Agency in collaboration with the OMCs shall
review the annual forecasts and determine re-order level, the optimal
parcel sizes, lead time and the frequency of shipment;

b) The Agency shall, every week, collect and review petroleum products
stocks levels in order to monitor shifts in demand and in case of
abnormal off-takes and stocks falling below the re-order level, PBPA shall
trigger for the appropriate action to be taken.

7. TRANSIT ORDERS
The use of Bulk Procurement System for transit products shall be optional. Moreover,
financing of the transit cargoes shall be done by the consignee of the transit cargoes or
any other company which is not locally registered. OMCs intending to place
orders/requirements for transit shall be required to submit the following: -

a) Details of the consignee of the transit parcel comprising of name, e-mail

address, and telephone number and address (physical and postal);

b) Agreement with the consignee of the transit cargo or any other document
instructing the OMCs to place order on behalf of the consignee of the transit
cargo;

c) Evidence that at least 80% of the quantity imported through transit in the
month (M-2) was evacuated to destination countries; and

d) Evidence that taxes for the localized transit products have been paid and the
consignees/financiers have been refunded their money for the localized
product.

e) As the case may be OMCs placing transit orders may be required to submit
registration documents and provide shareholding details of the consignee of
transit cargoes.

20
8. RECEIVING INFRASTRUCTURES

a) All owners of storage facilities shall submit to the Agency available storage
capacities in their terminals and expansion plan on annual basis.

b) Only storage facilities approved by EWURA shall be allowed to receive products

from petroleum importing vessels.

c) All terminals should have valid calibration charts for all receiving tanks. Failure
to comply, a storage tank will not be allowed to receive petroleum products
from the vessel until the Agency receive certification from WMA

9. VESSEL NOMINATION AND PRODUCT SPECIFICATIONS

Vessel nomination and product specification shall be managed as elucidated below;

9.1. Vessel Nomination

Nomination of vessels to supply petroleum products under the bulk procurement system
shall be managed as provided below;

a) The Supplier shall nominate performing vessel at least 15 calendar days prior to
the first day of delivery date range by providing Q88 of the vessel;

b) The vessel carrying petroleum product calling Tanzania port shall be vetted and
cleared by TPA and the Agency within 24 hours after receipt of Q88 of the
nominated vessel;

c) The Agency shall advice TPA on vessel performance during vessel nomination.
Vessels which have been proved to have poor performances in terms of discharge
rates and losses in their previous voyage in Tanzania will not be allowed to carry
petroleum products under the BPS.

21
9.2. Product Specifications

a) Products specifications shall be as per TBS specifications.

b) All petroleum products imported into Tanzania shall meet the approved product
specifications.

c) Petroleum products which do not meet the approved specifications shall not be
allowed to discharge in Tanzania.

10. PRE -BIDDING PROCESS

The pre-bidding process for importation of petroleum products shall include the
following;

10.1. Pre -bidding Communication

(a) All importation order from OMCs to the Agency (advising requirement of import
parcels) shall be done in writing by using standard forms which shall be provided
by the Agency;

(b) The Agency shall acknowledge receipt of the importation order within 24 hours
and shall evaluate the same and communicate to the OMCs whether the order
has been accepted or not;

(c) In case of any complaints in regards to order placed from OMC to the Agency
the same shall be in writing and the Agency shall be required to acknowledge
receipt of the communication within 48 hours. The lodged complaint(s) shall be
dealt upon with within the time limits provided in legal instruments and other
working documents;

d) Communication by phone followed by e-mail is acceptable provided that signed

copies are delivered within 24 hours thereafter.

10.2. Approvals of Placed Orders

Acceptance of OMCs order shall base on the undermentioned criterial;

22
 a) All OMCs placing order to the Agency shall instruct their bankers to remit 5%
bank/cash guarantee in favour of the Agency on or prior to the date of submission
of order. Any OMC failing to do so shall have its order removed from the tender
volume;

b) Acceptance of OMCs order placed with the Agency is subject to clearance of;

i. Payment of fees payable to the Agency and other Government

institution e.g. TBS, TASAC, WMA, TPA and any other relevant
government institution;

ii. Financial obligations of previous cargoes as per terms and conditions

of the Shipping and Supply Contract.

c) All order for import raised by an OMC shall be considered and acted on;

d) If the aggregate parcels subscribed do not constitute an appropriate cargo sized

as planned the Agency upon consultation with EWURA and the supplier(s) shall
consider the possibility of asking the supplier to add additional cargoes in the won
tender(s).

11. TENDER COMMITTEE

Evaluation of the tenders under the Bulk Procurement System shall be done by the under
mentioned committee.

11.1. BPS Tender Evaluation Committee

(a) The BPS Tender evaluation committee for the supply of petroleum product shall be
comprised of a Chairman and other five members who shall be comprised of two
(2) staff from the Agency and three (3) members from OMCs as may be appointed
by the Agency Executive Director and approved by the Board;

(b) The tenure of the chairman and members shall be three (3) years. Members can
be reappointed for one more term;

(c) Pre-qualified suppliers or their affiliates shall not be eligible to be appointed as

members of the evaluation tender committee.

23
12. BIDDING PROCEDURES UNDER BPS.

a) The bidding will be conducted under an International Competitive Bidding process,

whereby the Agency will facilitate the process. The bidding procedure shall be
comprised of the below key activities;

i. Invitation to bid;
ii. Submission of bidding documents on the tender opening day;
iii. Tender opening and evaluation; and
iv. Award of the tender to the lowest responsive bidder.
v. Clearance form of previous tenders.

12.1. Invitation to Bid

a) An invitation to bid for tender to supply petroleum products will be sent to all pre
– qualified suppliers not less than ten days (10) to the tender opening date.

b) The Agency shall release notifications of tender quantities and delivery schedules
as shall be prescribed in the annual importation calendar;

c) The invitation shall contain tender quantities and delivery schedules;

d) In the event unexpected offtakes and/or seasonal variations trigger necessity for
change on BPS tender quantity the changes shall be processed not less than two
working days before tender opening. An addendum to change the Bidding
Document shall be prepared and appropriately communicated to all bidders.

12.2. Bid Documents

All bids submitted shall be accompanied by the following;

a) Bid security of value indicated in the bid data sheet which can either be in the
form of a bank guarantee issued by a reputable bank in the form provided in the
bid documents valid for 15 calendar days from the date of tender opening;

b) Registered Power of attorney;

c) Dully filled Price, quantity and delivery schedule.

24
12.3. Tender Opening and Evaluation

a) All submitted bids will be opened and evaluated the same day in public and all
bidders will be invited to witness the opening.

b) Bidders’ price quotes will be projected or displayed for everyone to see it in public.

c) Bidder’s price quotes, will be circulated to attendees for their verification if what
has been projected or displayed is actually what has been quoted by the bidders.

d) Bids will be evaluated against pre-agreed criteria as specified in the bid documents
and awarded to the lowest responsive evaluated bidder.

e) Quarries on the evaluation processes shall be raised and resolved during tender
evaluation process. If bidders are not satisfied with the manner in which the
tender committee has resolved the dispute they shall refer the matter to the
Executive director.

f) The executive director shall resolve the matter within 24 hours. The decision of
the executive director shall be final and binding.

12.4. Tender Award and Signing of the Shipping and Supply Contract

a) The lowest responsive bidder will be awarded the tender on the same day of the
announcement of the tender results.

b) In the event there is more than one (1) lowest responsive bids with equal quoted
price, the lowest bidders will be required to submit fresh lower price bids on the
following day before 11:00 hours.

c) The successful bidder shall be given notice of award of contract and shall be
required to make all arrangements for the delivery of the import(s).

d) Within nine (9) calendar days after of receipt of the notice of Award, the successful
bidder shall furnish to the Agency performance security bond of value stated in
the bid data sheet in the form of a bank guarantee as per bid document, after
which the Shipping and Supply Contract will be signed.

e) In the event the winner fails to submit performance bond or performance of the
contract the second ranked will be awarded the contract if the difference in
25
 premiums with the lowest responsive bidder will not exceed ten percent (10%) of
the premium quoted by the lowest responsive bidder. If the second lowest will
not meet the conditions or accept the award, the 3rd lowest bidder will be
considered for the award. The process will go on until the suitable bidder is
obtained.

f) If the difference between the 1st lowest evaluated bidder and the bidder to be
considered for the award exceeds 10% as explained in paragraph (e) above a
fresh tender shall be floated.

g) Notwithstanding penalties provided under Petroleum Bulk Procurement

Regulations bidder who failed to submit the performance bond shall be disqualified
and its bid security bond cashed.

13. LEGAL RELATIONSHIPS UNDER THE BULK PROCUREMENT SYSTEM.

Smooth implementation of importation of petroleum products under the Bulk

Procurement System depends much on the legal relationship between the Agency and
the supplier, the Agency and the OMCs and the OMCs and the supplier also relationship
between Supplier, Agency, OMC and Single Receiving Terminal Operator where
applicable is very crucial in management of Bulk Procurement System. The legal
relationship shall be created in the following manner.

13.1. Contract between the Agency and the OMCs;

a) The Agency shall sign Importation contracts with OMCs which replicate the Shipping
and Supply Contract to be signed between the Agency and the Supplier.
b) The contract between the Agency and OMCs, gives the Agency the mandate to act
on behalf of OMCs in matters related to importation of petroleum products under Bulk
Procurement System. Also it serves as a commitment from OMCs that they are bound
by the terms and conditions of the shipping and supply contract between the Agency
and the Supplier.
c) The Importation contract between the Agency and OMCs is among the documents
forming part of the shipping and supply contract between the Agency and the
Supplier.

26
13.2. Contract between the Agency and the Supplier;

The Agency shall enter in to the contract with the supplier on behalf of the OMCs. The
contract between the Agency and the supplier;

a) Guarantees that the OMCs will perform the obligations stipulated in the shipping
and supply contract;

b) Recognizes the OMCs responsibility of financing the petroleum products imported

under the Bulk Procurement System;

c) Recognizes the Agency role of coordinating importation of petroleum products

through the Bulk Procurement System.

14. FINANCING OF THE PETROLEUM PRODUCTS

a) Individual OMCs shall separately be responsible for arranging own financing of the
petroleum products purchased jointly through the bulk procurement system.

b) OMCs shall open a letter of credit to the supplier’s banker or facilitate pre-payment
in respect of the local cargo imported through Bulk Procurement System.

c) For transit cargos the OMCs shall ensure the consignees have opened letter of
credits to the supplier’s banker or facilitate pre-payment in respect of their
imported cargos. OMCs are not allowed to open LC for transit cargoes.

d) Failure for OMC to fulfil contractual financial obligation as per provisions of

Shipping and Supply Contract as well as Importation Contract between OMC (the
Purchaser) and the Agency shall be dealt with as per terms and conditions of the
shipping and supply contract and the Regulations in place.

e) OMC shall be liable for all default made by the consignee of transit consignment.
OMC liability shall be based on the principle agent relationship.

27
15. EMERGENCY SITUATIONS AND PUBLIC INTEREST

a) During emergency situations the procurement of Petroleum Products shall be as

directed by the Minister responsible for petroleum affairs when exercising powers
conferred to him/her by the Regulations governing bulk procurement of petroleum
products.

b) In the public interest the Minister may issue in writing directives of specific or
general nature to the Agency.

16. SHORTAGES CAUSED BY OPERATION

If there is need for additional requirements because of the shortage of petroleum

products in the country which has been caused by contamination, demand change and
force majeure events the Agency, with prior approval from the Authority, shall a float an
emergency tender. Floating of emergency tender shall be in the manner provided below:

a) Depending on the prevailing situation the Agency may;

i. Float and open an emergency tender within a very shorter period as opposed
to the normal tender.
ii. Waive the bidding conditions which cannot be met within a short period.

17. SINGLE RECEIVING OPERATIONS

For Single Receiving Operations, all petroleum products procured through the Bulk
Procurement System shall be discharged into single receiving terminal (SRT) and
thereafter distributed to the OMCS nominated terminals.

18. DELIVERY PROCEDURES

Delivery procedures shall be as guided by the Standard Operating Procedures but not
limited to the following.

28
18.1. Lodging of Cargo Manifest

The Supplier shall ensure vessel’s manifest is lodged to TASAC with endorsed copy of bill
of lading and proforma invoices for customs purpose) at least five (5) calendar days
before the Notice of Readiness (NOR) date.

18.2. Pre-Arrival Checks

The Agency shall arrange pre-arrival checks for the cargo which will comprise of the
following.

18.2.1. Cargo Documentations

a) Tanks clearance certificate issued after the last voyage/ before the vessel is
loaded with petroleum products.

b) Inspection of load-port certificates of quality to confirm product loaded is per

TBS specifications. If loading is by Ship-to-Ship (STS) operation, then a
Certificate of Quality of the berthing (daughter) vessel supplying product as
well as mother vessel must be provided to the Agency. Any deviations in this
respect shall be reported to the Agency and EWURA and shall result in Agency
rejecting the cargo and supplier obliged to replace the cargo.

c) For Jet A-1 all certificates of quality issued in the chain of supply from the
refinery to the delivery vessel, including refinery quality certificate (RQC) that
is produced at the point of manufacture and or acceptable certificate of
quality (COQ) that come out from the downstream of refinery in the
intermediated supply terminal or if the cargo has been shipped from another
terminal. The two documents shall cover the batch showing the fuel grade
and confirm that they meet all applicable and relevant specifications or the
latest JIG Aviation Fuel Quality Requirements for Jointly Operated System
(AFQRJOS) checklist;

i) Copy of the latest recertification test certificate for JET A1, where
applicable (for non-dedicated vessel, a multiple tank composite sample
should be prepared for recertification test to confirm the condition of the
product on board of the vessel). Release certificate(s), inventory of
samples, inspectors report from the load port including previous cargo and
cleaning procedure and loading plan (if available).

29
 ii) Copy of certificate of origin for Jet A-1 all certificates shall be issued in the
chain of supply from refinery to the delivery vessel.
iii) Copy of cargo manifest and valid calibration certificates for ullage
temperature interface (UTI), ship-tanks and vessel shall be issued.
iv) Availability of Bills of Lading. If no Bill of Lading has been delivered, The
Supplier shall be obliged to issue a valid worded Letter of Indemnity.

18.2.2. Disport Operations upon Arrival of the Vessel

a) Confirmation of receiving facilities, the Agency shall communicate to receiving

facilities (OMCs terminal) or with single receiving terminal operator in order to
ensure that all shore tanks and receiving lines are prepared to receive the products
and that the berth facilities (in consultation with TPA) have been evacuated in
preparation for the arrival of the vessel.

b) Receiving facilities shall not be allowed to receive products in empty tanks.

c) The Agency shall also request vessels particulars and confirm arrival dates.

d) The Agency shall ensure that it has deployed qualified marine inspectors to
manage discharge operations.

e) Each vessel shall carry three load port sample for each vessel compartment the
sample shall be retained by the Agency, Supplier or Single Receiving Terminal
operator where applicable.

18.3. Pre-Discharge Operations

Pre discharge operations will be in the manner prescribed below.

18.3.1. Pre- discharge meetings.

a) The Agency’s marine Inspector shall conduct and chair Vessel Pre-Discharge
Meeting attended by OMCs representative, supplier surveyor and Single
Receiving Operator representative where applicable whose main agenda is to
agree on product discharge sequence for a particular vessel before
commencement of discharge.

b) TPA, The Agency’s marine Inspector, supplier’s marine surveyor, Single

Receiving Terminal operator where applicable and the master of the ship will
30
 conduct key meeting to agree on the discharge plans before commencement
of discharge.

18.3.2. Sampling and Testing of the Product before Discharge from

Delivery Vessel

a) The procedure for sampling and testing of petroleum products shall be as

prescribed by Tanzania Standard No. TZS 644 or as shall be amended from
time to time.

b) There shall be joint sampling between TBS, Agency’s Marine Inspector, single
receiving terminal operator’s Marine surveyor where applicable and supplier’s
marine surveyor. The Joint sampling team shall take five (5) samples which
shall be sealed by TBS, Agency’s Marine Inspector, single receiving terminal
operator’s Marine surveyor and Supplier marine surveyor, each entity shall
retain a single sample in case of quality dispute and the remaining sample
shall be used for testing quality of the imported product by TBS.

c) Sample taken from ship cargo tanks using appropriate method as per Manual
of Petroleum Measurement Standard Chapter 17 will be analysed for quality
parameters prior to discharge. Samples collected shall be analysed for quality
in accordance with the TBS testing criteria and TBS shall issue a Quality
Certificate to Agency, supplier, single receiving terminal operator and all
concerned parties for every ship.

d) In the event that the test results issued by petroleum independent surveyors
are not equal with the results issued by TBS. The retained samples shall be
tested at TBS lab and the results issued by TBS shall be final and binding.

e) An OMC may appoint a surveyor to verify on quality and quantity of any

petroleum products received in the nominated terminal.

f) Supplier’s Independent Surveyor shall take additional samples which shall be

used by them in testing quality of petroleum product.

g) The Surveyors and Marine Inspectors shall issue a test certificate for the tests
conducted in verifying the quality of imported petroleum products.

31
18.3.3. Checking of Receiving Infrastructures

a) The Marine Inspectors and Surveyors shall verify and issue report on the
status of the receiving infrastructures before commencement of discharge.

b) If there is serious concern on the integrity of the receiving infrastructure the

marine surveyors and Inspectors shall immediately report the incidence to
the Agency. The Agency shall analyse the incidence and make decision
whether the respective terminal should be used to receive petroleum
products or not.

c) Receiving pipeline(s) shall be packed/filled with products in case it is empty

or partial prior to commencement of discharge.

d) Any ullage restriction on the shore tanks shall be noted and reported to the
Agency and the same shall be dealt with as provided in this manual, the
contracts and relevant laws.

18.4. Discharge Operations

Discharge Operation from Vessel to Oil terminal or Single Receiving Terminal

a) Discharge operation must be discussed and agreed during pre-discharge key

meeting. The decision reached by the Pre- discharge key meeting shall be
final and binding. The Oil terminal or single receiving operator or any other
person is not allowed to change the agreed discharge sequence without
getting approval from the Agency.

b) Discharge operations shall be witnessed by the Agency’s marine Inspectors,

supplier surveyor and single receiving operator surveyor where applicable
who shall be required to prepare a transfer log on receiving terminal
discharge performance, time logs and pump pressures at the manifold.

c) The Agency’s Marine Inspector upon entering into the contract shall also sign
service level agreement with the Agency.

d) The Agency’s Marine Inspector shall lodge protest to any party that is party
in the receiving process that frustrates the process in any way and may seek
recovery of damages from the defaulting party (ies) on behalf of affected
party (ies).

32
e) During discharge operations (Marine Surveyors and Inspectors) of the
Agency, supplier and single receiving operator where applicable shall:

i. Take samples on board the vessel, jetty head and receiving terminal
before and after completion of discharge to receiving terminal. The
samples taken are for retention purposes. Samples shall be sealed by
the surveyors and Inspectors and each shall retain two samples.
Records of seal numbers for each retained samples shall be
communicated to the Agency, the supplier and receiving terminal
operator. Samples shall be retained for at least sixty (60) days.
ii. Additionally, running samples shall be taken at the jetty head after
every two hours during the discharge operations for Combi Cargoes.
The samples taken shall be used for testing/analysis of key parameters
and retention. Samples shall be sealed by all surveyors and Inspectors
and each surveyor shall retain two samples. Records of seal numbers
for each retained samples shall be communicated to the Agency, Oil
terminal or single receiving terminal operator where applicable and the
supplier. Samples shall be retained for at least sixty (60) days. Testing
of density and appearance should be done onsite and the results be
issued immediately within fifteen (15) minutes.
iii. Results for the analysis on running samples should be communicated
to the Agency, OMCs or single receiving terminal operator and the
supplier within five (5) hours from the time the samples were taken.
The Marine surveyors and Inspectors should take immediate actions to
mitigate the risk of contamination of product immediately after they
became aware that there is risk of contamination or the analysis done
suggest that the product has been contaminated.
iv. Specific procedure to be followed during discharge of JET A1.
(a) During receipt of the product, samples shall be drawn from the
single receiving terminal pipeline at a point as close to the ship
as possible for a Control Check.
(b) For dedicated vessels line samples shall be drawn
approximately five (5) minutes after beginning and immediately
before the end of discharged to oil terminal or single receiving
terminal.
(c) For receipt from a non-dedicated vessel, samples, should also
be taken at least every two (2) hours during discharge.
(d) Automatic or continuous line monitoring systems that include
calibrated densitometers/turbidity analyzers (or equivalent) may
be considered as equivalent to the above monitoring.

33
 (e) Any observed contamination should be reported immediately to
the Ship’s Master, supplier, Agency and single receiving terminal
operator where applicable.
(f) If there is any indication of the product being contaminated or
gross amount of water or dirty observed the discharge should
be stopped and the situation should be investigated.

f) In the event of any dispute in relation to contamination of product during

discharge, samples taken under paragraph 21.4(e) shall be used to determine
the point and cause of contamination. Samples taken under paragraph
21.4(e) shall be tested at an internationally accredited laboratory mutually
agreed by the Agency, OMCs, receiving terminal.

g) Before starting and after completion of discharge the petroleum Marine

Inspectors shall jointly take samples from the receiving manifold the said
samples shall be tested at TBS Laboratory. The results shall be used to
determine liabilities in the event of proof of meter breakdown results from
the product discharged from the delivery vessel.

h) The Agency is mandated to intervene on the vessel discharge in case of any

dispute arising from the shipping and supply contract.

i) In absence or malfunctioning of flow meter at the inlet of single receiving

terminal, the single receiving terminals shall not be allowed to transfer
product to recipient when receiving petroleum products from delivery vessels
unless approved by the Agency as per single receiving terminal procedure.

j) If it will be proved that the receiving terminal infrastructures or seals have

been tempered with the intention of stealing petroleum products during
receipt, the respective terminal owner will be penalised pursuant to
Petroleum Bulk Procurement Regulations in place. During such occasion the
highest figure between arrival and outturn will be used as receipt figures for
that terminal.

19. TRANSFER OPERATION FROM SRT TO OMCs OIL TERMINALS

a) The transfer sequence must be discussed and agreed during pre-transfer meeting.
The decision reached by the Pre- transfer meeting shall be final and binding. The
receiver, single receiving operator or any other person is not allowed to change
the transfer sequence without getting approval from the Agency.

34
b) Transfer operations shall be witnessed by the Agency Marine Inspector who shall
be required to prepare a transfer log on single receiving terminal performance,
time logs and pump pressures at the manifold.

c) The Agency Marine Inspector shall lodge protest to any party that is party in the
transfer process that frustrates the process in any way and may seek recovery of
damages from the defaulting party (ies) on behalf of members affected.

d) During transfer operations the Agency’s Marine Inspector and single receiving
operator’s surveyor shall:
1) Take samples from SRT tanks before and after the transfer process to
receiving terminals.
2) Take samples from receiving tanks before and after completion of
receipt of product by respective terminal. The samples taken are for
retention purposes. Samples shall be sealed by all petroleum Marine
surveyors and Inspectors and each shall retain two samples. Records
of seal numbers for each retained samples shall be communicated to
the Agency and the single receiving terminal operator. Samples shall
be retained for at least 90 days.
3) Specific procedure to be followed during transfer of JET A1.
a. During transfer of the product, samples shall be drawn from the
recipient pipeline at a point as close to the single receiving
terminal as possible for a Control Check;
b. For all transfer operations transfer line samples shall be drawn
approximately five (5) minutes after beginning and immediately
before the end of transfer to nominated terminals;
c. Automatic or continuous line monitoring systems that include
calibrated densitometers/turbidity analyzers (or equivalent) may
be considered as equivalent to the above monitoring; and
d. If there are indication of the product being contaminated or
gross amount of water or dirty are observed the transfer should
be stopped and the situation should be investigated.

e) In the event of any dispute in relation to contamination of product during transfer,

samples taken under paragraph 18.4 (e) shall be used to determine the point and
cause of contamination.

f) Any observed contamination should be reported immediately to the single

receiving terminal operator and the Agency.

35
 g) Samples taken under paragraph 18.4 (e) shall be tested at an internationally
accredited laboratory mutually agreed by the Agency and the single receiving
operator.

h) Before starting and after completion of transfer from respective tanks at the single
receiving operator terminal and nominated terminals the Marine surveyor shall
jointly take samples from the said tanks. The said samples shall be retained for
future reference and tested at TBS Laboratory. The results shall be used to
determine liabilities in the event of dispute arising out of single receiving
operations.

i) The Agency is mandated to intervene on the transfer operation in case a recipient

in the single receiving operations has defaulted as per the shipping and supply
contract.

j) In absence or malfunctioning of flow meter at the inlet of receiving terminals, the

receiving terminals shall not be allowed to load trucks or conduct cross pumping
when receiving petroleum products from SRT unless approved by the Agency as
per single receiving terminal procedure.

19.1. Cargo Measurement

Cargo measurement at single receiving facility will be as per the manner provided below.

19.1.1. Methods

a) All Petroleum products into and from the bulk storage facilities shall be
measured in accordance with the relevant laws and procedures.

b) Measurements to establish petroleum quantities on board the vessel shall be

through Ullage Temperature Interface (UTI) and on shore tanks shall be by
tank dips or other measurement system approved by Weights and Measures
Agency.

19.1.2. Units

a) The accounting unit of measurement on board the vessel shall be in three decimal
places corrected to 20oCelsius in MT
i. Automotive Gas Oil (AGO);
ii. Unleaded Motor Spirit Premium (MSP);
36
 iii. Jet A-1;
iv. Illuminating Kerosene (IK);
v. Liquefied Petroleum Gas (LPG); and
vi. Heavy Furnace Oil (HFO).

b) Corrections shall be applied in accordance with the IP Measurement Table Ref IP

250 or any other measurement tables approved by the Weights and Measures
Agency (WMA) and shall conform to the industry practice.

19.1.3. Quantities

a) The arrival quantity of each delivery under this contract shall be determined by
WMA.

b) Density determined by TBS shall provide the basis for determining the arrival
quantity.

c) In the event of any dispute on the arrival quantity, the quantity determined by
WMA shall be final and binding to all parties.

d) The quantity reports (on arrival quantity) issued WMA shall be shared to the
industry before the product is discharged from the vessel.

e) Losses due to line slackness (realized at the end of transfer operations through
outturn report) will be handled in line with the standard Operating procedure as
prepared by the Agency.

f) Line loss from the vessel to the single receiving terminal due to line slackness will
be on the account of single receiving terminal operator.

g) All decisions relating to discharge operations (including but not limited to change
of berthing schedule and suspension of discharge operations shall be
communicated to the industry before being implemented.

h) DAP quantity for the purpose of invoicing Oil marketing companies (purchasers of
petroleum products) shall be the lower volume between BL figure and arrival
quantity.

37
19.2. Receiving Terminals Responsibilities when Receiving Petroleum
Products

a) Owners and operators of receiving terminals shall take all precautions and
observe international and industry practices when receiving petroleum products
from delivery vessels.

b) Products received and stored in the receiving tanks should be within approved
specifications.

c) Terminal owners and operators are required to immediately (within two hours)
report to the Agency and the Authority in the event they become aware that
the product which is being discharged into their terminal is contaminated or
there is spillage.

19.3. Customs Clearance

a) The Agency Marine Inspector shall notify all cargo owners of outturn
quantities for reference during settlement of applicable bills.

b) All taxes due on the product will be the responsibility of the individual OMC,
and the Agency shall only be responsible for the communications between
the OMCs and TRA in respect of quantities received whenever deemed
necessary.

20. OUTTURN REPORTS

a) WMA shall issue Discharge Report within three (3) days from completion of
final measurements of shore tanks

b) The Agency shall make sure that the outturn report is issued within two (2)
days after receipt of discharge report from WMA or from SRT to nominated
OMCs terminals.

c) Any complaint of the outturn report shall be lodged to the Agency within
48 hours from the time the outturn report has been issued. Failure any
complaint received thereafter shall not be considered.

d) Any warehoused product shall be accessed by the beneficiary as per the

proration data given by the Agency’s Marine Inspector. The beneficiary of

38
 the prorated quantity is entitled to get access immediately after the outturn
and warehousing report has been issued.

e) OMCs warehousing prorated quantity shall be required to give the said

product to the beneficiary within 24 hours from the time the beneficiary
has lodged notice of intention to evacuate the product. Failure to that the
bank guarantee or cash cover will be utilized to compensate the beneficiary.

21. BANK GUARANTEE

a) The OMC shall instruct his banker to issue a 5% bank guarantee or cash
cover (equivalent to 5% of the value of the product to be ordered in that
particular month) in favor of to the Agency prior to placing an order for
importation of petroleum product.

b) The bank guarantee shall be used to cover the under mentioned costs;
(i) Demurrage cost related to imported petroleum products under the
Bulk Procurement System.
(ii) Fines and penalties charged by PBPA.
(iii) Contribution/fees for importation of petroleum products.
(iv)Cost of disposing the product on financial hold.
(v) Handling and storage charges.
(vi) Amount payable to other government institutions in relation to the
importation of petroleum products through the bulk procurement
system.
(vii) Compensate the beneficiary of the warehoused prorated
petroleum product.

c) If the bank guarantee is not sufficient to cover cost itemize in the paragraph
above the Agency, the supplier and SRT operator shall have right to take
other legal measures to recover the unpaid amount.

d) Any OMC failing to submit the bank guarantee as required by the paragraph
above to do so shall have its ordered quantity removed from the tender
quantity.

22. INVESTIGATION OF DISCHARGE OPERATIONS

(a) Claims related to discharge operations shall be investigated by the

neutral and independent investigator appointed by the Agency in
consultation with the supplier, single receiving operator and receivers

39
 and/or any other institution which is involved in the operations subject
to investigation.

(b) Payment to the investigator shall be on the account of the claimant and
the defendant on equal basis.

(c) If there shall be more than one claimant or defendant, the distribution
of the portions shall be done prorata provided that half of the total cost
is paid by the claimant and half by the defendant.

(d) Cost of the investigations will be transferred to the identified defaulter

after the report has been issued.

(e) The Agency shall coordinate the investigation.

(f) The investigation report will be used in line with the shipping and supply
contracts and the laws governing importation of petroleum products.

23. INVOICING AND PAYMENT FOR THE PETROLEUM PRODUCT

Detailed procedure on invoicing and payment of petroleum products are provided

in the shipping and supply contract between the Agency and the Supplier and the
importation contract between the Agency and OMCs. Below are key aspects in
invoicing and payments.

23.1. Invoices (PFI and Final Invoice) to OMC

a) Supplier invoices will be in United States dollar based on FOB component plus
DAP premium based on the lower volume between the arrival quantity and
BL figure.

b) All amounts shall be calculated to four (4) decimal places.

c) The invoices should be sent to OMCs and the Agency within prescribed time
as stated in the shipping and supply contract.

40
23.2. Payment to Suppliers

a) An OMC shall provide an irrevocable Letter of Credit (LC) opened by an OMC’s

Bank but confirmed by any Bank as provided by the Supplier latest five (5)
calendar days before 1st day of delivery date range or latest five (5) calendar
days upon receipt of Proforma Invoice (PFI) from supplier whichever is later.

b) If the supplier will delay to submit proforma invoice the OMC shall be given
additional days from the deadline of opening LC which is equivalent to the
days delayed by the supplier.

c) The Supplier shall provide to the Agency a list of minimum ten (10) confirming
banks before signing the contract as provided in the Notice of Award.

d) The LC shall be payable at the Supplier’s bank, without offset, deduction or

counter claim and free of all charges latest 60 calendar days from the first
day of delivery window.

e) Charges for establishing the LC will be borne by the OMC.

f) LC advising charges, confirmation charges and any other charges shall be

borne by the Supplier.

24. DEMURRAGE
a) Demurrage computations shall be done by the demurrage committee
established by the Petroleum (Bulk Procurement) Regulations, 2017. GN. No.
198 of 2017.

b) The demurrage committee shall be appointed by the Executive Director and

shall be comprised of seven (7) members three (2) from OMCs and five (5)
from the Agency (three from operations department (supply and logistics
and planning), one from legal and one from finance department.

c) In the event that a given vessel delays to deliver or discharge petroleum

products resulting in a cascading effect, the Agency shall take measures to
ensure the cascading effect does not escalate beyond three subsequent
vessels.

41
24.1. Demurrage computation

a) Demurrage computations shall be in line with the terms and conditions

specified in the contract.

b) When need be during finalizing of the demurrage computations suppliers

of respective tenders will be invited for the purpose of issuing clarifications
and finalizing computations.

24.1.1. Delay of Vessels by OMCs

a) The Agency shall ensure that any person causing delay of vessel discharge
due to either ullage constraints, unopened LCs, delays in issued quality
results, fault in infrastructure or any other reasons, are held responsible for
the respective demurrage charges for that vessel.

b) Demurrage cost resulting from cascading effect caused by the delays by the
any person shall be borne by the person who caused delay in discharge of
petroleum products from the last delivery vessel. For the purpose of this
clause the cascading effect shall be limited to three subsequent vessels which
will discharge petroleum products through the same delivery point after the
delivery vessel which has been affected by OMC delay.

c) Evaluate demurrage claims by the supplier and isolate.

i) Demurrage charges to be shared by the industry; and
ii) Demurrage charges to be paid by causative party.

24.1.2. Delay of Vessel by the Supplier

a) Demurrage computation for vessels arriving after the delivery date range
shall start from all fast.

b) Demurrage cost resulting from cascading effect caused by the late

delivery of the BPS vessel shall be borne by the supplier of the late
delivery vessel. For the purpose of this manual the cascading effect shall
be limited to three subsequent vessels which will discharge petroleum
products through the same discharge point after the late delivery vessel.

42
25. CONSULTATIVE PROCESSES

The consultative process in the bulk procurement system shall be in the manner
provided below.

25.1. Aspects which Requires Board’s Involvement

a) The Board may consider forming Board Sub-committees to deliberate on and

ensure that all consultative processes are handled by the Board members
with appropriate skills and competences.

b) For better carrying of its responsibilities the Board may co-opt staff from the
registered OMCs with the required expertise to advice on complex situations
that may be beyond the expertise of the board members.

c) In the event of a national crisis in the supply of petroleum persisting for more
than a month a consultative meeting between the Ministerial Advisory Board
and the stakeholders may be held at the invitation of the Minister.

25.2. Operational Issues

a) The Agency shall when need be and when it will be deemed appropriate form
committee to perform any function as shall be directed by the Agency’s Board
or Authority.

b) The Agency shall when need be facilitating negotiations between OMCs and
other stakeholders on matters which fall under the Bulk Procurement System.

c) The Agency shall conduct weekly stakeholders meeting for the purposes of
discussing operational issues and updating stakeholders on-going or
completed key activities under the Bulk Procurement System.

26. CORRESPONDENCES

Correspondences between the Agency and other stakeholders shall be in the manner
provided below.

43
26.1. Incoming Letters

All incoming letters/documents will be registered and kept safely by the Agency’s registry
officer in a trackable manner.

26.2. Outgoing Letters

a) All outgoing letters/documents must get approval of the Executive Director, and
have to be registered using the reference from the Agency.

b) Correspondences from the Board shall be signed by the Chairman of the Board or
any other director and the Executive Director.

26.3. Email correspondences

a) The Agency staff shall in their day to day operations communicate with other
stakeholders via emails.

b) Letter to be sent by the Agency or to the Agency can first be sent via email and hard
copies to follow.

c) Correspondences via email are binding.

27. CONFIDENTIALITY AND CONFLICT OF INTEREST

Confidentiality and conflict of interest matters shall be handled in the manner provided
below.

27.1. Confidentiality
The Agency has an obligation to maintain confidentiality of all confidential information
received by the Agency from stakeholders.

27.2. Conflict of interest

a) The personnel of the Agency shall not, without the prior consent and written approval
of the Board, be directly or indirectly, commercially involved with or hold interest in
any other business which competes with, a supplier and/or major customer of the
company as per the general company policy.

b) A member of the Board shall not participate in his advisory role, in the matter in
which he/she has direct or indirect interest.

44
28. HANDLING OPERATIONAL COMPLAINTS

All complaints lodged to the Agency shall be dealt with promptly and within the time
limits provided in the working documents. However, complaints over and above PBPA
mandate shall be escalated to the Authority.

29. MONITORING AND EVALUATION

For smooth implementation and improvement of the bulk procurement of petroleum

product, monitoring of the contractual performance and adherence of the law governing
Bulk Procurement System by the significant parties will be carried as indicated below: -

a) Monitoring of Contractual Performance goes hand in hand with taking appropriate

measures as per the contract and other legal instruments. The Agency shall take
appropriate action to safeguard BPS operations.

b) The Agency shall compile a formal report at the end of every Supply Contract/ period
evaluating performance of all contractual obligation and compliance with the laws
governing bulk procurement of petroleum products by all concerned parties as
provided below;

i. Supplier – Delivery Date Range, Volume losses, supply of

documentation, quality, demurrage claims, and supply of product within
approved specifications, delays during discharge (vessel operations).
ii. OMC (– e.g. LC opening, delays in discharge, payment of levies/
fees/contribution and penalties charged by the Government institutions
operating under BPS”)
iii. PBPA performance – providing necessary information and taking
appropriate actions as required by the contract.
iv. TBS- Issues related to testing and issuing quality certificates.
v. TPA- Management of discharge operations.
vi. WMA- Measuring and issuing certificate on imported quantities and
quantities received by individual importers.

c) After consultation with the Ministry responsible for Petroleum Affairs and the Authority
any supplier or surveyor who is found to have contravened Petroleum Bulk
Procurement Regulations and to have engaged in gross misconduct shall be dealt in
line with the applicable laws.

d) After the completion of performance of the contract with the supplier or the surveyor,
the Agency with the respective parties shall sign a clearance form acknowledging
45
 completion of performance of all obligation under the contract. In the event there are
pending obligations it should be clearly stated which obligations are still pending.

30. REVISION AND AMENDMENT OF THE CONTRACTS

a) Revision and amendment of the key terms of the contract shall be done in
consultation of all parties involved in the Petroleum Bulk Procurement System (TRA,
EWURA, TBS, WMA, Suppliers, OMCs, Surveyors, and Banks and Financial
Institutions etc). The agreed revised version of the contract shall be used until such
other time when there will be need to revise and amend the contract.

b) Amendment of the contracts based on the operational requirements such as change

of delivery date range; increase or decrease of volumes shall be effected vide
Addendum signed by both parties consenting the alterations.

31. PENALTY

Any person or institution that distorts the functioning of the BPS or wilfully endangers
the functioning of the competitive supply system or causes the Agency not to function
as required shall be liable to a fine prescribed in the Schedule of the Petroleum (Bulk
Procurement) Regulation, 2017 GN No. 198 of 2017 or as shall be amended from time
to time.

32. DISPUTES SETTLEMENT AND GOVERNING LAW

Disputes shall be settled in line with the guidelines provided below;

a) All disputes will be resolved as stipulated in the contracts;

b) Disputes between parties which are by law required to be handled in the first instance
by EWURA shall be dealt with as such.

c) In case of any dispute which is not subject to EWURA’s jurisdiction, the parties may
find redress with respect to such dispute as per the Arbitration Act 2020

d) Based on the nature of the litigation, the Agency might be required to engage external
lawyers. Any decision to engage external law firm shall be approved by the Solicitor
General.

e) The contracts entered as a result of this manual shall be constructed in accordance

with the governing laws of Tanzania.

46
33. REVIEW AND AMENDMENT OF THE MANUAL
(a) Amendments to BPS operations manual are required whenever the contents no
longer accurately reflect the operations requirement and the industry practices.

(b) Amendments are necessary whenever changes occur in the following areas:
i. Operating conditions or procedures; or
ii. Change of law.

(c) The review and amendment of the manual shall be done through a consultative
process which will involve all stakeholders in the petroleum industry and shall be
done after three years or earlier, provided there is a significant change in BPS
implementation.

(d) All amendments shall be vetted by EWURA and approved by the Minister responsible
for petroleum affairs.

47
34. APPENDIX 1 SPECIFICATIONS FOR THE PRODUCTS

SPECIFICATIONS FOR THE PRODUCTS SHALL BE AS SHALL BE PROVIDED BY TBS

48
35. APPENDIX 2 SHIPPING AND SUPPLY CONTRACT FOR AGO

PETROLEUM BULK PROCUREMENT AGENCY

(PBPA)

SHIPPING AND SUPPLY CONTRACT

FOR

TENDER NO. PBPA/CPP/AGO/…../…/……

FOR

SUPPLY OF AGO
FOR
THE MONTH OF ………..……..

DELIVERY DATE RANGE

………….. TO ………….

49
PETROLEUM PRODUCTS BULK PROCUREMENT SYSTEM TANZANIA
SHIPPING AND SUPPLY CONTRACT

This contract is made on this ……………….day of ......................... (Hereinafter referred

to as “the Contract”)
BETWEEN
The PETROLEUM BULK PROCUREMENT AGENCY of P.O Box 2634, Dar es Salaam,
the executive agency established by Government Notice No. 423 OF 2015, having its
registered office at TPA- ONE STOP CENTER BUILDING, 11TH Floor, Plot no. 1/2,
SOKOINE DRIVE, hereinafter referred to as “the AGENCY acting on its own behalf and
on behalf of Oil Marketing Companies, both herein referred to as “OMCs”/
“Purchasers”.
AND
…………………….. Hereinafter referred to as “the Supplier” on the other part
WHEREAS, Purchasers are required by the Petroleum Act No. 21 of 2015, the
Petroleum (Bulk Procurement) Regulations 2017 (GN No 198 of 2017), to import AGO
through the Bulk Procurement System.
WHEREAS, the AGENCY plays a fundamental role in the operations of this Contract as
coordinator of importation of petroleum product through the use of international
competitive tender system on behalf of the Purchaser.
WHEREAS, each Purchaser signatory to the Shipping and Supply Agreement with the
AGENCY (as specified in R. 5(C) And 17 (2) of The Petroleum (Bulk Procurement)
Regulations 2017 GN. No. 198 Of 2017), Together with ……………………………….(name of
the Supplier) obtained through competitive tendering process administered by the
AGENCY for the considered period, irrevocably agree to abide by the terms of this
contract.
WHEREAS OMCs procuring petroleum product under this agreement shall be (i) licensed
by EWURA and registered by AGENCY (ii) at the time of placing their orders, there is
no default payment on their shares of refined petroleum product from previous contracts.
AND WHEREAS
In consideration of the payment to be made by each Purchaser to the Supplier as
hereinafter mentioned, the Supplier hereby covenants with the AGENCY (on behalf of
the Purchasers) to supply AGO and to remedy defects therein in conformity with all
aspects in respect with provisions of the contract.
Each Purchaser as expressed in this contract and the Shipping and Supply Agreement
between the Purchaser and the AGENCY hereby covenants to be bound by this
contract and to pay the Supplier in consideration of the supply of AGO and the
remedying of defects therein, the contract price or such other sum as may become
50
payable under the provisions of this contract at the times and in the manner prescribed
by this contract.
The AGENCY confirms that it has collected the procurement requirements of AGO from
OMCs, and shall; (i) coordinate invoicing for the respective shares of AGO to be supplied
to OMCs by the Supplier; (ii) coordinate diligent receipt by OMCs of AGO from the delivery
vessel; (iii) maintain records of delivery and performance and ensure the product
imported meet the prescribed specifications.

NOW THEREFORE IT IS AGREED AS FOLLOWS:

1.0 EFFECTIVE DATE
1.1 This Contract shall take effect on …………………………and shall continue until all
obligations have been completed to be performed or terminated as provided
hereinafter.
2.0 ABBREVIATIONS, DEFINITIONS AND CONSTRUCTION
2.1 The following Abbreviations shall have the meanings provided:
AGO Automotive Gasoil
Bbls @60oF Barrels at 60º Fahrenheit
B/L Bill of Lading
BPS Bulk Procurement System
COD Completion of Discharge
CPP Clean Petroleum Product
DAP Delivered at Place (incoterms 2010)
DISPORT Discharge Port
EWURA Energy and Water Utilities Regulatory Authority
FOB Free on Board
ICC International Chamber of Commerce
INCOTERMS International Commercial Terms (Set by International
Chamber of Commerce, U.K)
IFIA International Federation of Inspection Agencies
KOJ Kurasini Oil Jetty
L/C Letter of Credit
LIBOR London Inter-Bank Borrowing Official Rates
MT Metric Tonnage in air
51
 NOR Notice of Readiness
OMC Oil Marketing Company
SBM Single Buoy Mooring
SHINC Saturdays, Sundays, Holidays included
TASAC Tanzania shipping Agency Corporation
TBS Tanzania Bureau of Standards
TPA Tanzania Ports Authority
TRA Tanzania Revenue Authority
TT Telegraphic Transfer
USD United States Dollar
WMA Weights and Measure Agency

2.2 The following terms shall have the meanings provided:

2.2.1. “Agency” shall mean the Petroleum Bulk Procurement Agency.
2.2.2. “Cargo” shall mean a specific delivery/shipment of refined product of
Industry Import.
2.2.3. “Charter Party Terms” shall mean the terms of the Contract as shall be
agreed between the SUPPLIER and the ship owner for a specific Cargo.
This shall include any form of agreement.
2.2.4. “Cleared Funds” shall mean payments confirmed by Supplier’s Bank as
received either through Electronic Funds Transfers (EFT) or Letter of
Credit.
2.2.5. “Delivery Date Range” shall mean the dates of delivery.
2.2.6. “Demurrage Committee” shall mean the demurrage validation and
verification committee.
2.2.7. “Effective Date” shall mean the date of the execution of the contract.
2.2.8. “Financial hold product” shall mean a product which has not been secured
by purchaser either by way of letter of credit or Electronic Funds Transfers
(EFT).
2.2.9. “Full Cargo” shall mean total tendered parcel size, with operational
tolerance of+/- 5% at Supplier’s option, which will be allocated in full to all
Purchasers prorata based on their placed orders.
2.2.10. “PBPA Marine Surveyor” shall mean Agency Employee assigned to perform
marine operations under the Bulk Procurement System.
52
 2.2.11. “OMC” shall mean an Oil Marketing Company signatory to this Contract as
well as to the Shipping and Supply Agreement who is the Purchaser of
petroleum product subject to this Contract.
2.2.12. “Purchaser” shall mean any person procuring petroleum products through
Bulk Procurement System (BPS).
2.2.13. “Product” Shall mean AGO.
2.2.14. “Replacement cargo” shall mean a different product which is within the
approved specification imported after the initial import has been declared
off spec as provided in this contract.
2.2.15. “Safe berth” shall mean a berth which vessels so conforming, and having
any beam, can at all times safely reach and leave and at which such
vessels can lie at all times safely afloat.
2.2.16. “Supplier” shall mean an entity signatory to this contract and which has
been awarded a tender to supply AGO through BPS.
2.2.17. “Tender” shall mean an invitation to treaty/contract to supply AGO under
the Bulk Procurement System.
2.2.18. “Vessel pre-discharge Meeting” shall mean the meeting chaired by Agency
Marine Inspector and attended by nominated Terminal Representatives
and receivers, whose main agenda is to agree on product discharge
sequence for a particular vessel.

3.0 TRANSIT PRODUCTS PROCURED UNDER BPS

3.1 The OMC shall be a notifying party for the transit cargo and shall inform the
Supplier the consignee(s) on whose name the product shall be manifested and
warehoused under transit, and shall take full responsibility for performance this
agreement. In addition, the Purchasers shall;
a) Place orders /nominate the quantity of product on behalf of the transit
consignees;
b) Eleven (11) days before the birthday of delivery date range the OMC
shall notify the supplier copy PBPA on cargo splits and consignee details.
c) Ensure L/Cs are opened and payments are made and transmitted to the
Supplier within the specified time; and
d) The supplier has the right to perform KYC

3.2 Any payment default by the consignee of the transit cargo shall be treated as
default by the Purchaser that nominated the defaulting consignee.

53
4.0 DOCUMENTS FORMING PART OF THE CONTRACT
4.1 The following documents shall form, and be construed as part of this Contract:
a) TBS product Specification,
b) Shipping and Supply Agreement between Agency and OMCs,
c) Price, Quantity and delivery Schedule.
d) Bidding documents,
e) LC and Invoice Formats.
f) The Agency’s Notice of Award to Successful Bidder,
g) Supplier Performance Security Bond as per format included in the BPS
Tender Document,
h) Holding and release certificate for product under financial hold,
i) Certified true copy of charter party terms and conditions. The charter
party agreement shall not be tempered with.
j) Bank guarantee from the OMCs
k) Documents submitted by the Supplier during application for
prequalification.
l) Standard Operating Procedure for Petroleum products
receipt/Discharge from the vessel

4.2 The Agency reserves the right to verify the authenticity of the submitted charter
party agreement. In the event that it will be established that the supplier has
submitted forged or tempered charter party agreement the suppliers shall be
penalized in accordance with clause 18.6

5.0 QUANTITY & CARGO NOMINATION

5.1 The quantity to be supplied under this contract shall be a Full Cargo as per
delivery date range in the price, quantity & delivery schedule, prorated to each
Purchaser that has placed orders for product on the delivering vessel.
5.2 Minimum Batch per vessel for each Purchaser shall be 500 MT
5.3 Minimum Batch per receiving terminal shall be 1000 MT
5.4 Minimum order per delivery month shall be 1000 MT
5.5 Supplier is not allowed to deliver AGO below or above the tolerance (+/-5%).
In the event the vessel has arrived with cargo outside tolerance level the
supplier shall;
i. Notify the Agency upon Purchasers willingness to purchase
additional quantity. The product should be for transit only
ii. Pay a penalty of USD 5 per MT for under delivered quantity.
iii. Notwithstanding the provision of clause 5.5(a) the supplier shall
be required to pay penalty of USD 5 per MT for the added arrival
quantity.

54
 iv. Compute demurrage taking into account the added arrival
quantity (Full cargo).
5.6 The Supplier request to use BPS vessel to load private transit cargo as stipulated
in the price quantity and delivery schedule shall be lodged to the Agency not
later than 15 days before the first day of delivery date range. Any request
lodged out of time shall not be considered.
5.7 Notwithstanding the provision of clause 5.5 of this contract. Acceptance of the
Supplier request to use BPS vessel to carry transit cargo shall be made under
the following conditions.
i. Premium shall be diluted prorata to the added transit cargo. The
formula for diluting premium is as provided below
Diluted Premium=Tendered Premium X Tendered Quantity
(Tendered Quantity + Additional Quantity)

ii. Demurrage shall be computed by taking into account the added

transit cargo
6.0 DELIVERY TIME, POINT AND DISCHARGE OF PRODUCTS
6.1 The delivery date range as per Appendix 1 of the bid document purchased by
the Supplier is to be strictly adhered to. PBPA in consultation with the Supplier
can request change of delivery date range provided that such request is
communicated in writing at least thirty (30) days before the first day of the
original delivery date range or at least thirty (30) days before the first day of
the revised delivery date range whichever comes first. Any request which will
be made out of time will not be considered.
6.2 Full cargo shall be delivered DAP ONE SAFE BERTH ONE SAFE port SBM Dar es
Salaam for AGO.
6.3 The cost of storing product into nominated terminals which can receive direct
from SBM shall be borne by the individual Purchasers at the rate and terms
agreed between individual Purchasers and terminal owners.
6.4 The vessel delivering AGO under the BPS must conform to TPA Shipping
standards as well as minimum pressure at vessel discharge Manifold of 8 bars
& Maximum pressure of 12 bars at vessel discharge manifold at SBM.
6.5 For any vessel not meeting the minimum specification specified in clause 6.4
above resulting in discharge delays; such additional time incurred due to delays
shall not count as time on demurrage on that particular vessel as well as the
vessels that have already tendered NOR during discharge of poor performing
vessel.

55
7.0 QUALITY, QUANTITY AND INSPECTION
7.1 Quality of AGO delivered and discharged pursuant to this contract shall be as
per the specifications provided by TBS included in BPS tender document.
7.2 The quality of Product delivered under this contract shall be determined by TBS.
7.3 The Agency shall reject any AGO that has been confirmed by TBS as not
meeting specifications as per clause 7.1 above.
7.4 Representative samples of the cargo on arrival at discharge port shall be taken
and sealed by the Agency Marine Inspector, Supplier Marine Surveyor PBPA
Marine inspectors and TBS and the same shall be retained by all parties. Each
party shall keep records of the numbered seals and sample reference number.
7.5 The Agency shall retain three sets of sealed samples for at least ninety (90)
days.
7.6 Any product which has not met the approved TBS specification shall not be
offloaded from the delivery vessel.
7.7 In the event of any dispute on quality of the cargo, the sealed representative
samples taken and retained by Supplier Marine Surveyor Agency Marine
Inspectors and TBS in accordance with clause 7.4 above shall be retested by
TBS or any other laboratory contracted by TBS in the presence of representative
of the Agency, and the Supplier. The results of which shall be the basis of
resolving the dispute. Supplier Marine Surveyors shall be allowed to witness
testing of all samples.
7.8 The arrival quantity under this contract shall be determined by WMA. Density
determined by TBS shall provide the basis of determining the arrival quantity.
7.9 In the event of any dispute on arrival quantity, the quantity determined by WMA
shall be final and binding.
7.10 During discharge operations PBPA and Supplier shall;
i. Take samples on board the vessel, at the jetty head and tanks
of receiving terminals before and after completion of discharge
to receiving terminals. The samples taken are for retention
purposes.
ii. seal all samples and clear labelled them with the location and
source, the date and time of sampling, a unique reference
number, the sample type, the grade of fuel, the batch number
and a means of identifying who drew the sample. The label shall
be printed and filled in with ink that does not run when exposed
to either water or hydrocarbon.
iii. Records of seals numbers for each retained samples.

56
 iv. Retain samples taken under clause 7.10 (a) for at least ninety
(90) days.
7.11 In the event of any dispute in relation to contamination of product during
discharge, samples taken under clause 7.10 shall be used to determine the
point and cause of contamination.
7.12 Samples taken under clause 7.10 shall be tested at an internationally
accredited laboratory mutually agreed by the Agency, the Purchasers and the
Supplier.
7.13 Each vessel shall carry three load port samples for each vessel compartment,
the sample shall be retained by Agency and Supplier Marine Surveyor.

8.0 MANAGEMENT OF DISCHARGE OPERATIONS

8.1 Discharge sequence of AGO shall be as agreed during Vessel pre-discharge
meeting. Any deviation from the agreed discharge sequence shall be approved
by the Agency and the Supplier after consultation with respective receiver.
8.2 Purchasers are required to issue ullage confirmation two (2) days before the
berthing date at disport.

9.0 HANDLING OF REJECTED OFF SPEC CARGO AND REPLACEMENT CARGO

9.1 Subject to clauses 7.1, 7.2, and 7.3 above, TBS shall guide the Agency in
accordance with TBS standards and regulations on the way of handling the
rejected off spec AGO and the Agency shall advice the Supplier accordingly.
9.2 If TBS has confirmed that the imported cargo does not meet AGO standards
applicable in BPS tenders, the Agency shall reject the cargo and inform the
Supplier to replace the cargo; the replaced cargo must meet required
standards and it shall be authenticated by a new set of shipping documents.
The new set of shipping documents shall be supplied by the Supplier within
terms and conditions of the contract or terms and conditions which will be in
place at the acceptable time of delivery whichever is favorable to the
Purchasers.
9.3 Any such replaced AGO shall be treated as delayed product and shall be
subject to late delivery penalties provided in this contract.
9.4 Purchasers shall be relieved from the late payment penalties accrued on the
rejected cargo. Late payment penalty shall start to accrue upon arrival of the
replaced cargo.
9.5 The Supplier shall be required to refund all money advanced or cancellation
of any confirmed L/C from the Purchaser with compensation for any costs
incurred in establishing the L/C once the cargo is rejected as off spec.
57
 9.6 Subject to clause 9.4 Purchasers shall be required to open and confirm L/Cs
as required by this contract based on the new delivery window to be
communicated by the Agency.
9.7 In the event that the intended replacement cargo does not meet AGO
standards applicable in BPS tenders, notwithstanding any other rights, the
Agency shall have the right to immediately call for an emergency tender. All
costs and expenses incurred by the Agency in arranging the delivery of a cargo
in replacement of the cargo which is off spec shall be borne by the Supplier
who supplied off spec product.
9.8 Subject to the laws governing the importation of AGO in Tanzania and terms
of this contract, any Supplier who will deliver AGO that does not meet the
approved specification, that Supplier shall be penalized as stipulated in the
Petroleum Act.

10.0 PAYMENT OF MARINE SURVEYORS

10.1 In the event the supplier has engaged Marine Surveyor charges for services
rendered at discharge port shall be borne independently by supplier.

11.0 VESSEL NOMINATION

11.1 Supplier shall nominate the Vessel to the Agency fifteen (15) days prior to the
first day of delivery window. Consequently, after consultation with TPA, the
Agency shall be required to revert to the Supplier with their acceptance or
rejection of the said nominations within twenty-four (24) running hours of
receipt of nomination from Supplier.
11.2 All vessels delivery product must have Double Hull, meet maximum age limit
of fifteen (15) years and meet any other requirement issued by TPA.
11.3 The supplier is allowed to substitute the nominated vessel provided that the
newly nominated vessel will undergo the vetting process as stipulated in
clause 11.1. All cost resulting from substitution of vessels Will be on the
account of the suppliers
11.4 Subject to clause 11.1 no nomination shall be rejected unreasonably and all
rejections must be supported by relevant documentations.

58
12.0 PRICE
12.1 The price of the product DAP SBM, Dar es Salaam shall be the Total of FOB
component plus DAP tender premiums as quoted in the Price and Quantity
Schedule of AGO herein attached to form part of this Contract.
12.2 The FOB component shall be according to the tender called and confirmed by
the Agency, this shall be the arithmetic mean of Platt’s high and low quotations
for dates of pricing as follows:
a) The applicable dates of pricing shall be as started in the Price and
Quantity Schedule of Petroleum product attached to the BPS tender
document which forms part of this Contract,

b) Any revision of delivery window shall not affect the pricing date range
defined in this contract,
c) Supplier agrees to supply (transfer ownership of) the quantity (+/-5%)
per vessel subject to L/C being established by the Purchaser within the
agreed time.
12.3 The FOB price reference for AGO 50ppm for the month of delivery as per the
price quantity and delivery schedule, shall be Platts Asia Pacific/Arab Gulf
market scan under the heading FOB Arab Gulf for AGO 0.005% S’ actual
United States barrel.
12.4 Port Handling Charges as well as TASAC and Delivery order charges shall be
on the Supplier’s account and shall be part of the DAP premium.
12.5 Any published correction to any relevant assessment shall be notified to
Purchasers within three (3) working days of the Platt’s correction.

13.0 INVOICING
13.1 Supplier’s final invoices shall be in USD based on FOB Component with
applicable pricing month as per clause 12.2 plus DAP premium as provided in
the price and quantity schedule and ship’s arrival quantity as determined
pursuant to clause 13.2.
13.2 Notwithstanding provision of clause 12.1, quantity to be used for invoice
purposes shall be the lower quantity between load port Bill of lading and ship’s
arrival quantity measured at discharge port in Tanzania
13.3 Final invoice shall contain the breakdown of prices as mentioned in clause 13.1
and 13.2 above, including (a) the detail of all considered quotations, expressed
in their original unit, be in USD/MT or USD/Bbls as the case may be, (b) in
connection with the quantity stipulated, the details of the two computations
below shall be expressly stated in the final invoice to determine the quantity

59
 based on the lower of the load port B/L quantity and the vessel arrival quantity
measures at the DISPORT in Tanzania:
i. for the computation of quantity utilizing the quantity measures
at DISPORT, refer to clause 7.8; and
ii. for the computation of quantity utilizing the quantity measured
at load port, the B/L figures shall apply for the final quantity to
be invoiced and for the conversion factor to be applied for the
conversion of the unit price from USD/Bbls to US/MT.
13.4 The invoice should be as per annexure SSC 01.
13.5 All amounts shall be calculated to 4 (four) decimal places.
13.6 Supplier to provide final commercial invoice to the receivers copied to the
Agency within 10 working days from the date of completion of discharge.
13.7 Latest by the fifth (5th) day from the date of completion of discharge or by the
fifth (5th) day from the end of the pricing month, which is later, the Supplier
shall send to the Agency copy to all Purchasers the final unit price of the cargo
detailing:
i. The quotation used as published by Platts in actual defined units
as per publications (USD/Bbl.
ii. The detailed computation of the total cargo quantity to be
invoiced for each of (i) quantities measured as DIPSORT, and (ii)
quantities measured at the load port using the B/L figures.
iii. Related premium and demurrage provision
13.8 The Agency shall revert within three (3) working days to the Supplier with a
copy to all Purchasers to confirm or provide comments on the unit price for
the purpose of the final invoice.
13.9 Supplier shall provide to PBPA table of summary of invoiced quantity per
purchaser latest 10 calendar days from the date the vessel has completed to
discharge. The table shall contain but not limited to name of the purchaser,
premium, FOB price and quantity.
13.10 The supplier shall issue final invoice within fourteen (14) days from the date
the vessel has completed discharge.
13.11 The final price shall be paid within time frame specified in this contract.
13.12 Profoma invoice to be used only for the purpose of opening L/C. Profoma
invoice should not be used in lieu of Final invoice for payment under the Letter
of credit. Only Final invoice shall be used for payment under the letter of credit
through documentary presentation.

60
14.0 PAYMENT AND PENALTY FOR LATE PAYMENT
14.1 Payment through L/C:
a) Purchaser shall latest five (5) calendar days before 1st day of delivery
date range or latest five (5) calendar days after receipt of the needed
documents from the Supplier provide an irrevocable L/C opened by the
Purchaser’s Bank but confirmed by any Bank as provided by the Supplier.
The Supplier shall provide to the Agency a list of minimum ten (10)
confirming banks before signing the contract as provided in the Notice of
Award.
b) L/C issued by any issuing bank shall be confirmed by any of the ten (10)
listed banks by the supplier, supplier has a right to reject any issued L/C
that has not been confirmed by the ten (10) listed banks.
c) The L/C shall be payable at the Supplier’s bank, without offset, deduction
or counter claim and free of all charges latest sixty (60) calendar days
from the first day of delivery window.
d) Charges for establishing the L/C will be borne by the Purchaser.
e) L/C advising charges and confirmation charges shall be borne by the
Supplier.
f) LC’s shall be confirmed within three (3) working days from the date the
LC has been issued as long as the purchaser has the acknowledgement
from the confirming bank that the L/C has been received Any cost
associated with delay of LC confirmation shall be on the account of the
supplier.
g) All commissions and charges from the issuing bank are for the applicant’s
(buyer’s) account. All commissions and charges from the confirming and
advising bank are for the beneficiary’s (Supplier’s) account.
h) All cost resulting from L/C amendments shall be borne by the party
which caused the amendments to be made. If the L/C amendment will
be caused by factors which are neither caused by the Supplier nor the
Purchaser L/C amendment cost will be shared equally between the
Supplier and the Purchaser.
i) For establishing of L/Cs by the Purchaser, the Supplier shall submit the
PFI and all needed documents to the Purchaser and the Agency latest
ten (10) calendar days before the first day of delivery window. For
purpose of this clause and clause 14.1 and 14.4 of this contract the
needed documents are;
i) copy of Bill of lading
ii) load port certificate of quality

61
 iii) Certificate of origin.

j) In issuing PFI the supplier shall take into account the information
provided by OMC in paragraph 3.1 (b) above.
14.2 The purchaser shall not be held responsible for any delays in opening the L/Cs
if such delays have been caused by the Supplier’s failure to send the needed
documents (to enable Purchasers to open L/C) within the time bar stated in
this contract. The Purchaser shall immediately upon receipt of the PFI notify
the Supplier and the Agency on the intention to make bank transfer or any
alternate payment as mutually agreed between Supplier and Purchaser
14.3 The Supplier shall notify the Agency on any alternate payment agreement
(including but not limited to bank transfer, pre-payment, fixed payment dates
or credit arrangement etc.) with the Purchaser not later than five (5) working
days prior to first day of delivery date range.
14.4 Bank Transfer or pre-payment
a) Any Purchaser who shall prefer to make payments by bank transfer or
pre-payment shall effect payments latest three (3) calendar days
before 1st day of delivery date range or latest five (5) calendar days
upon receipt of proforma invoice (PFI) from Supplier whichever is
later.
b) The Supplier at his discretion may offer discount to bank transfer or
pre-payment done by Purchasers.
c) The purchaser shall not be held responsible for any delays in making
bank transfer or prepayment, if such delays have been caused by the
Supplier’s failure to send the needed documents (to enable Purchasers
to make bank transfer or prepayment) within the time bar stated in
this contract.

14.5 Purchaser’s parent / Affiliate companies shall have the option to establish L/C
on behalf of Purchaser.
14.6 Transit parcels shall be paid by the consignees of the said parcels. Purchasers
who placed orders shall make sure that the consignees of transit parcels pay
for their cargoes within stipulated contractual duration. Any penalty resulting
from consignee of transit cargo delays to open LC for the transit parcel shall
be on account of the purchaser.
14.7 L/C and bank transfer or prepayment shall be made against presentation of
Supplier’s commercial invoice and certified copies of shipping documents as
listed in clause 14.8 unless mutually agreed otherwise between Supplier and
Purchaser.
14.8 For the purpose of this contract copies of shipping documents shall include:
a) Certificate of origin,
62
 b) Certificate of Quality (COQ) on vessels ship tank composite sample
on arrival at disport issued by TBS,
c) Certificate on vessel’s arrival quantity issued by WMA.

14.9 Supplier must ensure that cargo manifest is lodged to all relevant authorities
including but not limited to the Agency and TASAC with endorsed copy of Bill
of Lading (for customs purposes only) five (5) calendar days before the vessel
has tendered NOR. The cargo manifest shall correspond to the PFI and
endorsed BL provided to the Purchasers. Cost of lodging cargo manifest and
issuing of Delivery order shall be borne by the Supplier.
14.10 Any and all costs or charges or penalties resulting from delays in berthing
caused by any Purchaser not having settled or performed the required
declarations with TRA, TASAC and TPA will be solely payable by Purchaser.
14.11 Any and all cost or charges or penalties resulting from delays in lodging of the
cargo manifest caused by the Supplier and where such delays result in the
Purchaser’s delay to make necessary declaration to TRA, TASAC, and TPA will
be solely payable by the Supplier.
14.12 Where there is any default in providing the L/C or making bank transfer or
prepayment on due time, parties shall be guided by the provision of clauses
14.1(g & i),14.4, 14.15 and 14.16,
14.13 Supplier’s vessel shall only carry cargo ordered through the Agency or upon
approval from the Agency as provided in clause 5.6 and 5.7
14.14 Invoices shall be raised for DAP i.e. FOB component plus DAP premiums as
stipulated in this Contract and detailing the price computation (including the
Platts quotes as published, the conversion factor utilized and its computation,
quantity at load port and quantity at DISPORT, supported by documentation
stipulated in clauses 14.8 and 14.9.
14.15 Purchaser who delays to open L/C or make pre-payment as stipulated in this
contract shall be liable to penalties as stipulated in The Petroleum (Bulk
Procurement) Regulations, 2017. This penalty is payable to the Agency for
distortion of Bulk Procurement System
14.16 Purchaser who fails to pay for its share of a AGO at the due date as per the
credit period sixty (60) days shall be charged a late payment penalty of LIBOR
+2% per annum and be barred from participating in the following BPS tender
or both, the payment shall be paid to an escrow account operated by the
AGENCY for onward payment to the Supplier. For the purpose of this clause
due date is 60 days after the first day of delivery date range.
14.17 Notwithstanding the provision of clause 14.15 and 14.16, the Purchaser who
fails to pay or open L/C for the ordered product within five (5) days after COD
and the product has been discharged as product on financial hold, shall be
barred from participating in BPS until it has fulfilled all pending obligations.
63
 14.18 All third party charges associated with late payment e.g. TRA Taxes and
Penalties, TPA charges and penalties and storage charges, shall be on account
of the defaulting party and will be recovered as per actual prevailing costs.
14.19 In the event of variation on the invoiced amount, the Purchasers shall pay the
remaining unpaid amount within fourteen (14) days after the Supplier has
issued the final invoice. Likewise, within fourteen (14) days after the Supplier
has issued the final invoice, the Supplier shall refund to the Purchasers any
amount over paid.
14.20 Subject to clause 14.1 and 14.4 above the Supplier shall notify the Agency on
payment status for the vessel in the manner prescribed by the Agency.
14.21 In the event that the vessel will not be able to offload her cargo within delivery
date range as a result of vessel congestion or any other reason, the Agency,
Supplier and Purchaser may agree on payment reference dates and credit
period.
14.22 LC format shall be as provided in annexure SSC 02.

15.0 L/C DELAYED / DEFAULT

15.1 Where there is a default in providing the L/C or making bank transfer or
prepayment on due time, (if such delay and or default is not caused by the
Supplier) then the Supplier in consultation with Agency has the right to dispose
the batch elsewhere. For the purpose of this clause due date shall be five (5)
days before first day of delivery date range or five (5) days after receipt of
PFI and needed documents whichever is later.
15.2 In the event of the late provision of an LC or bank transfer or prepayment by
a particular Purchaser the product shall be discharged into a terminal
nominated by the Supplier as product on financial hold until payment has been
done. Storage cost shall be on the account of the defaulting Purchaser.
15.3 When there are ullage constraints as a result of the Purchaser failure to create
sufficient ullage to receive the ordered product, the purchaser shall nominate
the alternative terminal failure to, the purchaser shall be deemed to have
distorted BPS and shall attract penalties as prescribed in the Petroleum (Bulk
Procurement) Regulations, 2017(For the purpose of this provision penalty shall
be 0.5 USD per MT per day) also shall be liable to pay demurrage for the
delay.
15.4 Prior to signing the shipping and supply contract, the Supplier shall inform the
Agency at least three acceptable terminals, which Supplier considers
acceptable at the time, to discharge the product which would be on financial
hold

64
15.5 Where product has been off-loaded as product on financial hold, the product
shall be so offloaded as manifested, however, the Purchaser shall be liable to
pay storage charges at the rate and terms provided by the receiving terminal.
15.6 Where the product has been offloaded on financial hold, the receiving terminal
shall issue a holding certificate to the Supplier with copy to Agency. The
Holding certificate shall state and guarantee that no product will be released
without written confirmation from the Supplier and or its financier. Upon
receipt of the funds or of the L/C the Supplier or its financier shall issue a
release certificate to the terminal with a copy to the Agency.
15.7 The Supplier shall not prevent any vessel from berthing due to financial hold.
15.8 Failure to adhere to clause 14.1 and 14.4 above, the Purchaser shall not be
allowed to participate in the next tender until such product has been fully paid
to Supplier including all associated costs with Supplier, Agency and the
receiving terminal.
15.9 The Agency guarantees that costs incurred by the Supplier or any receiving
terminal resulting from the suppliers exercising right to dispose the product
as stipulated in clause 15.1 shall be settled by cashing the bank guarantee
provided to Agency by the Defaulting Purchaser, without prejudice to the
Agency’s rights and/or Supplier or receiving terminal further claims or
damages from the Purchaser.
15.10 The Agency does not guarantee that the available bank guarantee shall be
sufficient to cover all claims raised by the supplier. In the event that the
available bank guarantee is not sufficient to cover all cost incurred by the
supplier appropriate legal measures shall be taken against the defaulting
purchaser.
15.11 Any payment from the cashed bank guarantee shall be made by the Agency
to the Supplier or any terminal upon submission of relevant supporting claim
documents
15.12 In the event that the Purchaser has paid taxes but has not opened L/C the
Supplier shall continue to have rights (including right to dispose the product)
over the product on financial hold until the time when the product has been
paid for.
15.13 The Supplier shall, when disposing the product on financial hold take into
account taxes, wharfage and other costs paid by the defaulting Purchaser.
The Supplier, in consultation with the Agency, shall agree on modality to
refund taxes, wharfage and other costs paid by the defaulting Purchaser. The
refund thereof shall be subject to fulfillment of all obligations and liabilities
resulting from failure to open L/C. Failure by Purchaser to fulfill all obligations
and liabilities resulting from failure to open L/C the amount to be refunded
shall be used to cover outstanding obligations.

65
 15.14 The Supplier shall within 10 days after disposal of product on financial hold
submit to the Agency all documents relating to selling of the product in
question including detailed elaboration of the costing for the product this shall
include but not limited to losses, and storage charges. Failure to submit all the
needed documents implies that there was no cost incurred in disposing the
product on financial hold.

16.0 DOCUMENTS
16.1 Supplier shall forward to Purchaser and the Agency the following documents
not later than eight (8) calendar days prior to the first day of delivery date
range.
a) Copy of bill of lading endorsed with the relevant quantity per Purchaser;
b) Copy of load port Certificates of Quality;
c) Copy of load port Certificates of Quantity.
d) Copy of Certificate of Origin;
e) Copy of load port cargo manifest
f) Valid calibration certificates of;
i. Ullage Temperature Interface (UTI)
ii. All vessel Tanks
g) Copy of certificate of quality for each vessel tank issued at load port.

16.2 Failure to submit document within three days from BL date the supplier shall
be liable for penalty of 0.5 per MT per day payable to the purchasers.
16.3 Supplier shall forward to Purchasers and the Agency the following documents
prior to discharge:
a) Vessel ullage report issued at disport,
b) Certificate of Quantity at disport,
c) Certificate of Quality on representative Ship’s tank composite sample
taken and sealed on arrival at discharge port.
d) Tank cleanness certificate issued before loading.

16.4 For the purpose of clause 16.2 above, there shall be no discharge of cargo
before receipt of the documents required prior to discharge.
16.5 Upon completion of discharge the Supplier shall within five (5) working days
from the date of completion of discharge forward the following documents to
the Agency:
a) Copy of Charter Party Agreement or Fixture
b) Statement of facts at Disport,
c) Pumping Log at Disport,
d) Full Inspection Report after completion of discharge,

66
 e) Copy of list of representative ship’s tank composite samples on arrival
at disport retained by Marine Surveyor appointed by the Supplier.
f) Copy of list of representative ship’s tank composite samples on arrival
at disport retained by TBS.
g) Copy of list of load port ship’s tank composite samples

16.6 Where the vessel has been allocated a berthing window and discharge is
delayed due to Supplier’s failure to submit the required documents prior to
discharge any and all such costs incurred on either party shall be borne by the
Supplier.

17.0 LAYTIME
17.1 Lay time shall be 72 hours SHINC for a full cargo discharged at SBM Dar es
Salaam, commencing 6 hours from tendering Notice of Readiness or upon
vessel ‘All Fast’, whichever is earlier.
17.2 Time lost due to non-berthing of tankers during night time and/or awaiting
daylight, high tide, shall not count as used laytime.

18.0 DEMURRAGE
18.1 Supplier shall additionally be entitled to charge demurrage which shall be as
stipulated in the charter party terms and conditions but subject to a maximum
of USD 22, 000 per day pro rata based on actual discharged quantity at SBM
Dar es salaam port, which may be higher but not lower than the tendered
volume for specific cargo for pro rata computation purposes.
18.2 A provision for demurrage of US$ 2 /MT to be covered under the L/C.
18.3 Supplier shall provide demurrage computation to the Agency within seven (7)
working days from the COD date of each cargo. For the purpose of verification,
Supplier shall also be required to avail to the Agency the relevant supporting
documents. Failure to submit the claim within time and to submit necessary
documents will render the claim null and void.
18.4 The Agency through its demurrage committee shall validate the submitted
Demurrage computation and respective supporting documents within fourteen
(14) working days after receipt of the demurrage computation from the
Supplier. Failure to, the demurrage computation submitted by the Supplier
shall be considered as final and binding save for fraud or manifest error.
18.5 Computation of demurrage shall be based on the demurrage charges as per
the charter party agreement terms and conditions but subject to a maximum
United States dollar twenty-two (USD 22, 000) per day.

67
18.6 In the event it will be established that the submitted charter party agreement
is not genuine and the shown demurrage cost does not reflect the actual
demurrage charged by the charterer the supplier shall be liable to a penalty
of USD 50,000 payable to the Agency.
18.7 The final demurrage cost for that particular vessel shall be prorated to all
Purchasers after excluding demurrage cost which shall be paid by the
causative parties. The Supplier shall issue demurrage invoice to causative
parties. Particulars of the causative parties shall be communicated to the
Supplier by the Agency.
18.8 Based on clause 18.7 above the Supplier shall issue demurrage invoice within
seven (7) calendar days after final cost has been concluded as per clause 18.5.
18.9 Purchaser shall pay prorated final Demurrage cost due within fourteen (14)
calendar days of receipt of invoice from the Supplier. In case of any demurrage
refund, the Supplier shall pay the Purchaser within fourteen (14) calendar days
from date of invoice.
18.10 Supplier shall within thirty (30) days from the date of issuing invoice submit
to the Agency a report of demurrage of payment by respective Purchasers’.
Failure to it will be presumed that the Supplier has been fully paid and there
is no pending demurrage claim.
18.11 In the event the provisional demurrage under clause 18.2 above does not
suffice or the relevant Purchaser did not make payment within the time bar as
stated in clause 18.9, the Agency guarantees to pay demurrage by cashing
the same from relevant Purchaser’s bank guarantees or utilizing cash cover
latest ninety (90) days from issuance of the invoice. However, the Agency
does not guarantee that the available bank guarantee shall be sufficient to
cover all claims raised by the supplier. In the event that the available bank
guarantee is not sufficient to cover all cost incurred by the supplier,
appropriate legal measures shall be taken against the defaulting purchaser.
18.12 If the vessel arrives between 18:01 hrs. to 05:59 hrs., NOR tendered shall be
considered at 06:00 am of the next day; and laytime shall apply as per clause
17.
18.13 For vessel arriving within the allocated delivery window, time will commence
from the time when the NOR is tendered subject to terms and conditions of
this contract.
18.14 For vessel arriving before the allocated delivery window, time will commence
from 06:00 am of the first day of delivery window; and laytime shall apply as
per clause 17.
18.15 For vessel arriving after the allocated delivery window, the demurrage will
commence when the vessel is ALL FAST or commenced mooring.

68
 18.16 For vessel arriving after 18:01 hrs. of the last date of the allocated delivery
window shall be viewed as missing delivery date range and the demurrage will
commence when the vessel is ALL FAST or commence mooring.
18.17 Demurrage invoice shall be as provided in annexure 03.

19.0 STATEMENT OF ACCOUNTS

19.1 Supplier is obliged to issue statement of accounts to all receivers on monthly
basis. The statement of account shall cover product and demurrage payments.
If the supplier will not send the statements of accounts thirty (30) days after
the initial reminder, the Agency and Purchaser shall not be held liable for any
delays to settle the outstanding demurrage.

20.0 HOLDING PAID UP PARCELS AS SECURITY FOR UNPAID UP PARCELS

20.1 The supplier shall not hold paid up parcels as security for un paid parcels in
the same tender or different tenders.
20.2 For the purpose of this contracts parcels in the same tender shall be
considered as separate parcels based on the below circumstances
(a) Transit parcels
(b) Separate PFI have being issued

21.0 TITLE AND RISK

21.1 Tittle to the product shall pass to the buyer from the seller upon establishment
of the L/C or pre-payment by the buyer.
21.2 Risk to the product (including product on financial hold) shall pass from the
Supplier to the individual Purchaser as the product passes the vessel’s
permanent flange at disport SBM Dar Es Salaam.
21.3 As a separate and independent condition Purchasers agree that unless and
until the full purchase price is tendered, the product shall be the Supplier’s
product
21.4 Until delivery and discharge of the product from the delivery vessel the
Supplier shall insure the product against all risk to full replacement value and
shall not re-sell, use or part with possession with them.

69
22.0 TERMINATIONS
22.1 Without prejudice to any other remedy for breach of this Contract, or by
written notice of default sent to the concerned party, this Contract shall be
terminated by either party upon the occurrence of any of the following:
a) If the other party causes a fundamental breach of the Contract,
fundamental breach of Contract shall include, but shall not be limited to
the following:
i. The Supplier fails to deliver AGO within the period(s) specified in
the contract, or within any extension thereof granted by the
Agency, or
ii. The Supplier fails to perform any other obligation(s) which affect
security of supply under the Contract, or
iii. The Supplier has decided to unilaterally repudiate the Contract, or
iv. The Supplier has been convicted of having engaged in corrupt or
fraudulent practices in competing for or in executing the Contract,
or
b) Upon dissolution, bankruptcy, insolvency, or appointment of a receiver,
liquidator, or trustee in bankruptcy for that party.
c) Written notice to a party that a law has been introduced or amended by
an Act of Parliament so that it is unlawful for that party to operate or
perform its duties and obligations under this Contract or realize the
benefits of this Contract.
22.2 Notice of termination under this Contract shall not discharge or relieve the
withdrawing party of any rights, duties, obligations or liabilities arising prior to
such termination, nor prejudice any rights or remedy accruing before, at or in
consequence of such termination, or any proceeding with respect to any such
right or remedy including any proceedings by way of arbitration provided for
hereunder.
22.3 In the event the Agency terminates the Contract pursuant to this clause, the
Agency shall make necessary arrangement in such manner as it deems
appropriate, to supply petroleum products similar to the undelivered cargo,
and the terminated Supplier shall be liable to the Agency for actual costs for
such similar petroleum product as well as penalties as stipulated in this
contract.

23.0 LATE DELIVERY

23.1 Late delivery default arising from causes other than a force majeure event
shall attract a late delivery penalty of US$ 0.5 per metric ton per day to be

70
 paid by a Supplier to the Agency in order to compensate buyers for
compromising their minimum stocks or for compelling them to procure AGO
from other sources.
23.2 For this purpose, late delivery penalty shall accrue from the first day after the
allocated delivery date range until the vessel arrives.
23.3 Supplier shall make payment for late delivery to the Agency within thirty (30)
days from COD and the Agency shall make the payment to the purchaser
fifteen (15) days after receipt of the funds from the supplier.
23.4 Penalty prescribed in clause 23.1 and 23.2 shall be paid to an escrow account
operated by the Agency for onward payment to the purchaser within thirty
days from the date of signing a settlement deed/minutes with the Agency.
23.5 Until such payment is affected in full and receipt of monies confirmed by
Purchasers the Supplier shall not participate in any of the tenders for the
supply of AGO under the BPS until confirmation of full payment
23.6 Notwithstanding the provisions of clause 23.1 the lay-time on late arriving
vessel shall commence when the vessel berths.
23.7 Demurrage costs resulting from cascading effect caused by late delivery of the
BPS vessel shall be borne by the Supplier of the late delivery vessel.
23.8 For purpose of this contract, the cascading effect shall be limited to a
maximum of three subsequent vessels which will discharge products after the
late delivery vessel. For the purpose of this clause vessels shall include non
BPS vessels.
23.9 For purposes of ensuring efficient and effective BPS, the Agency shall take
necessary measures to minimize cascading effects.
23.10 Priority on berthing for discharge shall be given to CPP vessels that shall arrive
within the contracted delivery date range.
23.11 Any vessel arriving after the last date of the allocated delivery date range shall
berth and discharge if at all she will not interfere with the next vessel.
Otherwise she shall to wait on queue until when there is a window for berthing
to discharge.
23.12 AGENCY reserves the right to allow priority berthing in consultation with other
government authorities for national interest.

24.0 DELIVERY DEFAULT

24.1 Delivery default shall be deemed to have occurred if vessel does not arrive
and Tender Notice of Readiness to discharge at Dar es salaam within seven
(7) consecutive calendar days after the last day of the delivery date range, in
which case the Purchaser shall be relieved of its obligation to buy the cargo
71
 and the Agency reserves the right to encash the Supplier’s Performance
Security Bond.
24.2 The Supplier can demonstrate that there is a planned delivery by providing
copies of the undermentioned documents to the Agency on the first day of
delivery date range:
a) Bill of Lading,
b) Certificate of quality and quantity,
c) Vessel NOR at the load port, and
d) Load port statement of facts.

Provided that submission of the above required documents shall not relieve
the Supplier to pay late delivery penalty.

24.3 In the event that Supplier cannot provide the required documents as per
clause 24.2 above to the Agency, the Agency may call an emergency tender
to substitute the defaulted cargo. The Supplier shall be considered to have
distorted BPS and shall be liable to the fines and penalties as provided by the
laws governing importation of AGOs in Tanzania through Bulk procurement
system
24.4 In addition to penalties provided in clause 24.3 the defaulting Supplier shall
be barred from participating in Petroleum Bulk Procurement System as
Supplier for three (3) consecutive tenders.
24.5 In addition, the Supplier shall be responsible for all direct cost associated with
product delivery outside the allocated delivery date range. For purpose of
clarification direct cost shall mean extra freight and premium for an emergency
cargo.

25.0 PERFORMANCE SECURITY BOND

25.1 Within nine (9) calendar days after receipt of the Notice of Award from the
Agency, the Supplier shall issue a Performance Security Bond in the form of a
bank guarantee as per format specified by the Agency in the tender
documents and which shall be valid for the whole duration of the Contract
period.
25.2 Failure to comply with the requirement to provide Performance Security Bond
as stated in Clause 25.1 above, shall constitute sufficient grounds for
withdrawing the Notice of Award and forfeiture of the bid bond in which case
the Agency may call for an emergency tender or award the tender to the
second lowest responsive bidder.
25.3 It is the responsibility of the Supplier to make sure that the performance bond
is valid throughout the contractual period. For the purpose of this clause

72
 contractual period means the whole duration when there are pending
obligations to be performed by the Supplier.
25.4 If at the time when the Supplier’s performance bond is supposed to be cashed
it is established that the same has expired, the Supplier shall be required to
make payment by way of bank transfer within five (5) calendar days to be
computed from the date on which the performance security bond was
supposed to be cashed.
25.5 If the supplier has refused to submit the performance bond as required by
clause 25.1 the Agency has the right to use existing valid performance bond
issued by the supplier for any other tender to cover cost associated with this
contract.
25.6 Performance bond issued in relation to this contract can be used to cover cost
related to the supplier’s performance in other contracts.

26.0 GENERAL PENALTY FOR NON-PERFORMANCE

26.1 Notwithstanding any provision of this contract the Supplier or Purchaser shall
not be allowed to participate in the next tender, if there are pending
obligations resulting from this tender or previous tender, provided that a
proper notice has been issued asking the supplier or purchaser to fulfill the
contractual obligation and has not acted based on the issued notice.
26.2 The supplier or purchaser shall be allowed to participate in the next tender
upon fulfillment of the contractual obligations.

27.0 DISPUTE RESOLUTIONS

27.1 Notwithstanding any dispute the Supplier shall be required to continue without
delay to supply products in accordance with the terms of this agreement.
27.2 If at any time during the continuance of this Contract any dispute, difference
or question relating to the construction, meaning or effect of this Contract
or of any of the clauses herein shall arise between the parties, then the
aggrieved or affected party shall give written notice of not less than seventy-
two (72) hours to the other party of such dispute, difference or questions.
27.3 Parties shall be required to settle their dispute amicably within fifteen (15)
days of the occurrence or commencement of the amicable dispute resolution,
if the parties fail to settle the dispute amicably parties shall refer the disputes
for arbitration.
27.4 If parties fail to settle the dispute amicably, such dispute shall be referred to
arbitration within ninety (90) days from the date it has been established that
parties have failed to resolve the dispute amicably.

73
27.5 The arbitration shall be resolved with its seat in Dar es Salaam Tanzania or
any other place mutually agreed by both parties conducted in English language
by three arbitrators pursuant to the rules of the ICC unless the parties agree
otherwise.
27.6 Where a dispute between the Parties is solely of a technical nature, the Parties
shall have the option of referring such dispute to an Expert in accordance with
Clause 27.7 below.
27.7 If either Party gives notice in writing to the other of its intention to refer a
dispute to an Expert for determination, the following shall apply:
a) Parties shall seek to mutually agree in good faith on the appointment
of such Expert. The Expert shall be an appropriately qualified and
experienced professional who is knowledgeable regarding the
international AGO industry and is technically competent in the area
of the subject of the dispute to act as the Expert; and

b) Failing agreement by the Parties regarding the appointment of the

Expert within fourteen (14) days of the above notice, the matter
shall be refereed to full process for the matter to be referred to
arbitration

c) If the appointment of an Expert is agreed by the Parties:

i. the Parties shall provide their submissions and supporting
information with respect to the dispute to the Expert within
fourteen (14) days of the date of the appointment of the
Expert;

ii. the Expert shall resolve or settle such dispute taking due and
proper account of the submissions of the Parties and shall
render his decision in respect thereof within twenty-eight (28)
days following the date of the appointment of the Expert;

iii. the Expert shall be given all reasonable access to the

relevant documents and information relating to the dispute,
and access to the Delivery Point and sampling, weighing,
measurements and other data as the Expert shall reasonably
require;

27.8 Any decision of the Expert shall be final and binding on the Parties except in
the case of fraud or manifest error, in which case such alleged fraud or
manifest error by the Expert shall be dealt with in accordance with the law of
United Republic of Tanzania.

74
 27.9 The costs of the Expert in settling or determining a dispute shall be borne by
the losing Party unless the Expert determines otherwise.
27.10 The Agency shall lodge claims and take legal measures against the supplier
on behalf of the buyers, however on special circumstances the Agency may
allow buyers to personally lodge claims or take legal measures against the
supplier and shall notify the supplier accordingly.
27.11 The supplier may decide to lodge claims or take legal measures against
individual buyers without including the Agency, however before doing so the
Agency shall be notified and be given the option to be included in the dispute.

28.0 FORCE MAJEURE

28.1 Neither Supplier nor Purchaser shall be liable for damages or penalties for
any failure or delay in performance of any obligation (except the obligations
to make payment of any money due under this Agreement), where such failure
or delay is caused by force majeure, being any event, occurrence or
circumstance reasonably beyond any control of that party.
28.2 For the purposes of this Agreement Force Majeure shall be limited to failure
or delay caused by or resulting from: -
a) piracy attacks, fires, wars (whether declared or undeclared), riots within
the areas of operation, embargoes, accidents, restrictions imposed by
any governmental authority independent of the Parties (including
allocations, priorities, requisitions, quotas and price controls).
b) acts of God, earthquake, flood, fire or other natural physical disaster,
named storms, hurricanes, typhoons and the like, but excluding other
weather conditions, regardless of severity.
28.3 In the event that a Force Majeure situation exists and this is preventing or
delaying performance of any obligations under this Agreement the Party giving
the notice of the occurrence of force Majeure event shall use reasonable
endeavors to minimize the effect of such Force Majeure and shall provide proof
of efforts taken to minimize the effects of force Majeure in the performance
of the contract. Failure to do so shall preclude the Party from subsequently
claiming that the performance was prevented or delayed by such an
occurrence.
28.4 If either of the Parties is prevented from, or delayed in, performing any of its
obligations under this Agreement by Force Majeure (as defined above) and
which, by the exercise of reasonable diligence, the said Party is unable to
avoid, prevent or provide against, then it must promptly notify the other Party
in writing of the circumstances constituting the Force Majeure ( with
supporting evidence of the occurrence of force majeure event) and of the
obligation the performance of which is thereby prevented or delayed and, to
75
 the extent possible, inform the other party of the expected duration of the
force majeure event. Failure to do so shall preclude the Party from
subsequently claiming that the performance or progress of the Work or any
part thereof was delayed by such an occurrence.
28.5 If either of the Parties is prevented from, or delayed in, performing any of its
obligations under this Agreement by Force Majeure (as defined above), the
time of Supplier to make, or Purchaser to receive, delivery hereunder shall be
extended during any period in which delivery shall be delayed or prevented
by reason of any of the foregoing causes up to a total of ten (10) days. If any
delivery hereunder shall be so delayed or prevented for more than ten (10)
days, either party may terminate this contract with respect to such delivery
upon written notice to the other party.

29.0 WAIVER AND SEVERABILITY OF LIABILITY

29.1 Any waiver or concession that may be granted by a party (ies) hereto in regard
to any of terms and conditions of this Contract shall not in any way affect or
prejudice that party’s rights herein.
29.2 All such waivers or concessions may be withdrawn at any time without prior
notice. No waiver by either party of any breach of this contract shall be
considered as a waiver of any subsequent breach of the same or any provision.

30.0 ASSIGNMENT
30.1 No party shall assign this contract in whole or in part without written consent
to the other party except to an affiliate, however the assignor will remain liable
for the assignee’s full performance.
30.2 AGENCY shall represent/ act for and on behalf of the receivers in any dispute
which shall arise under the importation of petroleum product through the bulk
procurement system provided that the dispute shall involve all receivers
participated in a particular tender. Any claim involving individual receiver or a
group of receivers shall be handled by the respective receivers in person.
30.3 The AGENCY before instituting any legal proceeding shall consult the Solicitor
General. The solicitor General my based on the powers conferred to him under
order 4 (1) of the Office of the Solicitor General (Establishment) order, GN.
No. 50 of 2018 intervene on any legal proceeding instituted or intended to be
instituted by the Agency.

76
31.0 ENTIRE CONTRACT AND DURATION
31.1 This Contract is the entire Agreement between the parties and supersedes all
prior Agreements and understandings whether written or oral.
31.2 This Contract shall not be varied or amended in any way except in writing
signed by representatives of all the parties’ signatories herein. It shall remain
enforceable on the day of its signature by all parties herein, and it shall remain
in force and effect until amended or ended by a written signed by all the
parties’ signatory herein.
31.3 In case of any conflict and or difference between this Contract and any other
document in the bid document, the provisions of this Contract shall prevail.

32.0 COMMUNICATIONS
32.1 All communications shall be deemed having been made on the date on which
they have been sent when using email which shall be the preferred mode of
communication given the number of parties concerned.
32.2 The Supplier shall be required to have a local representative in Tanzania
throughout the duration of the tender.
32.3 Communications to the Supplier shall be sent to the email addresses notified
on the date of award.
32.4 Communications to the Agency shall be sent to the following addresses:

EXECUTIVE DIRECTOR
PETROLEUM BULK PROCUREMENT AGENCY
P.O. Box 2634
Dar es Salaam
Tel. +255 22 2128 885
Fax +255 22 2128 886
[email protected]

33.0 GOVERNING LAW

33.1 This contract shall be construed in accordance with and governed by the laws
of Tanzania.
33.2 The arbitration shall be governed by the International Arbitration Rules
(International Chamber of Commerce – Arbitration and ADR Rules).

77
34.0 GENERAL
34.1 To the extent that the incoterms are not in conflict with the terms of this
Contract, the parties hereby agree to be bound by the DAP Incoterms and
amendments thereof.

35.0 DECLARATIONS
35.1 Parties signatory to this contract declare that, they will adhere to this contract
as well as to The Petroleum Act No. 21 of 2015 and the Petroleum (Bulk
Procurement) Regulation, 2017 (G.N. No. 198 of 2017)
35.2 We, the undersigned, duly authorized by our respective companies, hereby
agree to the provisions of this contract:
IN WITNESS WHEREOF, the authorized representatives of the Parties hereto have
executed these presents in the manner and on the dates hereafter appearing:

SIGNED and SEALED with the common

Seal of PETROLEUM BULK PROCUREMENT AGENCY SEAL
This ………………………….

IN THE PRESENCE OF:

NAME: ………………………….
SIGNATURE: ………………………….
POSTAL ADDRESS: 2634 DAR ES SALAAM
QUALIFICATION: ………………………….

NAME: ………………………...
SIGNATURE: ………………………….
POSTAL ADDRESS: 2634 DAR ES SALAAM
QUALIFICATION: …………………………..

SIGNED and SEALED with the common

Seal of ………………………………..
This ……………………………………. SEAL
IN THE PRESENCE OF:

NAME: ………………………………………
SIGNATURE: ………………………………………
POSTAL ADDRESS: ………………………………………
QUALIFICATION: ………………………………………

78
NAME: ………………………………………
SIGNATURE: ………………………………………
POSTAL ADDRESS: ………………………………………
QUALIFICATION: ………………………………………

ANNEXURE SSC 01.

Counterparty Details
P.O. Box
Dar Es Salaam
Tanzania

Commercial Invoice

Invoice No (Invoice Reference)

Our Ref (Tba)
Position (Tba)
Geneva (Date)
Trade Type Physical
Book Month (Month Of Booking)

Quality
Quantity Bl
Quantity Ship Before Discharge
Conv. Factor Bl
Conv. Factor Disport’
Shipped Via
Delivery
Disport
B/L Date
Cod Date

Unit Price Bl
Unit Price Ship Fig

Premium

Final Unit Price Bl

Final Unit Price Ship Fig

79
Final Amount Bl
Final Amount Ship Fig

Total Amount Due To (Company Name) Usd

ANNEXURE SSC 02.

PROPOSED LETTER OF CREDIT FORMAT

AS PER YOUR REQUEST, PLEASE FIND HERE BELOW OUR LETTER OF CREDIT FORM

27: SEQUENCE OF TOTAL: 1/1

40A: FORM OF DOCUMENTARY CREDIT/ IRREVOCABLE

20: DOCUMENTARY CREDIT NUMBER

31C: DATE OF ISSUE

40E: APPLICABLE RULES / UCP LATEST VERSION

31D: DATE AND PLACE OF EXPIRY

51A: APPLICANT BANK

(INSERT SWIFT CODE)

50: APPLICANT;

59: BENEFICIARY:

32B: CURRENCY CODE, AMOUNT:

39A: PERCENTAGE CREDIT AMOUNT TOLERANCE ON QUANTITY AND VALUE ARE

ACCEPTABLEI: …….

41A: AVAILABLE WITH/BY: CONFIRMING BANK OR ADVISING BANK COUNTERS

80
42P: DEFERRED PAYMENT TERMS: BY DEFERRED PAYMENT 60 CALENDAR DAYS
FROM THE FIRST DAY OF DELIVERY AGREED DELIVERY DATE RANGE (1ST DAY
OF DELIVERY DATE RANGE TO COUNT AS DAY ONE)

43P: PARTIAL SHIPMENTS

NOT ALLOWED

43T: TRANSHIPMENT
ALLOWED
44E: PORT OF LOADING:

44F: PORT OF DISCHARGE:

44B: PLACE OF FINAL DELIVERY /DESTITATION:

45A: DESCRIPTION OF GOODS AND/OR SERVICE:

46A: DOCUMENTS REQUIRED: DOCUMENTS IN ONE ORIGINAL AND ONE

COPY/PHOTOCOPY, UNLESS OTHERWISE STATED:

1. COMMERCIAL INVOICE
2. CERTIFICATE OF ORIGIN (COPY/ FAX COPY ACCEPTABLE)
3. CERTIFICATE OF QUALITY ISSUED ON ARRIVAL AT DISPORT BASED ON
SHIP'S TANK'S COMPOSITE SAMPLE ISSUED BY INDEPENDENT
INSPECTOR AND TBS (COPY/FAX COPY ACCEPTABLE)
4. CERTIFICATE OF QUANTITY ISSUED ON VESSELS ARRIVAL QUANTITY AT
DISPORT ISSUED BY INDEPENDENT INSPECTOR (COPY /FAX COPY
ACCEPTABLE)

IN THE EVENT THE ABOVE MENTIONED DOCUMENTS ARE NOT AVAILABLE AT TIME OF
L/C UTILISATION, THEN PAYMENT IS TO BE MADE AGAINST PRESENTATION OF:

A. SIGNED COMMERCIAL INVOICE (FAX/PDF EMAIL COPY ACCEPTABLE)

AND

B. SELLER'S LETTER OF INDEMNITY ISSUED BY THE BENEFICIARY IN THE

FORMAT BELOW (FAX/PDF EMAIL COPY ACCEPTABLE)

-QUOTE-

FROM :

TO

81
DATE

LETTER OF INDEMNITY

DEAR SIRS,

WE REFER TO A CARGO OF METRIC TONS OF ... ("CARGO") ... SHIPPED ON

BOARD THE TANKER... ("NAME”) ... FOR DELIVERY AT ("DISCHARGE PORT")

ALTHOUGH WE HAVE SOLD AND TRANSFERRED TITLE OF SAID CARGO TO YOU, WE

HAVE BEEN UNABLE TO PROVIDE YOU WITH THE FOLLOWING DOCUMENTS:

1. CERTIFICATE OF ORIGIN (COPY / FAX COPY ACCEPTABLE)

2. CERTIFICATE OF QUANTITY ISSUED ON VESSELS ARRIVAL QUANTITY AT
DISPORT ISSUED BY INDEPENDENT INSPECTOR (COPY /FAX COPY ACCEPTABLE)
3. CERTIFICATE OF QUALITY ISSUED ON ARRIVAL AT DISPORT DISPORT BASED
ON SHIP'S TANK'S COMPOSITE SAMPLE ISSUED BY INDEPENDENT INSPECTOR
AND TBS (COPY / FAX COPY ACCEPTABLE)

('THE DOCUMENTS') COVERING THE SAID SALE

IN CONSIDERATION OF YOUR PAYING THE FULL PURCHASE PRICE OF U.S. DOLLARS

... ("INVOICED AMOUNT") ..., WE HEREBY EXPRESSLY WARRANT THAT WE HAVE GOOD
AND MARKETABLE TITLE TO THE GOODS, AND THAT WE HAVE FULL RIGHT AND
AUTHORITY TO TRANSFER SUCH TITLE TO YOU AND TO EFFECT DELIVERY OF THE
SAID CARGO.

WE FURTHER AGREE TO MAKE ALL REASONABLE EFFORTS TO OBTAIN AND

SURRENDER TO YOU AS SOON AS POSSIBLE THE DOCUMENTS. WE IRREVOCABLY
UNDERTAKE TO PROTECT, INDEMNIFY AND SAVE YOU HARMLESS FROM AND AGAINST
THE DAMAGES, COSTS AND EXPENSES WHICH YOU MAY SUFFER BY REASON OF THE
DOCUMENTS REMAINING OUTSTANDING, OR BREACH OF THE WARRANTIES GIVEN
ABOVE.

OUR OBLIGATION TO INDEMNIFY SHALL BE GOVERNED BY THE SHIPPING AND

SUPPLY CONTRACT BETWEEN OURSELVES AND THE PETROLEUM BULK PROCUREMENT
AGENCY HOWEVER YOU SHALL BE REQUIRED TO GIVE US NOTICE OF
ASSERTION OF ANY CLAIM(S) AND FULL OPPORTUNITY TO
CONDUCT THE DEFENCE THEREOF AND THAT YOU SHALL NOT SETTLE ANY
SUCH CLAIM(S) WITHOUT OUR APPROVAL.

THIS LETTER OF INDEMNITY SHALL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE LAW WHICH GOVERN THE SHIPPING AND SUPPLY
CONTRACT BETWEEN OURSELVES AND PETROLEUM BULK PROCUREMENT AGENCY
(THE LAWS OF TANZANIA). ANY DISPUTES, CONTROVERSIES OR
CLAIMS ARISING OUT OF OR IN RELATION TO THIS LETTER OF INDEMNITY OR
THE BREACH, TERMINATION OR INVALIDITY THEREOF SHALL BE SUBJECT TO
DISPUTE RESOLUTION MECHANISM PROVIDED IN THE SHIPPING AND SUPPLY

82
CONTRACT BETWEEN OURSELVES AND THE PETROLEUM BULK PROCUREMENT
AGENCY.

THIS LETTER OF INDEMNITY SHALL EXPIRE SIX MONTHS AFTER THE ISSUING
DATE OR UPON OUR PRESENTATION OF THE SHIPPING DOCUMENTS TO YOU, OR
UPON RECEIPT AND ACCEPTANCE OF THE PRODUCT WHICHEVER OCCURS FIRST.

... ………. ("COMPANY")

AUTHORISED SIGNATORY/IES

-UNQUOTE-

47A: ADDITIONAL CONDITIONS:

1. BENEFICIARY IS ALLOWED TO INVOICE WITHIN THE OVERALL LC AMOUNT, USD

1.00 PER METRIC TON TO COVER PROVISIONAL DEMURRAGES

2. THIRD PARTY DOCUMENTS ARE ACCEPTABLE, EXCEPT COMMERCIAL INVOICE

AND LETTER OF INDEMNITY.

3. TYPOGRAPHICAL AND/OR SPELLING ERRORS, EXCEPT ON FIGURES AND

AMOUNT, ARE NOT TO BE CONSIDERED AS DISCREPANCIES.

4. IF PAYMENT DUE DATE IS ON A SUNDAY OR A MONDAY BANK HOLIDAY IN

NEW YORK, PAYMENT WILL BE EFFECTED ON THE FOLLOWING BANKING DAY.
IF PAYMENT DUE DATE IS ON A SATURDAY OR A BANK HOLIDAY OTHER THAN
A MONDAY IN NEW YORK, PAYMENT WILL BE EFFECTED ON THE PRECEDING
BANKING DAY PRIOR TO DUE DATE.

5. DOCUMENTS DATED PRIOR TO LC ISSUANCE ARE ACCEPTABLE.

6. DOCUMENTS WITH A DIFFERENT NAME BUT SERVING THE SAME PURPOSES ARE
ACCEPTABLE, EXCEPT SIGNED COMMERCIAL INVOICE AND LETTER OF
INDEMITY.

7. DOCUMENTS UNDER THIS L/C MAY BE DISCOUNTED AT BENEFICIARY'S

REQUEST AND EXPENSE

8. IN CASE OF ANY AMOUNT IN FAVOUR OF THE APPLICANT, SUCH AMOUNT WILL

BE SETTLED WITHIN THE LC

9. DOCUMENTS SHOWING DIFFERENT QUANTITIES OTHER

THAN INVOICE ARE ACCEPTABLE PLUS OR MINUS 5 PERCENT TOLERANCE.

83
 71B: CHARGES FOR ESTABLISHING THE LC ARE FOR THE ACCOUNT OF THE
APPLICANT, LC ADVISING CHARGES, CONFIRMATION CHARGES
AMENDMENT CHARGES, DISCREPANCIES CHARGES AND ANY OTHER
CHARGES (IF ANY) ARE FOR THE ACCOUNT OF THE BENEFICIARY.

48: PERIOD FOR PRESENTATION: DOCUMENTS PRESENTED LATER THAN 21

DAYS AFTER DELIVERY DATE, BUT WITHIN VALIDITY OF THE CREDIT ARE
ACCEPTABLE.

49: CONFIRMATION INSTRUCTION: CONFIRM / ()

53A: REIMBURSING BANK: (REIMBURSING BANK SWIFT CODE)

57A: ADVISE THROUGH' BANK: TO BE ADVISED CASE BY CASE (AS PER PFI)

78: INSTRUCTIONS TO PAYING/ACCEPTING/NEGOTIATING BANK: (TO BE

INSERTED BY THE BANK) ...

UPON RECEIPT OF YOUR DULY AUTHENTICATED SWIFT CONFIRMING

THAT YOU HAVE TAKEN UP COMPLIANT DOCUMENTS WITH L/C TERMS
AND CONDITIONS, WE SHALL COVER YOU ACCORDING TO YOUR
INSTRUCTIONS AT MATURITY DATE.

72: SENDER TO RECEIVER INFORMATION: DOCUMENTS TO BE SENT BY

SPECIAL COURIER TO THE FOLLOWING ADDRESS ;( ISSUING BANK
NAME+ ADDRESS TO BE INSERTED)

UNQUOTE

84
36. APPENDIX 3 SHIPPING AND SUPPLY CONTRACT FOR MOGAS

PETROLEUM BULK PROCUREMENT AGENCY

(PBPA)

SHIPPING AND SUPPLY CONTRACT

FOR

TENDER NO. PBPA/CPP/MOGAS/…../…/……

FOR

SUPPLY OF MOGAS
FOR

THE MONTH OF ………..……..

DELIVERY DATE RANGE

………….. TO ………….

85
 PETROLEUM PRODUCTS BULK PROCUREMENT SYSTEM TANZANIA
SHIPPING AND SUPPLY CONTRACT

This contract is made on this ……………….day of ......................... (Hereinafter referred

to as “the Contract”)
BETWEEN
The PETROLEUM BULK PROCUREMENT AGENCY of P.O Box 2634, Dar es Salaam,
the executive agency established by Government Notice No. 423 OF 2015, having its
registered office at TPA- ONE STOP CENTER BUILDING, 11TH Floor, Plot no. 1/2,
SOKOINE DRIVE, hereinafter referred to as “the AGENCY acting on its own behalf and
on behalf of Oil Marketing Companies, both herein referred to as “OMCs”/
“Purchasers”.
AND
…………………….. Hereinafter referred to as “the Supplier” on the other part
WHEREAS, Purchasers are required by the Petroleum Act No. 21 of 2015, the
Petroleum (Bulk Procurement) Regulations 2017 (GN No 198 of 2017), to import Mogas
through the Bulk Procurement System.
WHEREAS, the AGENCY plays a fundamental role in the operations of this Contract as
coordinator of importation of petroleum product through the use of international
competitive tender system on behalf of the Purchaser.
WHEREAS, each Purchaser signatory to the Shipping and Supply Agreement with the
AGENCY (as specified in R. 5(C) And 17 (2) of The Petroleum (Bulk Procurement)
Regulations 2017 GN. No. 198 Of 2017), Together with ……………………………….(name of
the Supplier) obtained through competitive tendering process administered by the
AGENCY for the considered period, irrevocably agree to abide by the terms of this
contract.
WHEREAS OMCs procuring petroleum product under this agreement shall be (i) licensed
by EWURA and registered by AGENCY (ii) at the time of placing their orders, there is
no default payment on their shares of refined petroleum product from previous contracts.
AND WHEREAS
In consideration of the payment to be made by each Purchaser to the Supplier as
hereinafter mentioned, the Supplier hereby covenants with the AGENCY (on behalf of
the Purchasers) to supply MOGAS and to remedy defects therein in conformity with all
aspects in respect with provisions of the contract.
Each Purchaser as expressed in this contract and the Shipping and Supply Agreement
between the Purchaser and the AGENCY hereby covenants to be bound by this

86
contract and to pay the Supplier in consideration of the supply of MOGAS and the
remedying of defects therein, the contract price or such other sum as may become
payable under the provisions of this contract at the times and in the manner prescribed
by this contract.
The AGENCY confirms that it has collected the procurement requirements of MOGAS
from OMCs, and shall; (i) coordinate invoicing for the respective shares of MOGAS to be
supplied to OMCs by the Supplier; (ii) coordinate diligent receipt by OMCs of MOGAS
from the delivery vessel; (iii) maintain records of delivery and performance and ensure
the product imported meet the prescribed specifications.
NOW THEREFORE IT IS AGREED AS FOLLOWS:
1.0 EFFECTIVE DATE
1.1 This Contract shall take effect on …………………………and shall continue until all
obligations have been completed to be performed or terminated as provided
hereinafter.
2.0 ABBREVIATIONS, DEFINITIONS AND CONSTRUCTION
2.1 The following Abbreviations shall have the meanings provided:

Bbls @60oF Barrels at 60º Fahrenheit

B/L Bill of Lading
BPS Bulk Procurement System
COD Completion of Discharge
CPP Clean Petroleum Product
DAP Delivered at Place (incoterms 2010)
DISPORT Discharge Port
EWURA Energy and Water Utilities Regulatory Authority
FOB Free on Board
ICC International Chamber of Commerce
INCOTERMS International Commercial Terms (Set by International
Chamber of Commerce, U.K)
IFIA International Federation of Inspection Agencies
KOJ Kurasini Oil Jetty
L/C Letter of Credit
LIBOR London Inter-Bank Borrowing Official Rates

87
 MT Metric Tonnage in air
NOR Notice of Readiness
OMC Oil Marketing Company
MOGAS Premium Motor Spirit
SBM Single Buoy Mooring
SHINC Saturdays, Sundays, Holidays included
TASAC Tanzania shipping Agency Corporation
TBS Tanzania Bureau of Standards
TPA Tanzania Ports Authority
TRA Tanzania Revenue Authority
TT Telegraphic Transfer
USD United States Dollar
WMA Weights and Measure Agency

2.2 The following terms shall have the meanings provided:

2.2.1. “Agency” shall mean the Petroleum Bulk Procurement Agency.
2.2.2. “Cargo” shall mean a specific delivery/shipment of refined product of
Industry Import.
2.2.3. “Charter Party Terms” shall mean the terms of the Contract as shall be
agreed between the SUPPLIER and the ship owner for a specific Cargo.
This shall include any form of agreement.
2.2.4. “Cleared Funds” shall mean payments confirmed by Supplier’s Bank as
received either through Electronic Funds Transfers (EFT) or Letter of
Credit.
2.2.5. “Delivery Date Range” shall mean the dates of delivery.
2.2.6. “Demurrage Committee” shall mean the demurrage validation and
verification committee.
2.2.7. “Effective Date” shall mean the date of the execution of the contract.
2.2.8. “Financial hold product” shall mean a product which has not been secured
by purchaser either by way of letter of credit or Electronic Funds Transfers
(EFT).

88
 2.2.9. “Full Cargo” shall mean total tendered parcel size, with operational
tolerance of+/- 5% at Supplier’s option, which will be allocated in full to all
Purchasers prorata based on their placed orders.
2.2.10. “PBPA Marine Surveyor” shall mean Agency Employee assigned to perform
marine operations under the Bulk Procurement System.
2.2.11. “OMC” shall mean an Oil Marketing Company signatory to this Contract as
well as to the Shipping and Supply Agreement who is the Purchaser of
petroleum product subject to this Contract.
2.2.12. “Purchaser” shall mean any person procuring petroleum products through
Bulk Procurement System (BPS).
2.2.13. “Product” Shall mean AGO.
2.2.14. “Replacement cargo” shall mean a different product which is within the
approved specification imported after the initial import has been declared
off spec as provided in this contract.
2.2.15. “Safe berth” shall mean a berth which vessels so conforming, and having
any beam, can at all times safely reach and leave and at which such
vessels can lie at all times safely afloat.
2.2.16. “Supplier” shall mean an entity signatory to this contract and which has
been awarded a tender to supply AGO through BPS.
2.2.17. “Tender” shall mean an invitation to treaty/contract to supply AGO under
the Bulk Procurement System.
2.2.18. “Vessel pre-discharge Meeting” shall mean the meeting chaired by Agency
Marine Inspector and attended by nominated Terminal Representatives
and receivers, whose main agenda is to agree on product discharge
sequence for a particular vessel.

3.0 TRANSIT PRODUCTS PROCURED UNDER BPS

3.1 The OMC shall be a notifying party for the transit cargo and shall inform the
Supplier the consignee(s) on whose name the product shall be manifested and
warehoused under transit, and shall take full responsibility for performance this
agreement. In addition, the Purchasers shall;
a) Place orders /nominate the quantity of product on behalf of the transit
consignees;
b) Eleven (11) days before the birthday of delivery date range the OMC
shall notify the supplier copy PBPA on cargo splits and consignee details.
c) Ensure L/Cs are opened and payments are made and transmitted to the
Supplier within the specified time; and
d) The supplier has the right to perform KYC

89
 35.3 Any payment default by the consignee of the transit cargo shall be treated as
default by the Purchaser that nominated the defaulting consignee.

4.0 DOCUMENTS FORMING PART OF THE CONTRACT

4.1 The following documents shall form, and be construed as part of this Contract:
a) TBS product Specification,
b) Shipping and Supply Agreement between Agency and OMCs,
c) Price, Quantity and delivery Schedule.
d) Bidding documents,
e) LC and Invoice Formats.
f) The Agency’s Notice of Award to Successful Bidder,
g) Supplier Performance Security Bond as per format included in the BPS
Tender Document,
h) Holding and release certificate for product under financial hold,
i) Certified true copy of charter party terms and conditions. The charter
party agreement shall not be tempered with.
j) Bank guarantee from the OMCs
k) Documents submitted by the Supplier during application for
prequalification.
l) Standard Operating Procedure for Petroleum products
receipt/Discharge from the vessel

4.2 The Agency reserves the right to verify the authenticity of the submitted charter
party agreement. In the event that it will be established that the supplier has
submitted forged or tempered charter party agreement the suppliers shall be
penalized in accordance with clause 18.6

5.0 QUANTITY & CARGO NOMINATION

5.1 The quantity to be supplied under this contract shall be a Full Cargo as per
delivery date range in the price, quantity & delivery schedule, prorated to each
Purchaser that has placed orders for product on the delivering vessel.
5.2 Minimum Batch per vessel for each Purchaser shall be 500 MT
5.3 Minimum Batch per receiving terminal shall be 1000 MT
5.4 Minimum order per delivery month shall be 1000 MT
5.5 Supplier is not allowed to deliver Mogas below or above the tolerance (+/-5%).
In the event the vessel has arrived with cargo outside tolerance level the
supplier shall;

90
 (a) Notify the Agency upon Purchasers willingness to purchase
additional quantity. The product should be for transit only
(b) Pay a penalty of USD 5 per MT for under delivered quantity.
(c) Notwithstanding the provision of clause 5.5(a) the supplier shall
be required to pay penalty of USD 5 per MT for the added arrival
quantity.
(d) Compute demurrage by considering the added arrival quantity
(Full cargo).
5.6 The Supplier request to use BPS vessel to load private transit cargo as stipulated
in the price quantity and delivery schedule shall be lodged to the Agency not
later than 15 days before the first day of delivery date range. Any request
lodged out of time shall not be considered.
5.7 Notwithstanding the provision of clause 5.5 of this contract. Acceptance of the
Supplier request to use BPS vessel to carry transit cargo shall be made under
the following conditions.
(a) Premium shall be diluted prorata to the added transit cargo. The
formula for diluting premium is as provided below
Diluted Premium=Tendered Premium X Tendered Quantity
(Tendered Quantity + Additional Quantity)

(b) Demurrage shall be computed by taking into account the added

transit cargo
6.0 DELIVERY TIME, POINT AND DISCHARGE OF PRODUCTS
6.1 The delivery date range as per appendix 1 of the bid document purchased by
the Supplier is to be strictly adhered to. PBPA in consultation with the Supplier
can request change of delivery date range provided that such request is
communicated in writing at least 30 days before the first day of the original
delivery date range or at least 30 days before the first day of the revised delivery
date range whichever comes first. Any request which will be made out of time
will not be considered.
6.2 Full cargo shall be delivered DAP ONE SAFE BERTH ONE SAFE port KOJ1 Dar
es Salaam for Mogas.
6.3 The cost of storing product into nominated terminals which can receive direct
from KOJ1 shall be borne by the individual Purchasers at the rate and terms
agreed between individual Purchasers and terminal owners.
6.4 The vessel delivering Mogas under the BPS must conform to TPA Shipping
standards as well as minimum pressure at vessel discharge Manifold of 8 bars
& Maximum pressure of 12 bars at vessel discharge manifold at KOJ1.
6.5 For any vessel not meeting the minimum specification specified in clause 6.4
above resulting in discharge delays; such additional time incurred due to delays

91
 shall not count as time on demurrage on that particular vessel as well as the
vessels that have already tendered NOR during discharge of poor performing
vessel.

7.0 QUALITY, QUANTITY AND INSPECTION

7.1 Quality of Mogas delivered and discharged pursuant to this contract shall be as
per the specifications provided by TBS included in BPS tender document.
7.2 The quality of each Product delivered under this contract shall be determined
by TBS.
7.3 The Agency shall reject any Mogas that has been confirmed by TBS as not
meeting specifications as per clause 7.1 above.
7.4 Representative samples of the cargo on arrival at discharge port shall be taken
and sealed by the Agency Marine inspector, Supplier Marine Surveyors and TBS
and the same shall be retained by all parties. Each party shall keep records of
the numbered seals and sample reference number.
7.5 The Agency shall retain three sets of sealed samples for at least ninety (90)
days.
7.6 Any product which has not met the approved TBS specification shall not be
offloaded from the delivery vessel.
7.7 In the event of any dispute on quality of the cargo, the sealed representative
samples taken and retained by Supplier marine surveyors, Agency Marine
Inspector and TBS in accordance with clause 7.4 above shall be retested by
TBS or any other laboratory contracted by TBS in the presence of representative
of the Agency, and the Supplier. The results of which shall be the basis of
resolving the dispute. Supplier Marine surveyors shall be allowed to witness
testing of all samples.
7.8 The arrival quantity under this contract shall be determined by WMA. Density
determined by TBS shall provide the basis of determining the arrival quantity.
7.9 In the event of any dispute on arrival quantity, the quantity determined by WMA
shall be final and binding.
7.10 During discharge operations PBPA and Supplier shall;
(a) Take samples on board the vessel, at the jetty head and tanks
of receiving terminals before and after completion of discharge
to receiving terminals. The samples taken are for retention
purposes.
(b) Seal all samples and clear labelled them with the location and
source, the date and time of sampling, a unique reference
number, the sample type, the grade of fuel, the batch number
92
 and a means of identifying who drew the sample. The label shall
be printed and filled in with ink that does not run when exposed
to either water or hydrocarbon.
(c) Records of seals numbers for each retained samples.
(d) Retain samples taken under clause 7.10 (a) for at least ninety
(90) days.
7.11 In the event of any dispute in relation to contamination of product during
discharge, samples taken under clause 7.10 shall be used to determine the
point and cause of contamination.
7.12 Samples taken under clause 7.10 shall be tested at an internationally accredited
laboratory mutually agreed by the Agency, the Purchasers and the Supplier.
7.13 Each vessel shall carry three load port samples for each vessel compartment,
the sample shall be retained by Agency and Supplier Marine Surveyor.

8.0 MANAGEMENT OF DISCHARGE OPERATIONS

8.1 Discharge sequence of Mogas shall be as agreed during pre-discharge meeting.
Any deviation from the agreed discharge sequence shall be approved by the
Agency and the Supplier after consultation with respective receiver.
8.2 Purchasers are required to issue ullage confirmation 2 days before the berthing
date at disport.

9.0 HANDLING OF REJECTED OFF SPEC CARGO AND REPLACEMENT CARGO

9.1 Subject to clauses 7.1, 7.2, and 7.3 above, TBS shall guide the Agency in
accordance with TBS standards and regulations on the way of handling the
rejected off spec Mogas and the Agency shall advice the Supplier accordingly.
9.2 If TBS has confirmed that the imported cargo does not meet Mogas standards
applicable in BPS tenders, the Agency shall reject the cargo and inform the
Supplier to replace the cargo; the replaced cargo must meet required standards
and it shall be authenticated by a new set of shipping documents. The new set
of shipping documents shall be supplied by the Supplier within terms and
conditions of the contract or terms and conditions which will be in place at the
acceptable time of delivery whichever is favorable to the Purchasers.
9.3 Any such replaced Mogas shall be treated as delayed product and shall be
subject to late delivery penalties provided in this contract.
9.4 Purchasers shall be relieved from the late payment penalties accrued on the
rejected cargo. Late payment penalty shall start to accrue upon arrival of the
replaced cargo.

93
 9.5 The Supplier shall be required to refund all money advanced or cancellation of
any confirmed L/C from the Purchaser with compensation for any costs incurred
in establishing the L/C once the cargo is rejected as off spec.
9.6 Subject to clause 9.4 Purchasers shall be required to open and confirm L/Cs as
required by this contract based on the new delivery window to be
communicated by the Agency.
9.7 In the event that the intended replacement cargo does not meet Mogas
standards applicable in BPS tenders, notwithstanding any other rights, the
Agency shall have the right to immediately call for an emergency tender. All
costs and expenses incurred by the Agency in arranging the delivery of a cargo
in replacement of the cargo which is off spec shall be borne by the Supplier
who supplied off spec product.
9.8 Subject to the laws governing the importation of Mogas in Tanzania and terms
of this contract, any Supplier who will deliver Mogas that does not meet the
approved specification, that Supplier shall be penalized as stipulated in the
Petroleum Act.

10.0 PAYMENT TO MARINE SURVEYORS

10.1 In the event the supplier has engaged Marine Surveyor charges for services
rendered at discharge port shall be borne independently by supplier.

11.0 VESSEL NOMINATION

11.1 Supplier shall nominate the Vessel to the Agency 15 days prior to the first day of
delivery window. Consequently, after consultation with TPA, the Agency shall be
required to revert to the Supplier with their acceptance or rejection of the said
nominations within 24 running hours of receipt of nomination from Supplier.

11.2 All vessels delivery product must have Double Hull, meet maximum age limit of
15 years and meet any other requirement issued by TPA.

11.3 The supplier is allowed to substitute the nominated vessel provided that the newly
nominated vessel will undergo the vetting process as stipulated in clause 11.1.
All cost resulting from substitution of vessels Will be on the account of the
suppliers.

11.4 Subject to clause 11.1 no nomination shall be rejected unreasonably and all
rejections must be supported by relevant documentations.

94
12.0 PRICE
12.1 The price of the product DAP KOJ1, Dar es Salaam shall be the Total of FOB
component plus DAP tender premiums as quoted in the Price and Quantity
Schedule of Mogas herein attached to form part of this Contract.

12.2 The FOB component shall be according to the tender called and confirmed by the
Agency, this shall be the arithmetic mean of Platt’s high and low quotations for
dates of pricing as follows:

a) The applicable dates of pricing shall be as started in the Price and

Quantity Schedule of Petroleum product attached to the BPS tender
document which forms part of this Contract,
b) Any revision of delivery window shall not affect the pricing date range
defined in this contract,
c) Supplier agrees to supply (transfer ownership of) the quantity (+/-5%)
per vessel subject to L/C being established by the Purchaser within the
agreed time.
12.3 For Mogas (Premium motor spirit), Platt’s Mediterranean products cargo
assessment under the heading ‘FOB Med (Italy) Premium Unleaded 10ppm’ to
apply.

12.4 Port Handling Charges as well as TASAC and Delivery order charges shall be on
the Supplier’s account and shall be part of the DAP premium.

12.5 Any published correction to any relevant assessment shall be notified to

Purchasers within three (3) working days of the Platt’s correction.

13.0 INVOICING
13.1 Supplier’s final invoices shall be in USD based on FOB Component with applicable
pricing month as per clause 12.2 plus DAP premium as provided in the price and
quantity schedule and ship’s arrival quantity as determined pursuant to clause
13.2.

13.2 Notwithstanding provision of clause 12.1, quantity to be used for invoice

purposes shall be the lower quantity between load port Bill of lading and ship’s
arrival quantity measured at discharge port in Tanzania.

13.3 Final invoice shall contain the breakdown of prices as mentioned in clause 13.1
and 13.2 above, including (a) the detail of all considered quotations, expressed
in their original unit, be in USD/MT or USD/Bbls as the case may be, (b) in
connection with the quantity stipulated, the details of the two computations
below shall be expressly stated in the final invoice to determine the quantity
based on the lower of the load port B/L quantity and the vessel arrival quantity
measures at the DISPORT in Tanzania:

95
 i. for the computation of quantity utilizing the quantity measures
at DISPORT, refer to clause 7.8; and
ii. for the computation of quantity utilizing the quantity measured
at load port, the B/L figures shall apply for the final quantity to
be invoiced and for the conversion factor to be applied for the
conversion of the unit price from USD/Bbls to US/MT.

13.4 The invoice should be as per annexure 01

13.5 All amounts shall be calculated to 4 (four) decimal places.

13.6 Supplier to provide final commercial invoice to the receivers copied to the Agency
within 10 working days from the date of completion of discharge.

13.7 Latest by the fifth (5th) day from the date of completion of discharge or by the
fifth (5th) day from the end of the pricing month, which is later, the Supplier shall
send to the Agency copy to all Purchasers the final unit price of the cargo
detailing:

(a) The quotation used as published by Platts in actual defined units

as per publications (USD/Bbl for Mogas and Jet, USD/MT for
MSP),
(b) The detailed computation of the total cargo quantity to be
invoiced for each of (i) quantities measured as DIPSORT, and (ii)
quantities measured at the load port using the B/L figures.
(c) Related premium and demurrage provision

13.8 The Agency shall revert within three working days to the Supplier with a copy to
all Purchasers to confirm or provide comments on the unit price for the purpose
of the final invoice.

13.9 Supplier shall provide to PBPA table of summary of invoiced quantity per
purchaser latest 10 calendar days from the date the vessel has completed to
discharge. The table shall contain but not limited to name of the purchaser,
premium, FOB price and quantity.

13.10 The supplier shall issue final invoice within fourteen (14) days from the date the
vessel has completed discharge.

13.11 The final price shall be paid within time frame specified in this contract.

13.12 Proforma invoice to be used only for the purpose of opening L/C. Profoma invoice
should not be used in lieu of Final invoice for payment under the Letter of credit.
Only Final invoice shall be used for payment under the letter of credit through
documentary presentation.

96
14.0 PAYMENT AND PENALTY FOR LATE PAYMENT
14.1 Payment through L/C:
a) Purchaser shall latest 5 calendar days before 1st day of delivery date
range or latest 5 calendar days after receipt of the needed documents
from the Supplier provide an irrevocable L/C opened by the Purchaser’s
Bank but confirmed by any Bank as provided by the Supplier. The
Supplier shall provide to the Agency a list of minimum 10 confirming
banks before signing the contract as provided in the Notice of Award.
b) L/C issued by any issuing bank shall be confirmed by any of the 10 listed
banks by the supplier, supplier has a right to reject any issued L/C that
has not been confirmed by the 10 listed banks.
c) The L/C shall be payable at the Supplier’s bank, without offset, deduction
or counter claim and free of all charges latest 60 calendar days from the
first day of delivery window.
d) Charges for establishing the L/C will be borne by the Purchaser.
e) L/C advising charges and confirmation charges shall be borne by the
Supplier.
f) LC’s shall be confirmed within 3 working days from the date the LC has
been issued as long as the purchaser has the acknowledgement from the
confirming bank that the L/C has been received Any cost associated with
delay of LC confirmation shall be on the account of the supplier.
g) All commissions and charges from the issuing bank are for the applicant’s
(buyer’s) account. All commissions and charges from the confirming and
advising bank are for the beneficiary’s (Supplier’s) account.
h) All cost resulting from L/C amendments shall be borne by the party
which caused the amendments to be made. If the L/C amendment will
be caused by factors which are neither caused by the Supplier nor the
Purchaser L/C amendment cost will be shared equally between the
Supplier and the Purchaser.
i) For establishing of L/Cs by the Purchaser, the Supplier shall submit the
PFI and all needed documents to the Purchaser and the Agency latest 10
calendar days before the first day of delivery window. For purpose of this
clause and clause 14.1 and 14.4 of this contract the needed documents
are;
i) copy of Bill of lading
ii) load port certificate of quality
iii) Certificate of origin,

97
 j) In issuing PFI the supplier shall take into account the information
provided by the OMC in paragraph 3.1 (b) above.
14.2 The purchaser shall not be held responsible for any delays in opening the L/Cs if
such delays have been caused by the Supplier’s failure to send the needed
documents (to enable Purchasers to open L/C) within the time bar stated in this
contract. The Purchaser shall immediately upon receipt of the PFI notify the
Supplier and the Agency on the intention to make bank transfer or any alternate
payment as mutually agreed between Supplier and Purchaser

14.3 The Supplier shall notify the Agency on any alternate payment agreement
(including but not limited to bank transfer, pre-payment, fixed payment dates or
credit arrangement etc.) with the Purchaser not later than 5 working days prior
to first day of delivery date range.

14.4 Bank Transfer or pre-payment

a) Any Purchaser who shall prefer to make payments by bank transfer or pre-
payment shall effect payments latest 3 calendar days before 1st day of
delivery date range or latest 5 calendar days upon receipt of proforma
invoice (PFI) from Supplier whichever is later.
b) The Supplier at his discretion may offer discount to bank transfer or pre-
payment done by Purchasers.
c) The purchaser shall not be held responsible for any delays in making bank
transfer or prepayment, if such delays have been caused by the Supplier’s
failure to send the needed documents (to enable Purchasers to make bank
transfer or prepayment) within the time bar stated in this contract.

14.5 Purchaser’s parent / Affiliate companies shall have the option to establish L/C on
behalf of Purchaser.
14.6 Transit parcels shall be paid by the consignees of the said parcels. Purchasers
who placed orders shall make sure that the consignees of transit parcels pay for
their cargoes within stipulated contractual duration. Any penalty resulting from
consignee of transit cargo delays to open LC for the transit parcel shall be on
account of the purchaser.
14.7 L/C and bank transfer or prepayment shall be made against presentation of
Supplier’s commercial invoice and certified copies of shipping documents as listed
in clause 14.8 unless mutually agreed otherwise between Supplier and Purchaser.
14.8 For the purpose of this contract copies of shipping documents shall include:
a) Certificate of origin,
b) Certificate of Quality (COQ) on vessels ship tank composite sample on
arrival at disport issued by TBS,
c) Certificate on vessel’s arrival quantity issued by WMA.

14.9 Supplier must ensure that cargo manifest is lodged to all relevant authorities
including but not limited to the Agency and TASAC with endorsed copy of Bill of
Lading (for customs purposes only) 5 calendar days before the vessel has
tendered NOR. The cargo manifest shall correspond to the PFI and endorsed BL
98
 provided to the Purchasers. Cost of lodging cargo manifest and issuing of Delivery
order shall be borne by the Supplier.

14.10 Any and all costs or charges or penalties resulting from delays in berthing caused
by any Purchaser not having settled or performed the required declarations with
TRA, TASAC and TPA will be solely payable by Purchaser.

14.11 Any and all cost or charges or penalties resulting from delays in lodging of the
cargo manifest caused by the Supplier and where such delays result in the
Purchaser’s delay to make necessary declaration to TRA, TASAC, and TPA will be
solely payable by the Supplier.

14.12 Where there is any default in providing the L/C or making bank transfer or
prepayment on due time, parties shall be guided by the provision of clauses
14.1(g & i),14.4, 14.15 and 14.16,

14.13 Supplier’s vessel shall only carry cargo ordered through the Agency or upon
approval from the Agency as provided in clause 5.6 and 5.7

14.14 Invoices shall be raised for DAP i.e. FOB component plus DAP premiums as
stipulated in this Contract and detailing the price computation (including the
Platts quotes as published, the conversion factor utilized and its computation,
quantity at load port and quantity at DISPORT, supported by documentation
stipulated in clauses 14.8 and 14.9.

14.15 Purchaser who delays to open L/C or make pre-payment as stipulated in this
contract shall be liable to penalties as stipulated in The Petroleum (Bulk
Procurement) Regulations, 2017. This penalty is payable to the Agency for
distortion of Bulk Procurement System.

14.16 Purchaser who fails to pay for its share of a Mogas at the due date as per the
credit period (60 days) shall be charged a late payment penalty of LIBOR +2%
per annum and be barred from participating in the following BPS tender or both,
the payment shall be paid to an escrow account operated by the AGENCY for
onward payment to the Supplier. For the purpose of this clause due date is 60
days after the first day of delivery date range.

14.17 Notwithstanding the provision of clause 14.15 and 14.16, the Purchaser who fails
to pay or open L/C for the ordered product within 5 days after COD and the
product has been discharged as product on financial hold, shall be barred from
participating in BPS until it has fulfilled all pending obligations.

14.18 All third party charges associated with late payment e.g. TRA Taxes and Penalties,
TPA charges and penalties and storage charges, shall be on account of the
defaulting party and will be recovered as per actual prevailing costs.

14.19 In the event of variation on the invoiced amount, the Purchasers shall pay the
remaining unpaid amount within 14 days after the Supplier has issued the final

99
 invoice. Likewise, within 14 days after the Supplier has issued the final invoice,
the Supplier shall refund to the Purchasers any amount over paid.

14.20 Subject to clause 14.1 and 14.4 above the Supplier shall notify the Agency on
payment status for the vessel in the manner prescribed by the Agency.

14.21 In the event that the vessel will not be able to offload her cargo within delivery
date range as a result of vessel congestion or any other reason, the Agency,
Supplier and Purchaser may agree on payment reference dates and credit period.

14.22 LC format shall be as provided in annexure 02

15.0 L/C DELAYED / DEFAULT

15.1 Where there is a default in providing the L/C or making bank transfer or
prepayment on due time, (if such delay and or default is not caused by the
Supplier) then the Supplier in consultation with Agency has the right to dispose
the batch elsewhere. For the purpose of this clause due date shall be five (5)
days before first day of delivery date range or five (5) days after receipt of PFI
and needed documents whichever is later.

15.2 In the event of the late provision of an LC or bank transfer or prepayment by a

particular Purchaser the product shall be discharged into a terminal nominated
by the Supplier as product on financial hold until payment has been done. Storage
cost shall be on the account of the defaulting Purchaser.

15.3 When there are ullage constraints as a result of the Purchaser failure to create
sufficient ullage to receive the ordered product, the purchaser shall nominate the
alternative terminal failure to shall be deemed to have distorted BPS, and shall
attract penalties as prescribed in the Petroleum (Bulk Procurement) Regulations,
2017(For the purpose of this provision penalty shall be 0.5 USD per MT per day)
also shall be liable to pay demurrage for the delay.

15.4 Prior to signing the shipping and supply contract, the Supplier shall inform the
Agency at least three acceptable terminals, which Supplier considers acceptable
at the time, to discharge the product which would be on financial hold

15.5 Where product has been off-loaded as product on financial hold, the product shall
be so offloaded as manifested, however, the Purchaser shall be liable to pay
storage charges at the rate and terms provided by the receiving terminal.

15.6 Where the product has been offloaded on financial hold, the receiving terminal
shall issue a holding certificate to the Supplier with copy to Agency. The Holding
certificate shall state and guarantee that no product will be released without
written confirmation from the Supplier and or its financier. Upon receipt of the
funds or of the L/C the Supplier or its financier shall issue a release certificate to
the terminal with a copy to the Agency.

100
15.7 The Supplier shall not prevent any vessel from berthing due to financial hold.

15.8 Failure to adhere to clause 14.1 and 14.4 above, the Purchaser shall not be
allowed to participate in the next tender until such product has been fully paid to
Supplier including all associated costs with Supplier, Agency and the receiving
terminal.

15.9 The Agency guarantees that costs incurred by the Supplier or any receiving
terminal resulting from the suppliers exercising right to dispose the product as
stipulated in clause 15. 1 shall be settled by cashing the bank guarantee provided
to Agency by the Defaulting Purchaser, without prejudice to the Agency’s rights
and/or Supplier or receiving terminal further claims or damages from the
Purchaser.

15.10 The Agency does not guarantee that the available bank guarantee shall be
sufficient to cover all claims raised by the supplier. In the event that the available
bank guarantee is not sufficient to cover all cost incurred by the supplier
appropriate legal measures shall be taken against the defaulting purchaser.

15.11 Any payment from the cashed bank guarantee shall be made by the Agency to
the Supplier or any terminal upon submission of relevant supporting claim
documents

15.12 In the event that the Purchaser has paid taxes but has not opened L/C the
Supplier shall continue to have rights (including right to dispose the product) over
the product on financial hold until the time when the product has been paid for.

15.13 The Supplier shall, when disposing the product on financial hold take into account
taxes, wharfage and other costs paid by the defaulting Purchaser. The Supplier,
in consultation with the Agency, shall agree on modality to refund taxes,
wharfage and other costs paid by the defaulting Purchaser. The refund thereof
shall be subject to fulfillment of all obligations and liabilities resulting from failure
to open L/C. Failure by Purchaser to fulfill all obligations and liabilities resulting
from failure to open L/C the amount to be refunded shall be used to cover
outstanding obligations.

15.14 The Supplier shall within 10 days after disposal of product on financial hold submit
to the Agency all documents relating to selling of the product in question including
detailed elaboration of the costing for the product this shall include but not limited
to losses, and storage charges. Failure to submit all the needed documents
implies that there was no cost incurred in disposing the product on financial hold.

16.0 DOCUMENTS
16.1 Supplier shall forward to Purchaser and the Agency the following documents not
later than eight (8) calendar days prior to the first day of delivery date range.
a) Copy of bill of lading endorsed with the relevant quantity per Purchaser;
b) Copy of load port Certificates of Quality;
101
 c) Copy of load port Certificates of Quantity.
d) Copy of Certificate of Origin;
e) Copy of load port cargo manifest
f) Valid calibration certificates of;
iii. Ullage Temperature Interface (UTI)
iv. All vessel Tanks
g) Copy of certificate of quality for each vessel tank issued at load port.

16.2 Failure to submit document within three days from BL date the supplier shall be
liable for penalty of 0.5 per MT per day payable to the purchasers.

16.3 Supplier shall forward to Purchasers and the Agency the following documents
prior to discharge:
a) Vessel ullage report issued at disport,
b) Certificate of Quantity at disport,
c) Certificate of Quality on representative Ship’s tank composite sample taken
and sealed on arrival at discharge port.
d) Tank cleanness certificate issued before loading.

16.4 For the purpose of clause 16.2 above, there shall be no discharge of cargo before
receipt of the documents required prior to discharge.

16.5 Upon completion of discharge the Supplier shall within 5 working days from the
date of completion of discharge forward the following documents to the Agency:
a) Copy of Charter Party Agreement or Fixture
b) Statement of facts at Disport,
c) Pumping Log at Disport,
d) Full Inspection Report after completion of discharge,
e) Copy of list of representative ship’s tank composite samples on arrival at
disport retained by Marine Surveyor appointed by the Supplier.
f) Copy of list of representative ship’s tank composite samples on arrival at
disport retained by TBS.
g) Copy of list of load port ship’s tank composite samples

16.6 Where the vessel has been allocated a berthing window and discharge is delayed
due to Supplier’s failure to submit the required documents prior to discharge any
and all such costs incurred on either party shall be borne by the Supplier.

17.0 LAYTIME
17.1 Lay time shall be 36 hours SHINC for a full cargo discharged at KOJ1 Dar es
Salaam, commencing 6 hours from tendering Notice of Readiness or upon vessel
‘All Fast’, whichever is earlier.

17.2 Time lost due to non-berthing of tankers during night time and/or awaiting
daylight, high tide, shall not count as used laytime.

102
18.0 DEMURRAGE
18.1 Supplier shall additionally be entitled to charge demurrage which shall be as
stipulated in the charter party terms and conditions but subject to a maximum of
USD 18, 000 per day pro rata based on actual discharged quantity at KOJ1 Dar
es salaam port, which may be higher but not lower than the tendered volume for
specific cargo for pro rata computation purposes.

18.2 A provision for demurrage of US$ 2 /MT to be covered under the L/C.

18.3 Supplier shall provide demurrage computation to the Agency within seven (7)
working days from the COD date of each cargo. For the purpose of verification,
Supplier shall also be required to avail to the Agency the relevant supporting
documents. Failure to submit the claim within time and to submit necessary
documents will render the claim null and void.

18.4 The Agency through its demurrage committee shall validate the submitted
Demurrage computation and respective supporting documents within fourteen
(14) working days after receipt of the demurrage computation from the Supplier.
Failure to, the demurrage computation submitted by the Supplier shall be
considered as final and binding save for fraud or manifest error

18.5 Computation of demurrage shall be based on the demurrage charges as per the
charter party agreement terms and conditions but subject to a maximum United
States dollar eighteen (USD 18, 000) per day.

18.6 In the event it will be established that the submitted charter party agreement is
not genuine and the shown demurrage cost does not reflect the actual demurrage
charged by the charterer the supplier shall be liable to a penalty of USD 50,000
payable to the Agency.

18.7 The final demurrage cost for that particular vessel shall be prorated to all
Purchasers after excluding demurrage cost which shall be paid by the causative
parties. The Supplier shall issue demurrage invoice to causative parties.
Particulars of the causative parties shall be communicated to the Supplier by the
Agency.

18.8 Based on clause 18.7 above the Supplier shall issue demurrage invoice within
seven (7) calendar days after final cost has been concluded as per clause 18.5.

18.9 Purchaser shall pay prorated final Demurrage cost due within fourteen (14)
calendar days of receipt of invoice from the Supplier. In case of any demurrage
refund, the Supplier shall pay the Purchaser within fourteen (14) calendar days
from date of invoice.

103
18.10 Supplier shall within 30 days from the date of issuing invoice submit to the Agency
a report of demurrage of payment by respective Purchasers’. Failure to it will be
presumed that the Supplier has been fully paid and there is no pending
demurrage claim.

18.11 In the event the provisional demurrage under clause 18.2 above does not suffice
or the relevant Purchaser did not make payment within the time bar as stated in
clause 18.9, the Agency guarantees to pay demurrage by cashing the same from
relevant Purchaser’s bank guarantees or utilizing cash cover latest ninety (90)
days from issuance of the invoice. However, the Agency does not guarantee that
the available bank guarantee shall be sufficient to cover all claims raised by the
supplier. In the event that the available bank guarantee is not sufficient to cover
all cost incurred by the supplier, appropriate legal measures shall be taken against
the defaulting purchaser.

18.12 If the vessel arrives between 18:01 hrs. to 05:59 hrs., NOR tendered shall be
considered at 06:00 am of the next day; and laytime shall apply as per clause 17

18.13 For vessel arriving within the allocated delivery window, time will commence from
the time when the NOR is tendered subject to terms and conditions of this
contract.

18.14 For vessel arriving before the allocated delivery window, time will commence from
06:00 am of the first day of delivery window; and laytime shall apply as per clause
17.

18.15 For vessel arriving after the allocated delivery window, the demurrage will
commence when the vessel is ALL FAST or commenced mooring.

18.16 For vessel arriving after 18:01 hrs. of the last date of the allocated delivery
window shall be viewed as missing delivery date range and the demurrage will
commence when the vessel is ALL FAST or commence mooring.

18.17 Demurrage invoice shall be as provided in annexure 03

19.0 STATEMENT OF ACCOUNTS

19.1 Supplier is obliged to issue statement of accounts to all receivers on monthly
basis. If the supplier will not send the statements of accounts thirty (30) days
after the initial reminder, the Agency and Purchaser shall not be held liable for
any delays to settle the outstanding demurrage.

20.0 HOLDING PAID UP PARCELS AS SECURITY FOR UNPAID UP PARCELS

20.1 The supplier shall not hold paid up parcels as security for un paid parcels in the
same tender or different tenders.

20.2 For the purpose of this contracts parcels in the same tender shall be considered
as separate parcels based on the below circumstances
104
 (a) Transit parcels
(b) Separate PFI have being issued

21.0 TITLE AND RISK

21.1 Tittle to the product shall pass to the buyer from the seller upon establishment
of the L/C or pre-payment by the buyer.

21.2 Risk to the product (including product on financial hold) shall pass from the
Supplier to the individual Purchaser as the product passes the vessel’s permanent
flange at disport KOJ1 Dar Es Salaam.

21.3 As a separate and independent condition Purchasers agree that unless and until
the full purchase price is tendered, the product shall be the Supplier’s product

21.4 Until delivery and discharge of the product the Supplier shall insure the product
against all risk to full replacement value and shall not re-sell, use or part with
possession with them.

22.0 TERMINATIONS
22.1 Without prejudice to any other remedy for breach of this Contract, or by written
notice of default sent to the concerned party, this Contract shall be terminated
by either party upon the occurrence of any of the following:
a) If the other party causes a fundamental breach of the Contract,
fundamental breach of Contract shall include, but shall not be limited to
the following:
i. The Supplier fails to deliver Mogas within the period(s) specified
in the contract, or within any extension thereof granted by the
Agency, or
ii. The Supplier fails to perform any other obligation(s) which affect
security of supply under the Contract, or
iii. The Supplier has decided to unilaterally repudiate the Contract, or
iv. The Supplier has been convicted of having engaged in corrupt or
fraudulent practices in competing for or in executing the Contract,
or
b) Upon dissolution, bankruptcy, insolvency, or appointment of a receiver,
liquidator, or trustee in bankruptcy for that party.
c) Written notice to a party that a law has been introduced or amended by
an Act of Parliament so that it is unlawful for that party to operate or
perform its duties and obligations under this Contract or realize the
benefits of this Contract.
105
22.2 Notice of termination under this Contract shall not discharge or relieve the
withdrawing party of any rights, duties, obligations or liabilities arising prior to
such termination, nor prejudice any rights or remedy accruing before, at or in
consequence of such termination, or any proceeding with respect to any such
right or remedy including any proceedings by way of arbitration provided for
hereunder.

22.3 In the event the Agency terminates the Contract pursuant to this clause, the
Agency shall make necessary arrangement in such manner as it deems
appropriate, to supply petroleum products similar to the undelivered cargo, and
the terminated Supplier shall be liable to the Agency for actual costs for such
similar petroleum product as well as penalties as stipulated in this contract.

23.0 LATE DELIVERY

23.1 Late delivery default arising from causes other than a force majeure event shall
attract a late delivery penalty of US$ 0.5 per metric ton per day to be paid by a
Supplier to the Agency in order to compensate buyers for compromising their
minimum stocks or for compelling them to procure Mogas from other sources.

23.2 For this purpose, late delivery penalty shall accrue from the first day after the
allocated delivery date range until the vessel arrives.

23.3 Supplier shall make payment for late delivery to the Agency within thirty (30)
days from COD and the Agency shall make the payment to the purchaser fifteen
(15) days after receipt of the funds from the supplier.

23.4 Penalty prescribed in clause 22.1 and 22.2 shall be paid to an escrow account
operated by the Agency for onward payment to the purchaser within thirty days
from the date of signing a settlement deed/minutes with the Agency.

23.5 Until such payment is affected in full and receipt of monies confirmed by
Purchasers the Supplier shall not participate in any of the tenders for the supply
of Mogas as under the BPS until confirmation of full payment.

23.6 Notwithstanding the provisions of clause 23.1 the lay-time on late arriving vessel
shall commence when the vessel berths.

23.7 Demurrage costs resulting from cascading effect caused by late delivery of the
BPS vessel shall be borne by the Supplier of the late delivery vessel.

23.8 For purpose of this contract, the cascading effect shall be limited to a maximum
of three subsequent vessels which have to discharge Mogas after the late delivery
vessel.

23.9 For purposes of ensuring efficient and effective BPS, the Agency shall take
necessary measures to minimize cascading effects.

106
23.10 Priority on berthing for discharge shall be given to CPP vessels that shall arrive
within the contracted delivery date range.

23.11 Any vessel arriving after the last date of the allocated delivery date range shall
berth and discharge if at all she will not interfere with the next vessel. Otherwise
she shall to wait on queue until when there is a window for berthing to discharge.

23.12 AGENCY reserves the right to allow priority berthing in consultation with other
government authorities for national interest.

24.0 DELIVERY DEFAULT

24.1 Delivery default shall be deemed to have occurred if vessel does not arrive and
Tender Notice of Readiness to discharge at Dar es salaam within seven (7)
consecutive calendar days after the last day of the delivery date range, in which
case the Purchaser shall be relieved of its obligation to buy the cargo and the
Agency reserves the right to encash the Supplier’s Performance Security Bond.

24.2 The Supplier can demonstrate that there is a planned delivery by providing copies
of the undermentioned documents to the Agency on the first day of delivery date
range:
a) Bill of Lading,
b) Certificate of quality and quantity,
c) Vessel NOR at the load port, and
d) Load port statement of facts.

Provided that submission of the above required documents shall not relieve the
Supplier to pay late delivery penalty.

24.3 In the event that Supplier cannot provide the required documents as per clause
24.2 above to the Agency, the Agency may call an emergency tender to substitute
the defaulted cargo. The Supplier shall be considered to have distorted BPS and
shall be liable to the fines and penalties as provided by the laws governing
importation of Mogas in Tanzania through Bulk procurement system.

24.4 In addition to penalties provided in clause 24.3 the defaulting Supplier shall be
barred from participating in Petroleum Bulk Procurement System as Supplier for
three (3) consecutive tenders.

24.5 In addition, the Supplier shall be responsible for all direct cost associated with
product delivery outside the allocated delivery date range. For purpose of
clarification direct cost shall mean extra freight and premium for an emergency
cargo.

107
25.0 PERFORMANCE SECURITY BOND
25.1 Within nine (9) calendar days after receipt of the Notice of Award from the
Agency, the Supplier shall issue a Performance Security Bond in the form of a
bank guarantee as per format specified by the Agency in the tender documents
and which shall be valid for the whole duration of the Contract period.

25.2 Failure to comply with the requirement to provide Performance Security Bond as
stated in Clause 25.1 above, shall constitute sufficient grounds for withdrawing
the Notice of Award and forfeiture of the bid bond in which case the Agency may
call for an emergency tender or award the tender to the second lowest responsive
bidder.

25.3 It is the responsibility of the Supplier to make sure that the performance bond is
valid throughout the contractual period. For the purpose of this clause contractual
period means the whole duration when there are pending obligations to be
performed by the Supplier.

25.4 If at the time when the Supplier’s performance bond is supposed to be cashed it
is established that the same has expired, the Supplier shall be required to make
payment by way of bank transfer within five (5) calendar days to be computed
from the date on which the performance security bond was supposed to be
cashed.

25.5 If the supplier has refused to submit the performance bond as required by clause
25.1 the Agency has the right to use existing valid performance bond issued by
the supplier for any other tender to cover cost associated with this contract

25.6 Performance bond issued in relation to this contract can be used to cover cost
related to the supplier’s performance in other contracts.

26.0 GENERAL PENALTY FOR NON-PERFORMANCE

26.1 Notwithstanding any provision of this contract the Supplier or Purchaser shall not
be allowed to participate in the next tender, if there are pending obligations
resulting from this tender or previous tender, provided that a proper notice has
been issued asking the supplier or purchaser to fulfill the contractual obligation
and has not acted based on the issued notice.

26.2 The supplier or purchaser shall be allowed to participate in the next tender upon
fulfillment of the contractual obligations.

27.0 DISPUTE RESOLUTIONS

27.1 Notwithstanding any dispute the Supplier shall be required to continue without
delay to supply products in accordance with the terms of this agreement.

108
27.2 If at any time during the continuance of this Contract any dispute, difference or
question relating to the construction, meaning or effect of this Contract or
of any of the clauses herein shall arise between the parties, then the aggrieved
or affected party shall give written notice of not less than 72 hours to the other
party of such dispute, difference or questions.

27.3 Parties shall be required to settle their dispute amicably within fifteen (15) days
of the occurrence or commencement of the amicable dispute resolution, if the
parties fail to settle the dispute amicably parties shall refer the disputes for
arbitration.

27.4 If parties fail to settle the dispute amicably, such dispute shall be referred to
arbitration within ninety (90) days from the date it has been established that
parties have failed to resolve the dispute amicably.

27.5 The arbitration shall be resolved with its seat in Dar es Salaam Tanzania or any
other place mutually agreed by both parties conducted in English language by
three arbitrators pursuant to the rules of the ICC unless the parties agree
otherwise.

27.6 Where a dispute between the Parties is solely of a technical nature, the Parties
shall have the option of referring such dispute to an Expert in accordance with
Clause 27.7 below.

27.7 If either Party gives notice in writing to the other of its intention to refer a dispute
to an Expert for determination, the following shall apply:
a) Parties shall seek to mutually agree in good faith on the appointment of
such Expert. The Expert shall be an appropriately qualified and experienced
professional who is knowledgeable regarding the international Mogas
industry and is technically competent in the area of the subject of the
dispute to act as the Expert; and

b) Failing agreement by the Parties regarding the appointment of the

Expert within fourteen (14) days of the above notice, the matter
shall be refereed to full process for the matter to be referred to
arbitration

c) If the appointment of an Expert is agreed by the Parties:

i. the Parties shall provide their submissions and supporting
information with respect to the dispute to the Expert within
fourteen (14) days of the date of the appointment of the
Expert;
ii. the Expert shall resolve or settle such dispute taking due and
proper account of the submissions of the Parties and shall
render his decision in respect thereof within twenty-eight (28)
days following the date of the appointment of the Expert;
109
 iii. the Expert shall be given all reasonable access to the
relevant documents and information relating to the dispute,
and access to the Delivery Point and sampling, weighing,
measurements and other data as the Expert shall reasonably
require;

27.8 Any decision of the Expert shall be final and binding on the Parties except in the
case of fraud or manifest error, in which case such alleged fraud or manifest error
by the Expert shall be dealt with in accordance with the law of United republic of
Tanzania.

27.9 The costs of the Expert in settling or determining a dispute shall be borne by the
losing Party unless the Expert determines otherwise.

27.10 The Agency shall lodge claims and take legal measures against the supplier on
behalf of buyers, however on special circumstances the Agency may allow buyers
to personally lodge claims or take legal measures against the supplier and shall
notify the supplier accordingly.

27.11 The supplier may decide to lodge claims or take legal measures against individual
buyers without including the Agency, however before doing so the Agency shall
be notified and be given the option to be included in the contract.

28.0 FORCE MAJEURE

28.1 Neither Supplier nor Purchaser shall be liable for damages or penalties for any
failure or delay in performance of any obligation (except the obligations to make
payment of any money due under this Agreement), where such failure or delay
is caused by force majeure, being any event, occurrence or circumstance
reasonably beyond any control of that party.

28.2 For the purposes of this Agreement Force Majeure shall be limited to failure or
delay caused by or resulting from: -
a) piracy attacks, fires, wars (whether declared or undeclared), riots within
the areas of operation, embargoes, accidents, restrictions imposed by
any governmental authority independent of the Parties (including
allocations, priorities, requisitions, quotas and price controls).
b) acts of God, earthquake, flood, fire or other natural physical disaster,
named storms, hurricanes, typhoons and the like, but excluding other
weather conditions, regardless of severity.
28.3 In the event that a Force Majeure situation exists and this is preventing or
delaying performance of any obligations under this Agreement the Party giving
the notice of the occurrence of force Majeure event shall use reasonable
endeavors to minimize the effect of such Force Majeure and shall provide proof
110
 of efforts taken to minimize the effects of force Majeure in the performance of
the contract. Failure to do so shall preclude the Party from subsequently claiming
that the performance was prevented or delayed by such an occurrence.

28.4 If either of the Parties is prevented from, or delayed in, performing any of its
obligations under this Agreement by Force Majeure (as defined above) and
which, by the exercise of reasonable diligence, the said Party is unable to avoid,
prevent or provide against, then it must promptly notify the other Party in writing
of the circumstances constituting the Force Majeure ( with supporting evidence
of the occurrence of force majeure event) and of the obligation the performance
of which is thereby prevented or delayed and, to the extent possible, inform the
other party of the expected duration of the force majeure event. Failure to do
so shall preclude the Party from subsequently claiming that the performance or
progress of the Work or any part thereof was delayed by such an occurrence.

28.5 If either of the Parties is prevented from, or delayed in, performing any of its
obligations under this Agreement by Force Majeure (as defined above), the time
of Supplier to make, or Purchaser to receive, delivery hereunder shall be extended
during any period in which delivery shall be delayed or prevented by reason of
any of the foregoing causes up to a total of ten (10) days. If any delivery
hereunder shall be so delayed or prevented for more than ten (10) days, either
party may terminate this contract with respect to such delivery upon written
notice to the other party.

29.0 WAIVER AND SEVERABILITY OF LIABILITY

29.1 Any waiver or concession that may be granted by a party (ies) hereto in regard
to any of terms and conditions of this Contract shall not in any way affect or
prejudice that party’s rights herein.
29.2 All such waivers or concessions may be withdrawn at any time without prior
notice. No waiver by either party of any breach of this contract shall be
considered as a waiver of any subsequent breach of the same or any provision.

30.0 ASSIGNMENT
30.1 No party shall assign this contract in whole or in part without written consent to
the other party except to an affiliate, however the assignor will remain liable for
the assignee’s full performance.

30.2 AGENCY shall represent/ act for and on behalf of the receivers in any dispute
which shall arise under the importation of petroleum product through the bulk
procurement system provided that the dispute shall involve all receivers
participated in a particular tender. Any claim involving individual receiver or a
group of receivers shall be handled by the respective receivers in person.

30.3 The AGENCY before instituting any legal proceeding shall consult the Solicitor
General. The solicitor General my based on the powers conferred to him under
order 4 (1) of the Office of the Solicitor General (Establishment) order, GN. No.
111
 50 of 2018 intervene on any legal proceeding instituted or intended to be
instituted by the Agency.

31.0 ENTIRE CONTRACT AND DURATION

31.1 This Contract is the entire Agreement between the parties and supersedes all
prior Agreements and understandings whether written or oral.

31.2 This Contract shall not be varied or amended in any way except in writing signed
by representatives of all the parties’ signatories herein. It shall remain
enforceable on the day of its signature by all parties herein, and it shall remain
in force and effect until amended or ended by a written signed by all the parties’
signatory herein.

31.3 In case of any conflict and or difference between this Contract and any other
document in the bid document, the provisions of this Contract shall prevail.

32.0 COMMUNICATIONS
32.1 All communications shall be deemed having been made on the date on which
they have been sent when using email which shall be the preferred mode of
communication given the number of parties concerned.

32.2 The Supplier shall be required to have a local representative in Tanzania

throughout the duration of the tender.

32.3 Communications to the Supplier shall be sent to the email addresses notified on
the date of award.

32.4 Communications to the Agency shall be sent to the following addresses:

EXECUTIVE DIRECTOR
PETROLEUM BULK PROCUREMENT AGENCY
P.O. Box 2634
Dar es Salaam
Tel. +255 22 2128 885
Fax +255 22 2128 886
[email protected]

33.0 GOVERNING LAW

33.1 This contract shall be construed in accordance with and governed by the laws of
Tanzania.

33.2 The arbitration shall be governed by the International Arbitration Rules

(International Chamber of Commerce – Arbitration and ADR Rules).

112
34.0 GENERAL
34.1 To the extent that the incoterms are not in conflict with the terms of this Contract,
the parties hereby agree to be bound by the DAP Incoterms and amendments
thereof.

35.0 DECLARATIONS
35.1 Parties signatory to this contract declare that, they will adhere to this contract as
well as to The Petroleum Act No. 21 of 2015 and the Petroleum (Bulk
Procurement) Regulation, 2017 (G.N. No. 198 of 2017)

35.2 We, the undersigned, duly authorized by our respective companies, hereby agree
to the provisions of this contract:

IN WITNESS WHEREOF, the authorized representatives of the Parties hereto have

executed these presents in the manner and on the dates hereafter appearing:

SIGNED and SEALED with the common

Seal of PETROLEUM BULK PROCUREMENT AGENCY
This …………………………. SEAL

IN THE PRESENCE OF:

NAME: ………………………….
SIGNATURE: ………………………….
POSTAL ADDRESS: 2634 DAR ES SALAAM
QUALIFICATION: ………………………….

NAME: ………………………...
SIGNATURE: ………………………….
POSTAL ADDRESS: 2634 DAR ES SALAAM
QUALIFICATION: …………………………..

SIGNED and SEALED with the common

Seal of ………………………………..
This ………………………….
SEAL
IN THE PRESENCE OF:

NAME: ………………………………………
SIGNATURE: ………………………………………
POSTAL ADDRESS: ………………………………………
113
QUALIFICATION: ………………………………………

NAME: ………………………………………
SIGNATURE: ………………………………………
POSTAL ADDRESS: ………………………………………
QUALIFICATION: ………………………………………

ANNEXURE SSC 01.

Counterparty Details
P.O. Box
Dar Es Salaam
Tanzania

Commercial Invoice

Invoice No (Invoice Reference)

Our Ref (Tba)
Position (Tba)
Geneva (Date)
Trade Type Physical
Book Month (Month Of Booking)

Quality
Quantity Bl
Quantity Ship Before
Discharge
Conv Factor Bl
Conv Factor Disport’
Shipped Via
Delivery
Disport
B/L Date
Cod Date

Unit Price Bl
Unit Price Ship Fig

Premium

Final Unit Price Bl

114
Final Unit Price Ship
Fig

Final Amount Bl
Final Amount Ship Fig

Total Amount Due To (Company Name) Usd

ANNEXURE SSC 02.

PROPOSED LETTER OF CREDIT FORMAT

AS PER YOUR REQUEST, PLEASE FIND HERE BELOW OUR LETTER OF CREDIT FORM

27: SEQUENCE OF TOTAL: 1/1

40A: FORM OF DOCUMENTARY CREDIT/ IRREVOCABLE

20: DOCUMENTARY CREDIT NUMBER

31C: DATE OF ISSUE

40E: APPLICABLE RULES / UCP LATEST VERSION

31D: DATE AND PLACE OF EXPIRY

51A: APPLICANT BANK

(INSERT SWIFT CODE)

50: APPLICANT;

59: BENEFICIARY:

32B: CURRENCY CODE, AMOUNT:

39A: PERCENTAGE CREDIT AMOUNT TOLERANCE ON QUANTITY AND VALUE ARE

ACCEPTABLEI: …….

115
41A: AVAILABLE WITH/BY: CONFIRMING BANK OR ADVISING BANK COUNTERS

42P: DEFERRED PAYMENT TERMS: BY DEFERRED PAYMENT 60 CALENDAR DAYS

FROM THE FIRST DAY OF DELIVERY AGREED DELIVERY DATE RANGE (1ST DAY
OF DELIVERY DATE RANGE TO COUNT AS DAY ONE)

43P: PARTIAL SHIPMENTS

NOT ALLOWED

43T: TRANSHIPMENT
ALLOWED
44E: PORT OF LOADING:

44F: PORT OF DISCHARGE:

44B: PLACE OF FINAL DELIVERY /DESTITATION:

45A: DESCRIPTION OF GOODS AND/OR SERVICE:

46A: DOCUMENTS REQUIRED: DOCUMENTS IN ONE ORIGINAL AND ONE

COPY/PHOTOCOPY, UNLESS OTHERWISE STATED:

1. COMMERCIAL INVOICE
2. CERTIFICATE OF ORIGIN (COPY/ FAX COPY ACCEPTABLE)
3. CERTIFICATE OF QUALITY ISSUED ON ARRIVAL AT DISPORT BASED ON
SHIP'S TANK'S COMPOSITE SAMPLE ISSUED BY INDEPENDENT
INSPECTOR AND TBS (COPY/FAX COPY ACCEPTABLE)
4. CERTIFICATE OF QUANTITY ISSUED ON VESSELS ARRIVAL QUANTITY AT
DISPORT ISSUED BY INDEPENDENT INSPECTOR (COPY /FAX COPY
ACCEPTABLE)

IN THE EVENT THE ABOVE MENTIONED DOCUMENTS ARE NOT AVAILABLE AT TIME OF
L/C UTILISATION, THEN PAYMENT IS TO BE MADE AGAINST PRESENTATION OF:

A. SIGNED COMMERCIAL INVOICE (FAX/PDF EMAIL COPY ACCEPTABLE)

AND

B. SELLER'S LETTER OF INDEMNITY ISSUED BY THE BENEFICIARY IN THE

FORMAT BELOW (FAX/PDF EMAIL COPY ACCEPTABLE)

-QUOTE-

FROM :

116
TO

DATE

LETTER OF INDEMNITY

DEAR SIRS,

WE REFER TO A CARGO OF METRIC TONS OF ... ("CARGO") ... SHIPPED ON

BOARD THE TANKER... ("NAME”) ... FOR DELIVERY AT ("DISCHARGE PORT")

ALTHOUGH WE HAVE SOLD AND TRANSFERRED TITLE OF SAID CARGO TO YOU, WE

HAVE BEEN UNABLE TO PROVIDE YOU WITH THE FOLLOWING DOCUMENTS:

1. CERTIFICATE OF ORIGIN (COPY / FAX COPY ACCEPTABLE)

2. CERTIFICATE OF QUANTITY ISSUED ON VESSELS ARRIVAL QUANTITY AT
DISPORT ISSUED BY INDEPENDENT INSPECTOR (COPY /FAX COPY ACCEPTABLE)
3. CERTIFICATE OF QUALITY ISSUED ON ARRIVAL AT DISPORT DISPORT BASED
ON SHIP'S TANK'S COMPOSITE SAMPLE ISSUED BY INDEPENDENT INSPECTOR
AND TBS (COPY / FAX COPY ACCEPTABLE)

('THE DOCUMENTS') COVERING THE SAID SALE

IN CONSIDERATION OF YOUR PAYING THE FULL PURCHASE PRICE OF U.S. DOLLARS

... ("INVOICED AMOUNT") ..., WE HEREBY EXPRESSLY WARRANT THAT WE HAVE GOOD
AND MARKETABLE TITLE TO THE GOODS, AND THAT WE HAVE FULL RIGHT AND
AUTHORITY TO TRANSFER SUCH TITLE TO YOU AND TO EFFECT DELIVERY OF THE
SAID CARGO.

WE FURTHER AGREE TO MAKE ALL REASONABLE EFFORTS TO OBTAIN AND

SURRENDER TO YOU AS SOON AS POSSIBLE THE DOCUMENTS. WE IRREVOCABLY
UNDERTAKE TO PROTECT, INDEMNIFY AND SAVE YOU HARMLESS FROM AND AGAINST
THE DAMAGES, COSTS AND EXPENSES WHICH YOU MAY SUFFER BY REASON OF THE
DOCUMENTS REMAINING OUTSTANDING, OR BREACH OF THE WARRANTIES GIVEN
ABOVE.

OUR OBLIGATION TO INDEMNIFY SHALL BE GOVERNED BY THE SHIPPING AND

SUPPLY CONTRACT BETWEEN OURSELVES AND THE PETROLEUM BULK PROCUREMENT
AGENCY HOWEVER YOU SHALL BE REQUIRED TO GIVE US NOTICE OF
ASSERTION OF ANY CLAIM(S) AND FULL OPPORTUNITY TO
CONDUCT THE DEFENCE THEREOF AND THAT YOU SHALL NOT SETTLE ANY
SUCH CLAIM(S) WITHOUT OUR APPROVAL.

THIS LETTER OF INDEMNITY SHALL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE LAW WHICH GOVERN THE SHIPPING AND SUPPLY
CONTRACT BETWEEN OURSELVES AND PETROLEUM BULK PROCUREMENT AGENCY
(THE LAWS OF TANZANIA). ANY DISPUTES, CONTROVERSIES OR

117
CLAIMS ARISING OUT OF OR IN RELATION TO THIS LETTER OF INDEMNITY OR
THE BREACH, TERMINATION OR INVALIDITY THEREOF SHALL BE SUBJECT TO
DISPUTE RESOLUTION MECHANISM PROVIDED IN THE SHIPPING AND SUPPLY
CONTRACT BETWEEN OURSELVES AND THE PETROLEUM BULK PROCUREMENT
AGENCY.

THIS LETTER OF INDEMNITY SHALL EXPIRE SIX MONTHS AFTER THE ISSUING
DATE OR UPON OUR PRESENTATION OF THE SHIPPING DOCUMENTS TO YOU, OR
UPON RECEIPT AND ACCEPTANCE OF THE PRODUCT WHICHEVER OCCURS FIRST.

... ………. ("COMPANY")

...
AUTHORISED SIGNATORY/IES

-UNQUOTE-

47A: ADDITIONAL CONDITIONS:

1. BENEFICIARY IS ALLOWED TO INVOICE WITHIN THE OVERALL LC AMOUNT, USD

1.00 PER METRIC TON TO COVER PROVISIONAL DEMURRAGES

2. THIRD PARTY DOCUMENTS ARE ACCEPTABLE, EXCEPT COMMERCIAL INVOICE

AND LETTER OF INDEMNITY.

3. TYPOGRAPHICAL AND/OR SPELLING ERRORS, EXCEPT ON FIGURES AND

AMOUNT, ARE NOT TO BE CONSIDERED AS DISCREPANCIES.

4. IF PAYMENT DUE DATE IS ON A SUNDAY OR A MONDAY BANK HOLIDAY IN

NEW YORK, PAYMENT WILL BE EFFECTED ON THE FOLLOWING BANKING DAY.
IF PAYMENT DUE DATE IS ON A SATURDAY OR A BANK HOLIDAY OTHER THAN
A MONDAY IN NEW YORK, PAYMENT WILL BE EFFECTED ON THE PRECEDING
BANKING DAY PRIOR TO DUE DATE.

5. DOCUMENTS DATED PRIOR TO LC ISSUANCE ARE ACCEPTABLE.

6. DOCUMENTS WITH A DIFFERENT NAME BUT SERVING THE SAME PURPOSES ARE
ACCEPTABLE, EXCEPT SIGNED COMMERCIAL INVOICE AND LETTER OF
INDEMITY.

7. DOCUMENTS UNDER THIS L/C MAY BE DISCOUNTED AT BENEFICIARY'S

REQUEST AND EXPENSE

8. IN CASE OF ANY AMOUNT IN FAVOUR OF THE APPLICANT, SUCH AMOUNT WILL

BE SETTLED WITHIN THE LC

9. DOCUMENTS SHOWING DIFFERENT QUANTITIES OTHER

THAN INVOICE ARE ACCEPTABLE PLUS OR MINUS 5 PERCENT TOLERANCE.

118
 71B: CHARGES FOR ESTABLISHING THE LC ARE FOR THE ACCOUNT OF THE
APPLICANT, LC ADVISING CHARGES, CONFIRMATION CHARGES
AMENDMENT CHARGES, DISCREPANCIES CHARGES AND ANY OTHER
CHARGES (IF ANY) ARE FOR THE ACCOUNT OF THE BENEFICIARY.

48: PERIOD FOR PRESENTATION: DOCUMENTS PRESENTED LATER THAN 21

DAYS AFTER DELIVERY DATE, BUT WITHIN VALIDITY OF THE CREDIT ARE
ACCEPTABLE.

49: CONFIRMATION INSTRUCTION: CONFIRM / ()

53A: REIMBURSING BANK: (REIMBURSING BANK SWIFT CODE)

57A: ADVISE THROUGH' BANK: TO BE ADVISED CASE BY CASE (AS PER PFI)

78: INSTRUCTIONS TO PAYING/ACCEPTING/NEGOTIATING BANK: (TO BE

INSERTED BY THE BANK) ...

UPON RECEIPT OF YOUR DULY AUTHENTICATED SWIFT CONFIRMING

THAT YOU HAVE TAKEN UP COMPLIANT DOCUMENTS WITH L/C TERMS
AND CONDITIONS, WE SHALL COVER YOU ACCORDING TO YOUR
INSTRUCTIONS AT MATURITY DATE.

72: SENDER TO RECEIVER INFORMATION: DOCUMENTS TO BE SENT BY

SPECIAL COURIER TO THE FOLLOWING ADDRESS ;( ISSUING BANK
NAME+ ADDRESS TO BE INSERTED)

UNQUOTE

119
37. APPENDIX 4 SHIPPING AND SUPPLY CONTRACT FOR JET A1 AND
KEROSENE

PETROLEUM BULK PROCUREMENT AGENCY

(PBPA)

SHIPPING AND SUPPLY CONTRACT

FOR

TENDER NO. PBPA/CPP/JET A-1 & IK/…../…/……

FOR

SUPPLY OF JET A-1 & IK

FOR

THE MONTH OF ………..……..

DELIVERY DATE RANGE

………….. TO ………….

120
PETROLEUM PRODUCTS BULK PROCUREMENT SYSTEM TANZANIA

SHIPPING AND SUPPLY CONTRACT

This contract is made on this ……………….day of ......................... (Hereinafter referred

to as “the Contract”)
BETWEEN
The PETROLEUM BULK PROCUREMENT AGENCY of P.O Box 2634, Dar es Salaam,
the executive agency established by Government Notice No. 423 OF 2015, having its
registered office at TPA- ONE STOP CENTER BUILDING, 11TH Floor, Plot no. 1/2,
SOKOINE DRIVE, hereinafter referred to as “the AGENCY acting on its own behalf and
on behalf of Oil Marketing Companies, both herein referred to as “OMCs”/
“Purchasers”.
AND
…………………….. Hereinafter referred to as “the Supplier” on the other part
WHEREAS, Purchasers are required by the Petroleum Act No. 21 of 2015, the
Petroleum (Bulk Procurement) Regulations 2017 (GN No 198 of 2017), to import JET A-
1 & IK through the Bulk Procurement System.
WHEREAS, the AGENCY plays a fundamental role in the operations of this Contract as
coordinator of importation of petroleum product through the use of international
competitive tender system on behalf of the Purchaser.
WHEREAS, each Purchaser signatory to the Shipping and Supply Agreement with the
AGENCY (as specified in R. 5(C) And 17 (2) of The Petroleum (Bulk Procurement)
Regulations 2017 GN. No. 198 Of 2017), Together with ……………………………….(name of
the Supplier) obtained through competitive tendering process administered by the
AGENCY for the considered period, irrevocably agree to abide by the terms of this
contract.
WHEREAS OMCs procuring petroleum product under this agreement shall be (i) licensed
by EWURA and registered by AGENCY (ii) at the time of placing their orders, there is
no default payment on their shares of refined petroleum product from previous contracts.
AND WHEREAS
In consideration of the payment to be made by each Purchaser to the Supplier as
hereinafter mentioned, the Supplier hereby covenants with the AGENCY (on behalf of
the Purchasers) to supply JET A-1 & IK and to remedy defects therein in conformity
with all aspects in respect with provisions of the contract.
Each Purchaser as expressed in this contract and the Shipping and Supply Agreement
between the Purchaser and the AGENCY hereby covenants to be bound by this
contract and to pay the Supplier in consideration of the supply of JET A-1 & IK and the
remedying of defects therein, the contract price or such other sum as may become
121
payable under the provisions of this contract at the times and in the manner prescribed
by this contract.
The AGENCY confirms that it has collected the procurement requirements of JET A-1 &
IK from OMCs, and shall; (i) coordinate invoicing for the respective shares of JET A-1 &
IK to be supplied to OMCs by the Supplier; (ii) coordinate diligent receipt by OMCs of JET
A-1 & IK from the delivery vessel; (iii) maintain records of delivery and performance and
ensure the product imported meet the prescribed specifications.
NOW THEREFORE IT IS AGREED AS FOLLOWS:
1.0 EFFECTIVE DATE
1.1 This Contract shall take effect on …………………………and shall continue until all
obligations have been completed to be performed or terminated as provided
hereinafter.
2.0 ABBREVIATIONS, DEFINITIONS AND CONSTRUCTION
2.1 The following Abbreviations shall have the meanings provided:
Bbls @60oF Barrels at 60º Fahrenheit
B/L Bill of Lading
BPS Bulk Procurement System
COD Completion of Discharge
CPP Clean Petroleum Product
DAP Delivered at Place (incoterms 2010)
DISPORT Discharge Port
EWURA Energy and Water Utilities Regulatory Authority
FOB Free on Board
ICC International Chamber of Commerce
IK Illuminating Kerosene
INCOTERMS International Commercial Terms (Set by International
Chamber of Commerce, U.K)
IFIA International Federation of Inspection Agencies
KOJ Kurasini Oil Jetty
L/C Letter of Credit
LIBOR London Inter-Bank Borrowing Official Rates
MT Metric Tonnage in air
NOR Notice of Readiness
122
 OMC Oil Marketing Company
SBM Single Buoy Mooring
SHINC Saturdays, Sundays, Holidays included
TASAC Tanzania shipping Agency Corporation
TBS Tanzania Bureau of Standards
TPA Tanzania Ports Authority
TRA Tanzania Revenue Authority
TT Telegraphic Transfer
USD United States Dollar
WMA Weights and Measure Agency

2.2 The following terms shall have the meanings provided:

2.2.1. “Agency” shall mean the Petroleum Bulk Procurement Agency
2.2.2. “Cargo” shall mean a specific delivery/shipment of refined product of
Industry Import.
2.2.3. “Charter Party Terms” shall mean the terms of the Contract as shall be
agreed between the SUPPLIER and the ship owner for a specific Cargo.
This shall include any form of agreement.
2.2.4. “Cleared Funds” shall mean payments confirmed by Supplier’s Bank as
received either through Electronic Funds Transfers (EFT) or Letter of
Credit.
2.2.5. “Delivery Date Range” shall mean the dates of delivery.
2.2.6. “Demurrage Committee” shall mean the demurrage validation and
verification committee.
2.2.7. “Effective Date” shall mean the date of the execution of the contract.
2.2.8. “Financial hold product” shall mean a product which has not been secured
by purchaser either by way of letter of credit or Electronic Funds Transfers
(EFT).
2.2.9. “Full Cargo” shall mean total tendered parcel size, with operational
tolerance of+/- 5% at Supplier’s option, which will be allocated in full to all
Purchasers prorata based on their placed orders.
2.2.10. “Marine Inspector” PBPA employee assigned to perform marine
operations under the Bulk Procurement system

123
 2.2.11. “Marine Surveyor” Shall mean Independent Marine Inspection company,
whose ownership is fully disclosed, and is member of IFIA and other
international organizations that provide inspection, testing and
certification of marine services.

2.2.12. “OMC” shall mean an Oil Marketing Company signatory to this Contract
as well as to the Shipping and Supply Agreement who is the Purchaser
of petroleum product subject to this Contract.

2.2.13. “Purchaser” shall mean any person procuring petroleum products

through Bulk Procurement System (BPS)

2.2.14. “Product” Shall mean JET A-1 & IK

2.2.15. “Replacement cargo” shall mean a different product which is within the
approved specification imported after the initial import has been
declared off spec as provided in this contract

2.2.16. “Safe berth” shall mean a berth which vessels so conforming, and having
any beam, can at all times safely reach and leave and at which such
vessels can lie at all times safely afloat.

2.2.17. “Supplier” shall mean an entity signatory to this contract and which has
been awarded a tender to supply JET A-1 & IK through BPS

2.2.18. “Tender” shall mean an invitation to treaty/contract to supply JET A-1 &
IK under the Bulk Procurement System. Vessel pre-discharge Meeting”
shall mean the meeting chaired by Agency Marine Inspector and
attended by nominated Terminal Representatives and receivers, whose
main agenda is to agree on product discharge sequence for a particular
vessel.

3.0 TRANSIT PRODUCTS PROCURED UNDER BPS

3.1 The OMC shall be a notifying party for the transit cargo duct and shall inform
the Supplier the consignee(s) on whose name the product shall be manifested
and warehoused under transit, and shall take full responsibility for performance
this agreement. In addition, the Purchasers shall;
a) Place orders /nominate the quantity of product on behalf of the transit
consignees;
b) Eleven (11) days before the birthday of delivery date range the OMC shall
notify the supplier copy PBPA on cargo splits and consignee details.
c) Ensure L/Cs are opened and payments are made and transmitted to the
Supplier within the specified time; and
d) The supplier has the right to perform KYC
124
 3.2 Any payment default by the consignee of the transit cargo shall be treated as
default by the Purchaser that nominated the defaulting consignee.

4.0 DOCUMENTS FORMING PART OF THE CONTRACT

4.1 The following documents shall form, and be construed as part of this Contract:
a) TBS product Specification,
b) Shipping and Supply Agreement between Agency and OMCs,
c) Price, Quantity and delivery Schedule.
d) Bidding documents,
e) LC and Invoice Formats.
f) The Agency’s Notice of Award to Successful Bidder,
g) Supplier Performance Security Bond as per format included in the BPS
Tender Document,
h) Holding and release certificate for product under financial hold,
i) Certified true copy of charter party terms and conditions. The charter
party agreement shall not be tempered with.
j) Bank guarantee from the OMCs
k) Documents submitted by the Supplier during application for
prequalification.
l) Standard Operating Procedure for Petroleum products
receipt/Discharge from the vessel

4.2 The Agency reserves the right to verify the authenticity of the submitted charter
party agreement. In the event that it will be established that the supplier has
submitted forged or tempered charter party agreement the suppliers shall be
penalized in accordance with clause 18.6

5.0 QUANTITY & CARGO NOMINATION

5.1 The quantity to be supplied under this contract shall be a Full Cargo as per
delivery date range in the price, quantity & delivery schedule, prorated to each
Purchaser that has placed orders for product on the delivering vessel.
5.2 Minimum Batch per vessel for each Purchaser shall be 500 MT
5.3 Minimum Batch per receiving terminal shall be 1000 MT
5.4 Minimum order per delivery month shall be 1000 MT
5.5 Supplier is not allowed to deliver JET A-1 & IK below or above the tolerance
(+/-5%). In the event the vessel has arrived with cargo outside tolerance level
the supplier shall;
(a) Notify the Agency upon Purchasers willingness to purchase
additional quantity. The product should be for transit only

125
 (b) Pay a penalty of USD 5 per MT for under delivered quantity.
(c) Notwithstanding the provision of clause 5.5(a) the supplier shall
be required to pay penalty of USD 5 per MT for the added arrival
quantity.
(d) Compute demurrage taking into account the added arrival
quantity (Full cargo).
5.6 The Supplier request to use BPS vessel to load private transit cargo as stipulated
in the price quantity and delivery schedule shall be lodged to the Agency not
later than fifteen (15) days before the first day of delivery date range. Any
request lodged out of time shall not be considered.
5.7 Notwithstanding the provision of clause 5.5 of this contract. Acceptance of the
Supplier request to use BPS vessel to carry transit cargo shall be made under
the following conditions.
(a) Premium shall be diluted prorata to the added transit cargo. The
formula for diluting premium is as provided below
Diluted Premium=Tendered Premium X Tendered Quantity
(Tendered Quantity + Additional Quantity)

(b) Demurrage shall be computed by taking into account the added

transit cargo
6.0 DELIVERY TIME, POINT AND DISCHARGE OF PRODUCTS
6.1 The delivery date range as per Appendix 1 of the bid document purchased by
the Supplier is to be strictly adhered to. PBPA in consultation with the Supplier
can request change of delivery date range provided that such request is
communicated in writing at least thirty (30) days before the first day of the
original delivery date range or at least thirty (30) days before the first day of
the revised delivery date range whichever comes first. Any request which will
be made out of time will not be considered.
6.2 Full cargo shall be delivered DAP ONE SAFE BERTH ONE SAFE port SBM Dar es
Salaam for JET A-1 & IK.
6.3 The cost of storing product into nominated terminals which can receive direct
from SBM shall be borne by the individual Purchasers at the rate and terms
agreed between individual Purchasers and terminal owners.
6.4 The vessel delivering JET A-1 & IK under the BPS must conform to TPA Shipping
standards as well as minimum pressure at vessel discharge Manifold of 8 bars
& Maximum pressure of 12 bars at vessel discharge manifold at SBM.
6.5 For any vessel not meeting the minimum specification specified in clause 6.4
above resulting in discharge delays; such additional time incurred due to delays
shall not count as time on demurrage on that particular vessel as well as the
126
 vessels that have already tendered NOR during discharge of poor performing
vessel.

7.0 QUALITY, QUANTITY AND INSPECTION

7.1 Quality of JET A-1 & IK delivered and discharged pursuant to this contract shall
be as per the specifications provided by TBS included in BPS tender document.
7.2 The quality of Product delivered under this contract shall be determined by TBS.
7.3 The Agency shall reject any JET A-1 & IK that has been confirmed by TBS as
not meeting specifications as per clause 7.1 above.
7.4 Representative samples of the cargo on arrival at discharge port shall be taken
and sealed by the Agency Marine inspector, Supplier Marine Surveyors and TBS
and the same shall be retained by all parties. Each party shall keep records of
the numbered seals and sample reference number.
7.5 The Agency shall retain three sets of sealed samples for at least ninety (90)
days.
7.6 Any product which has not met the approved TBS specification shall not be
offloaded from the delivery vessel.
7.7 In the event of any dispute on quality of the cargo, the sealed representative
samples taken and retained by AGENCY, Supplier marine surveyors and TBS in
accordance with clause 7.4 above shall be retested by TBS or any other
laboratory contracted by TBS in the presence of representative of the Agency,
and the Supplier. The results of which shall be the basis of resolving the dispute.
Supplier Marine surveyors shall be allowed to witness testing of all samples.
7.8 The arrival quantity under this contract shall be determined by WMA. Density
determined by TBS shall provide the basis of determining the arrival quantity.
7.9 In the event of any dispute on arrival quantity, the quantity determined by WMA
shall be final and binding.
7.10 During discharge operations Agency and Supplier shall;
(a) Take samples on board the vessel, at the jetty head and tanks
of receiving terminals before and after completion of discharge
to receiving terminals. The samples taken are for retention
purposes.
(b) Seal all samples and clear labelled them with the location and
source, the date and time of sampling, a unique reference
number, the sample type, the grade of fuel, the batch number
and a means of identifying who drew the sample. The label shall
be printed and filled in with ink that does not run when exposed
to either water or hydrocarbon.
127
 (c) Records of seals numbers for each retained samples.
(d) Retain samples taken under clause 7.10 (a) for at least ninety
(90) days.
7.11 In the event of any dispute in relation to contamination of product during
discharge, samples taken under clause 7.10 shall be used to determine the
point and cause of contamination.
7.12 Samples taken under clause 7.10 shall be tested at an internationally accredited
laboratory mutually agreed by the Agency, the Purchasers and the Supplier.
7.13 Each vessel shall carry three load port samples for each vessel compartment,
the sample shall be retained by Agency and Supplier Marine Surveyor.

8.0 MANAGEMENT OF DISCHARGE OPERATIONS

8.1 Discharge sequence of JET A-1 & IK shall be as agreed during Vessel pre-
discharge meeting. Any deviation from the agreed discharge sequence shall be
approved by the Agency and the Supplier after consultation with respective
receiver.
8.2 Purchasers are required to issue ullage confirmation two (2) days before the
berthing date at disport.

9.0 HANDLING OF REJECTED OFF SPEC CARGO AND REPLACEMENT CARGO

9.1 Subject to clauses 7.1, 7.2, and 7.3 above, TBS shall guide the Agency in
accordance with TBS standards and regulations on the way of handling the
rejected off spec JET A-1 & IK and the Agency shall advice the Supplier
accordingly.
9.2 If TBS has confirmed that the imported cargo does not meet JET A-1 & IK
standards applicable in BPS tenders, the Agency shall reject the cargo and
inform the Supplier to replace the cargo; the replaced cargo must meet required
standards and it shall be authenticated by a new set of shipping documents.
The new set of shipping documents shall be supplied by the Supplier within
terms and conditions of the contract or terms and conditions which will be in
place at the acceptable time of delivery whichever is favorable to the
Purchasers.
9.3 Any such replaced JET A-1 & IK shall be treated as delayed product and shall
be subject to late delivery penalties provided in this contract.
9.4 Purchasers shall be relieved from the late payment penalties accrued on the
rejected cargo. Late payment penalty shall start to accrue upon arrival of the
replaced cargo.

128
 9.5 The Supplier shall be required to refund all money advanced or cancellation of
any confirmed L/C from the Purchaser with compensation for any costs incurred
in establishing the L/C once the cargo is rejected as off spec.
9.6 Subject to clause 9.4 Purchasers shall be required to open and confirm L/Cs as
required by this contract based on the new delivery window to be
communicated by the Agency.
9.7 In the event that the intended replacement cargo does not meet JET A-1 & IK
standards applicable in BPS tenders, notwithstanding any other rights, the
Agency shall have the right to immediately call for an emergency tender. All
costs and expenses incurred by the Agency in arranging the delivery of a cargo
in replacement of the cargo which is off spec shall be borne by the Supplier
who supplied off spec product.
9.8 Subject to the laws governing the importation of JET A-1 & IK in Tanzania and
terms of this contract, any Supplier who will deliver JET A-1 & IK that does not
meet the approved specification, that Supplier shall be penalized as stipulated
in the Petroleum Act.

10.0 PAYMENT TO MARINE SURVEYORS

10.1 In the event supplier has engaged Marine Surveyor charges for services
rendered at discharge port shall be borne independently by supplier.

11.0 VESSEL NOMINATION

11.1 Supplier shall nominate the Vessel to the Agency fifteen (15) days prior to the
first day of delivery window. Consequently, after consultation with TPA, the
Agency shall be required to revert to the Supplier with their acceptance or
rejection of the said nominations within twenty (24) running hours of receipt of
nomination from Supplier.
11.2 All vessels delivery product must have Double Hull, meet maximum age limit of
fifteen (15) years and meet any other requirement issued by TPA.
11.3 The supplier is allowed to substitute the nominated vessel provided that the
newly nominated vessel will undergo the vetting process as stipulated in clause
11.1. All cost resulting from substitution of vessels Will be on the account of
the suppliers.
11.4 Subject to clause 11.1 no nomination shall be rejected unreasonably and all
rejections must be supported by relevant documentations.

129
12.0 PRICE
12.1 The price of the product DAP SBM, Dar es Salaam shall be the Total of FOB
component plus DAP tender premiums as quoted in the Price and Quantity
Schedule of JET A-1 & IK herein attached to form part of this Contract.
12.2 The FOB component shall be according to the tender called and confirmed by
the Agency, this shall be the arithmetic mean of Platt’s high and low quotations
for dates of pricing as follows:
a) The applicable dates of pricing shall be as started in the Price and
Quantity Schedule of Petroleum product attached to the BPS tender
document which forms part of this Contract,

b) Any revision of delivery window shall not affect the pricing date range
defined in this contract,
c) Supplier agrees to supply (transfer ownership of) the quantity (+/-5%)
per vessel subject to L/C being established by the Purchaser within the
agreed time.
12.3 For Jet A-1, Platt’s Asia Pacific/Arab Gulf Market scan under the heading ‘FOB
Arab Gulf for Kero to apply. Actual united states Barrel to Metric Ton
conversion per certificate of quality issued by WMA on arrival
12.4 Port Handling Charges as well as TASAC and Delivery order charges shall be on
the Supplier’s account and shall be part of the DAP premium.
12.5 Any published correction to any relevant assessment shall be notified to
Purchasers within three (3) working days of the Platt’s correction.

13.0 INVOICING
13.1 Supplier’s final invoices shall be in USD based on FOB Component with
applicable pricing month as per clause 12.2 plus DAP premium as provided in
the price and quantity schedule and ship’s arrival quantity as determined
pursuant to clause 13.2.
13.2 Notwithstanding provision of clause 12.1, quantity to be used for invoice
purposes shall be the lower quantity between load port Bill of lading and ship’s
arrival quantity measured at discharge port in Tanzania
13.3 Final invoice shall contain the breakdown of prices as mentioned in clause 13.1
and 13.2 above, including (a) the detail of all considered quotations, expressed
in their original unit, be in USD/MT or USD/Bbls as the case may be, (b) in
connection with the quantity stipulated, the details of the two computations
below shall be expressly stated in the final invoice to determine the quantity
based on the lower of the load port B/L quantity and the vessel arrival quantity
measures at the DISPORT in Tanzania:
130
 i. for the computation of quantity utilizing the quantity measures
at DISPORT, refer to clause 7.8; and
ii. for the computation of quantity utilizing the quantity measured
at load port, the B/L figures shall apply for the final quantity to
be invoiced and for the conversion factor to be applied for the
conversion of the unit price from USD/Bbls to US/MT.
13.4 The invoice should be as per annexure SSC 01.
13.5 All amounts shall be calculated to 4 (four) decimal places.
13.6 Supplier to provide final commercial invoice to the receivers copied to the
Agency within 10 working days from the date of completion of discharge.
13.7 Latest by the fifth (5th) day from the date of completion of discharge or by the
fifth (5th) day from the end of the pricing month, which is later, the Supplier
shall send to the Agency copy to all Purchasers the final unit price of the cargo
detailing:
(a) The quotation used as published by Platts in actual defined units
as per publications (USD/Bbl.
(b) The detailed computation of the total cargo quantity to be
invoiced for each of (i) quantities measured as DIPSORT, and (ii)
quantities measured at the load port using the B/L figures.
(c) Related premium and demurrage provision
13.8 The Agency shall revert within three (3) working days to the Supplier with a
copy to all Purchasers to confirm or provide comments on the unit price for the
purpose of the final invoice.
13.9 Supplier shall provide to PBPA table of summary of invoiced quantity per
purchaser latest ten (10) calendar days from the date the vessel has completed
to discharge. The table shall contain but not limited to name of the purchaser,
premium, FOB price and quantity.
13.10 The supplier shall issue final invoice within fourteen (14) days from the date
the vessel has completed discharge.
13.11 The final price shall be paid within time frame specified in this contract.
13.12 Profoma invoice to be used only for the purpose of opening L/C. Profoma
invoice should not be used in lieu of Final invoice for payment under the Letter
of credit. Only Final invoice shall be used for payment under the letter of credit
through documentary presentation.

131
14.0 PAYMENT AND PENALTY FOR LATE PAYMENT
14.1 Payment through L/C:
a) Purchaser shall latest five (5) calendar days before 1st day of delivery
date range or latest five (5) calendar days after receipt of the needed
documents from the Supplier provide an irrevocable L/C opened by the
Purchaser’s Bank but confirmed by any Bank as provided by the Supplier.
The Supplier shall provide to the Agency a list of minimum ten (10)
confirming banks before signing the contract as provided in the Notice of
Award.
b) L/C issued by any issuing bank shall be confirmed by any of the ten
(10)listed banks by the supplier, supplier has a right to reject any issued
L/C that has not been confirmed by the ten (10) listed banks.
c) The L/C shall be payable at the Supplier’s bank, without offset, deduction
or counter claim and free of all charges latest sixty (60) calendar days
from the first day of delivery window.
d) Charges for establishing the L/C will be borne by the Purchaser.
e) L/C advising charges and confirmation charges shall be borne by the
Supplier.
f) LC’s shall be confirmed within three (3) working days from the date the
LC has been issued as long as the purchaser has the acknowledgement
from the confirming bank that the L/C has been received Any cost
associated with delay of LC confirmation shall be on the account of the
supplier.
g) All commissions and charges from the issuing bank are for the applicant’s
(buyer’s) account. All commissions and charges from the confirming and
advising bank are for the beneficiary’s (Supplier’s) account.
h) All cost resulting from L/C amendments shall be borne by the party
which caused the amendments to be made. If the L/C amendment will
be caused by factors which are neither caused by the Supplier nor the
Purchaser L/C amendment cost will be shared equally between the
Supplier and the Purchaser.
i) For establishing of L/Cs by the Purchaser, the Supplier shall submit the
PFI and all needed documents to the Purchaser and the Agency latest 10
calendar days before the first day of delivery window. For purpose of this
clause and clause 14.1 and 14.4 of this contract the needed documents
are;
i) copy of Bill of lading
ii) load port certificate of quality

132
 iii) Certificate of origin.

j) In issuing PFI the supplier shall take into account the information
provided by OMC in paragraph 3.1 (b) above.
14.2 The purchaser shall not be held responsible for any delays in opening the L/Cs
if such delays have been caused by the Supplier’s failure to send the needed
documents (to enable Purchasers to open L/C) within the time bar stated in this
contract. The Purchaser shall immediately upon receipt of the PFI notify the
Supplier and the Agency on the intention to make bank transfer or any alternate
payment as mutually agreed between Supplier and Purchaser
14.3 The Supplier shall notify the Agency on any alternate payment agreement
(including but not limited to bank transfer, pre-payment, fixed payment dates
or credit arrangement etc.) with the Purchaser not later than five (5) working
days prior to first day of delivery date range.
14.4 Bank Transfer or pre-payment
a) Any Purchaser who shall prefer to make payments by bank transfer
or pre-payment shall effect payments latest three (3) calendar days
before 1st day of delivery date range or latest five (5) calendar days
upon receipt of proforma invoice (PFI) from Supplier whichever is
later.
b) The Supplier at his discretion may offer discount to bank transfer or
pre-payment done by Purchasers.
c) The purchaser shall not be held responsible for any delays in making
bank transfer or prepayment, if such delays have been caused by
the Supplier’s failure to send the needed documents (to enable
Purchasers to make bank transfer or prepayment) within the time
bar stated in this contract.

14.5 Purchaser’s parent / Affiliate companies shall have the option to establish L/C
on behalf of Purchaser.
14.6 Transit parcels shall be paid by the consignees of the said parcels. Purchasers
who placed orders shall make sure that the consignees of transit parcels pay
for their cargoes within stipulated contractual duration. Any penalty resulting
from consignee of transit cargo delays to open LC for the transit parcel shall be
on account of the purchaser.
14.7 L/C and bank transfer or prepayment shall be made against presentation of
Supplier’s commercial invoice and certified copies of shipping documents as
listed in clause 14.8 unless mutually agreed otherwise between Supplier and
Purchaser.
14.8 For the purpose of this contract copies of shipping documents shall include:
a) Certificate of origin,
133
 b) Certificate of Quality (COQ) on vessels ship tank composite sample
on arrival at disport issued by TBS,
c) Certificate on vessel’s arrival quantity issued by WMA.
14.9 Supplier must ensure that cargo manifest is lodged to all relevant authorities
including but not limited to the Agency and TASAC with endorsed copy of Bill
of Lading (for customs purposes only) five (5) calendar days before the vessel
has tendered NOR. The cargo manifest shall correspond to the PFI and
endorsed BL provided to the Purchasers. Cost of lodging cargo manifest and
issuing of Delivery order shall be borne by the Supplier.
14.10 Any and all costs or charges or penalties resulting from delays in berthing
caused by any Purchaser not having settled or performed the required
declarations with TRA, TASAC and TPA will be solely payable by Purchaser.
14.11 Any and all cost or charges or penalties resulting from delays in lodging of the
cargo manifest caused by the Supplier and where such delays result in the
Purchaser’s delay to make necessary declaration to TRA, TASAC, and TPA will
be solely payable by the Supplier.
14.12 Where there is any default in providing the L/C or making bank transfer or
prepayment on due time, parties shall be guided by the provision of clauses
14.1(g & i),14.4, 14.15 and 14.16,
14.13 Supplier’s vessel shall only carry cargo ordered through the Agency or upon
approval from the Agency as provided in clause 5.6 and 5.7
14.14 Invoices shall be raised for DAP i.e. FOB component plus DAP premiums as
stipulated in this Contract and detailing the price computation (including the
Platts quotes as published, the conversion factor utilized and its computation,
quantity at load port and quantity at DISPORT, supported by documentation
stipulated in clauses 14.8 and 14.9.
14.15 Purchaser who delays to open L/C or make pre-payment as stipulated in this
contract shall be liable to penalties as stipulated in The Petroleum (Bulk
Procurement) Regulations, 2017. This penalty is payable to the Agency for
distortion of Bulk Procurement System
14.16 Purchaser who fails to pay for its share of a JET A-1 & IK at the due date as
per the credit period sixty (60) days shall be charged a late payment penalty of
LIBOR +2% per annum and be barred from participating in the following BPS
tender or both, the payment shall be paid to an escrow account operated by
the AGENCY for onward payment to the Supplier. For the purpose of this clause
due date is 60 days after the first day of delivery date range.
14.17 Notwithstanding the provision of clause 14.15 and 14.16, the Purchaser who
fails to pay or open L/C for the ordered product within five (5) days after COD
and the product has been discharged as product on financial hold, shall be
barred from participating in BPS until it has fulfilled all pending obligations.

134
 14.18 All third party charges associated with late payment e.g. TRA Taxes and
Penalties, TPA charges and penalties and storage charges, shall be on account
of the defaulting party and will be recovered as per actual prevailing costs.
14.19 In the event of variation on the invoiced amount, the Purchasers shall pay the
remaining unpaid amount within fourteen (14) days after the Supplier has
issued the final invoice. Likewise, within fourteen (14) days after the Supplier
has issued the final invoice, the Supplier shall refund to the Purchasers any
amount over paid.
14.20 Subject to clause 14.1 and 14.4 above the Supplier shall notify the Agency on
payment status for the vessel in the manner prescribed by the Agency.
14.21 In the event that the vessel will not be able to offload her cargo within delivery
date range as a result of vessel congestion or any other reason, the Agency,
Supplier and Purchaser may agree on payment reference dates and credit
period.
14.22 LC format shall be as provided in annexure SSC 02.

15.0 L/C DELAYED / DEFAULT

15.1 Where there is a default in providing the L/C or making bank transfer or
prepayment on due time, (if such delay and or default is not caused by the
Supplier) then the Supplier in consultation with Agency has the right to dispose
the batch elsewhere. For the purpose of this clause due date shall be five (5)
days before first day of delivery date range or five (5) days after receipt of PFI
and needed documents whichever is later.
15.2 In the event of the late provision of an LC or bank transfer or prepayment by a
particular Purchaser the product shall be discharged into a terminal nominated
by the Supplier as product on financial hold until payment has been done.
Storage cost shall be on the account of the defaulting Purchaser.
15.3 When there are ullage constraints as a result of the Purchaser failure to create
sufficient ullage to receive the ordered product, the purchaser shall nominate
the alternative terminal failure to, the purchaser shall be deemed to have
distorted BPS, and shall attract penalties as prescribed in the Petroleum (Bulk
Procurement) Regulations, 2017 (For the purpose of this provision penalty shall
be 0.5 USD per MT per day) also shall be liable to pay demurrage for the delay.
15.4 Prior to signing the shipping and supply contract, the Supplier shall inform the
Agency at least three acceptable terminals, which Supplier considers acceptable
at the time, to discharge the product which would be on financial hold.
15.5 Where product has been off-loaded as product on financial hold, the product
shall be so offloaded as manifested, however, the Purchaser shall be liable to
pay storage charges at the rate and terms provided by the receiving terminal.

135
15.6 Where the product has been offloaded on financial hold, the receiving terminal
shall issue a holding certificate to the Supplier with copy to Agency. The Holding
certificate shall state and guarantee that no product will be released without
written confirmation from the Supplier and or its financier. Upon receipt of the
funds or of the L/C the Supplier or its financier shall issue a release certificate
to the terminal with a copy to the Agency.
15.7 The Supplier shall not prevent any vessel from berthing due to financial hold.
15.8 Failure to adhere to clause 14.1 and 14.4 above, the Purchaser shall not be
allowed to participate in the next tender until such product has been fully paid
to Supplier including all associated costs with Supplier, Agency and the receiving
terminal.
15.9 The Agency guarantees that costs incurred by the Supplier or any receiving
terminal resulting from the suppliers exercising right to dispose the product as
stipulated in clause 15.1 shall be settled by cashing the bank guarantee
provided to Agency by the Defaulting Purchaser, without prejudice to the
Agency’s rights and/or Supplier or receiving terminal further claims or damages
from the Purchaser.
15.10 The Agency does not guarantee that the available bank guarantee shall be
sufficient to cover all claims raised by the supplier. In the event that the
available bank guarantee is not sufficient to cover all cost incurred by the
supplier appropriate legal measures shall be taken against the defaulting
purchaser.
15.11 Any payment from the cashed bank guarantee shall be made by the Agency to
the Supplier or any terminal upon submission of relevant supporting claim
documents
15.12 In the event that the Purchaser has paid taxes but has not opened L/C the
Supplier shall continue to have rights (including right to dispose the product)
over the product on financial hold until the time when the product has been
paid for.
15.13 The Supplier shall, when disposing the product on financial hold take into
account taxes, wharfage and other costs paid by the defaulting Purchaser. The
Supplier, in consultation with the Agency, shall agree on modality to refund
taxes, wharfage and other costs paid by the defaulting Purchaser. The refund
thereof shall be subject to fulfillment of all obligations and liabilities resulting
from failure to open L/C. Failure by Purchaser to fulfill all obligations and
liabilities resulting from failure to open L/C the amount to be refunded shall be
used to cover outstanding obligations.
15.14 The Supplier shall within 10 days after disposal of product on financial hold
submit to the Agency all documents relating to selling of the product in question
including detailed elaboration of the costing for the product this shall include
but not limited to losses, and storage charges. Failure to submit all the needed
136
 documents implies that there was no cost incurred in disposing the product on
financial hold.

16.0 DOCUMENTS
16.1 Supplier shall forward to Purchaser and the Agency the following documents
not later than eight (8) calendar days prior to the first day of delivery date
range.
a) Copy of bill of lading endorsed with the relevant quantity per
Purchaser;
b) Copy of load port Certificates of Quality;
c) Copy of bill of lading endorsed with the relevant quantity per
Purchaser;
d) Copy of load port Certificates of Quality;
i. For Jet A-1 all certificates of quality issued in the chain of supply
from the refinery to the delivery vessel; including refinery
quality certificate (RQC) that is produced at the point of
manufacture and or acceptable certificated of quality (COQ)
that come out from the downstream of refinery in the
intermediated supply terminal or if the cargo has been shipped
from another terminal. The two documents shall cover the
batch showing the fuel grade and confirm that they meet all
applicable and relevant specifications or the latest JIG Aviation
Fuel Quality Requirements for Jointly Operated System
(AFQRJOS) checklist.

ii. A copy of the latest recertification test certificate for JET A-1,
where applicable (for non-dedicated vessel, a multiple tank
composite sample should be prepared for recertification test to
confirm the condition of the product on board of the vessel).

iii. Release certificate(s),

iv. inventory of samples,
v. Inspectors report from the load port including previous cargo
and cleaning procedure and loading plan (if available).
e) Copy of load port Certificates of Quantity.
f) Copy of certificate of Origin; for Jet A-1 all certificates shall be issued in
the chain of supply from refinery to the delivery vessel.
g) Copy of load port cargo manifest
h) Valid calibration certificates of;
II. Ullage Temperature Interface (UTI)
III. All vessel Tanks
16.2 Failure to submit document within three days from BL date the supplier shall
be liable for penalty of 0.5 per MT per day payable to the purchasers.
137
 16.3 Supplier shall forward to Purchasers and the Agency the following documents
prior to discharge:
a) Vessel ullage report issued at disport,
b) Certificate of Quantity at disport,
c) Certificate of Quality on representative Ship’s tank composite sample taken
and sealed on arrival at discharge port.
d) Tank cleanness certificate issued before loading.

16.4 For the purpose of clause 16.2 above, there shall be no discharge of cargo
before receipt of the documents required prior to discharge.
16.5 Upon completion of discharge the Supplier shall within five (5) working days
from the date of completion of discharge forward the following documents to
the Agency:
a) Copy of Charter Party Agreement or Fixture
b) Statement of facts at Disport,
c) Pumping Log at Disport,
d) Full Inspection Report after completion of discharge,
e) Copy of list of representative ship’s tank composite samples on arrival
at disport retained by Agency, Marine Surveyor appointed by the
Supplier.
f) Copy of list of representative ship’s tank composite samples on arrival
at disport retained by TBS.
g) Copy of list of load port ship’s tank composite samples

16.6 Where the vessel has been allocated a berthing window and discharge is
delayed due to Supplier’s failure to submit the required documents prior to
discharge any and all such costs incurred on either party shall be borne by the
Supplier.

17.0 LAYTIME
17.1 Lay time shall be 36 hours SHINC for a full cargo discharged at KOJ1 Dar es
Salaam, commencing 6 hours from tendering Notice of Readiness or upon
vessel ‘All Fast’, whichever is earlier.
17.2 Time lost due to non-berthing of tankers during night time and/or awaiting
daylight, high tide, shall not count as used laytime.

18.0 DEMURRAGE
18.1 Supplier shall additionally be entitled to charge demurrage which shall be as
stipulated in the charter party terms and conditions but subject to a maximum
of USD 18, 000 per day pro rata based on actual discharged quantity at SBM
138
 Dar es salaam port, which may be higher but not lower than the tendered
volume for specific cargo for pro rata computation purposes.
18.2 A provision for demurrage of US$ 2 /MT to be covered under the L/C.
18.3 Supplier shall provide demurrage computation to the Agency within seven (7)
working days from the COD date of each cargo. For the purpose of verification,
Supplier shall also be required to avail to the Agency the relevant supporting
documents. Failure to submit the claim within time and to submit necessary
documents will render the claim null and void.
18.4 The Agency through its demurrage committee shall validate the submitted
Demurrage computation and respective supporting documents within fourteen
(14) working days after receipt of the demurrage computation from the
Supplier. Failure to, the demurrage computation submitted by the Supplier
shall be considered as final and binding save for fraud or manifest error
18.5 Computation of demurrage shall be based on the demurrage charges as per the
charter party agreement terms and conditions but subject to a maximum United
States dollar eighteen (USD 18, 000) per day.
18.6 In the event it will be established that the submitted charter party agreement
is not genuine and the shown demurrage cost does not reflect the actual
demurrage charged by the charterer the supplier shall be liable to a penalty of
USD 50,000 payable to the Agency.
18.7 The final demurrage cost for that particular vessel shall be prorated to all
Purchasers after excluding demurrage cost which shall be paid by the causative
parties. The Supplier shall issue demurrage invoice to causative parties.
Particulars of the causative parties shall be communicated to the Supplier by
the Agency.
18.8 Based on clause 18.7 above the Supplier shall issue demurrage invoice within
seven (7) calendar days after final cost has been concluded as per clause 18.5.
18.9 Purchaser shall pay prorated final Demurrage cost due within fourteen (14)
calendar days of receipt of invoice from the Supplier. In case of any demurrage
refund, the Supplier shall pay the Purchaser within fourteen (14) calendar days
from date of invoice.
18.10 Supplier shall within thirty (30) days from the date of issuing invoice submit to
the Agency a report of demurrage of payment by respective Purchasers’. Failure
to it will be presumed that the Supplier has been fully paid and there is no
pending demurrage claim.
18.11 In the event the provisional demurrage under clause 18.2 above does not
suffice or the relevant Purchaser did not make payment within the time bar as
stated in clause 18.9, the Agency guarantees to pay demurrage by cashing the
same from relevant Purchaser’s bank guarantees or utilizing cash cover latest
ninety (90) days from issuance of the invoice. However, the Agency does not
139
 guarantee that the available bank guarantee shall be sufficient to cover all
claims raised by the supplier. In the event that the available bank guarantee is
not sufficient to cover all cost incurred by the supplier, appropriate legal
measures shall be taken against the defaulting purchaser.
18.12 If the vessel arrives between 18:01 hrs. to 05:59 hrs., NOR tendered shall be
considered at 06:00 am of the next day; and laytime shall apply as per clause
17
18.13 For vessel arriving within the allocated delivery window, time will commence
from the time when the NOR is tendered subject to terms and conditions of this
contract.
18.14 For vessel arriving before the allocated delivery window, time will commence
from 06:00 am of the first day of delivery window; and laytime shall apply as
per clause 17.
18.15 For vessel arriving after the allocated delivery window, the demurrage will
commence when the vessel is ALL FAST or commenced mooring.
18.16 For vessel arriving after 18:01 hrs. of the last date of the allocated delivery
window shall be viewed as missing delivery date range and the demurrage will
commence when the vessel is ALL FAST or commence mooring.
18.17 Demurrage invoice shall be as provided in annexure 03

19.0 STATEMENT OF ACCOUNTS

19.1 Supplier is obliged to issue statement of accounts to all receivers on monthly
basis. The statement of account shall cover product and demurrage payments.
If the supplier will not send the statements of accounts thirty (30) days after
the initial reminder, the Agency and Purchaser shall not be held liable for any
delays to settle the outstanding demurrage.

20.0 HOLDING PAID UP PARCELS AS SECURITY FOR UNPAID UP PARCELS

20.1 The supplier shall not hold paid up parcels as security for un paid parcels in the
same tender or different tenders.
20.2 For the purpose of this contracts parcels in the same tender shall be considered
as separate parcels based on the below circumstances
(c) Transit parcels
(d) Separate PFI have being issued

140
21.0 TITLE AND RISK
21.1 Tittle to the product shall pass to the buyer from the seller upon establishment
of the L/C or pre-payment by the buyer.
21.2 Risk to the product (including product on financial hold) shall pass from the
Supplier to the individual Purchaser as the product passes the vessel’s
permanent flange at disport KOJ1 Dar Es Salaam.
21.3 As a separate and independent condition Purchasers agree that unless and until
the full purchase price is tendered, the product shall be the Supplier’s product
21.4 Until delivery and discharge of the product the Supplier shall insure the product
against all risk to full replacement value and shall not re-sell, use or part with
possession with them.

22.0 TERMINATIONS
22.1 Without prejudice to any other remedy for breach of this Contract, or by written
notice of default sent to the concerned party, this Contract shall be terminated
by either party upon the occurrence of any of the following:
a) If the other party causes a fundamental breach of the Contract,
fundamental breach of Contract shall include, but shall not be limited to
the following:
i. The Supplier fails to deliver JET A-1 & IK within the period(s)
specified in the contract, or within any extension thereof granted
by the Agency, or
ii. The Supplier fails to perform any other obligation(s) which affect
security of supply under the Contract, or
iii. The Supplier has decided to unilaterally repudiate the Contract, or
iv. The Supplier has been convicted of having engaged in corrupt or
fraudulent practices in competing for or in executing the Contract,
or
b) Upon dissolution, bankruptcy, insolvency, or appointment of a receiver,
liquidator, or trustee in bankruptcy for that party.
c) Written notice to a party that a law has been introduced or amended by
an Act of Parliament so that it is unlawful for that party to operate or
perform its duties and obligations under this Contract or realize the
benefits of this Contract.
22.2 Notice of termination under this Contract shall not discharge or relieve the
withdrawing party of any rights, duties, obligations or liabilities arising prior to
such termination, nor prejudice any rights or remedy accruing before, at or in

141
 consequence of such termination, or any proceeding with respect to any such
right or remedy including any proceedings by way of arbitration provided for
hereunder.
22.3 In the event the Agency terminates the Contract pursuant to this clause, the
Agency shall make necessary arrangement in such manner as it deems
appropriate, to supply petroleum products similar to the undelivered cargo, and
the terminated Supplier shall be liable to the Agency for actual costs for such
similar petroleum product as well as penalties as stipulated in this contract.

23.0 LATE DELIVERY

23.1 Late delivery default arising from causes other than a force majeure event shall
attract a late delivery penalty of US$ 0.5 per metric ton per day to be paid by
a Supplier to the Agency in order to compensate buyers for compromising their
minimum stocks or for compelling them to procure JET A-1 & IK from other
sources.
23.2 For this purpose, late delivery penalty shall accrue from the first day after the
allocated delivery date range until the vessel arrives.
23.3 Supplier shall make payment for late delivery to the Agency within thirty (30)
days from COD and the Agency shall make the payment to the purchaser fifteen
(15) days after receipt of the funds from the supplier.
23.4 Penalty prescribed in clause 23.1 and 23.2 shall be paid to an escrow account
operated by the Agency for onward payment to the purchaser within thirty days
from the date of signing a settlement deed/minutes with the Agency.
23.5 Until such payment is affected in full and receipt of monies confirmed by
Purchasers the Supplier shall not participate in any of the tenders for the supply
of JET A-1 & IK under the BPS until confirmation of full payment
23.6 Notwithstanding the provisions of clause 23.1 the lay-time on late arriving
vessel shall commence when the vessel berths.
23.7 Demurrage costs resulting from cascading effect caused by late delivery of the
BPS vessel shall be borne by the Supplier of the late delivery vessel.
23.8 For purpose of this contract, the cascading effect shall be limited to a maximum
of three subsequent vessels which will discharge products after the late delivery
vessel. For the purpose of this clause vessels shall include non BPS vessels.
23.9 For purposes of ensuring efficient and effective BPS, the Agency shall take
necessary measures to minimize cascading effects.
23.10 Priority on berthing for discharge shall be given to CPP vessels that shall arrive
within the contracted delivery date range.

142
 23.11 Any vessel arriving after the last date of the allocated delivery date range shall
berth and discharge if at all she will not interfere with the next vessel. Otherwise
she shall to wait on queue until when there is a window for berthing to
discharge.
23.12 AGENCY reserves the right to allow priority berthing in consultation with other
government authorities for national interest.

24.0 DELIVERY DEFAULT

24.1 Delivery default shall be deemed to have occurred if vessel does not arrive and
Tender Notice of Readiness to discharge at Dar es salaam within seven (7)
consecutive calendar days after the last day of the delivery date range, in which
case the Purchaser shall be relieved of its obligation to buy the cargo and the
Agency reserves the right to encash the Supplier’s Performance Security Bond.
24.2 The Supplier can demonstrate that there is a planned delivery by providing
copies of the undermentioned documents to the Agency on the first day of
delivery date range:
a) Bill of Lading,
b) Certificate of quality and quantity,
c) Vessel NOR at the load port, and
d) Load port statement of facts.

Provided that submission of the above required documents shall not relieve
the Supplier to pay late delivery penalty.

24.3 In the event that Supplier cannot provide the required documents as per clause
24.2 above to the Agency, the Agency may call an emergency tender to
substitute the defaulted cargo. The Supplier shall be considered to have
distorted BPS and shall be liable to the fines and penalties as provided by the
laws governing importation of JET A-1 & IK in Tanzania through Bulk
procurement system
24.4 In addition to penalties provided in clause 24.3 the defaulting Supplier shall be
barred from participating in Petroleum Bulk Procurement System as Supplier for
three (3) consecutive tenders.
24.5 In addition, the Supplier shall be responsible for all direct cost associated with
product delivery outside the allocated delivery date range. For purpose of
clarification direct cost shall mean extra freight and premium for an emergency
cargo.

143
25.0 PERFORMANCE SECURITY BOND
25.1 Within nine (9) calendar days after receipt of the Notice of Award from the
Agency, the Supplier shall issue a Performance Security Bond in the form of a
bank guarantee as per format specified by the Agency in the tender documents
and which shall be valid for the whole duration of the Contract period.
25.2 Failure to comply with the requirement to provide Performance Security Bond
as stated in Clause 24.1 above, shall constitute sufficient grounds for
withdrawing the Notice of Award and forfeiture of the bid bond in which case
the Agency may call for an emergency tender or award the tender to the second
lowest responsive bidder.
25.3 It is the responsibility of the Supplier to make sure that the performance bond
is valid throughout the contractual period. For the purpose of this clause
contractual period means the whole duration when there are pending
obligations to be performed by the Supplier.
25.4 If at the time when the Supplier’s performance bond is supposed to be cashed
it is established that the same has expired, the Supplier shall be required to
make payment by way of bank transfer within five (5) calendar days to be
computed from the date on which the performance security bond was supposed
to be cashed.
25.5 If the supplier has refused to submit the performance bond as required by
clause 25.4 the Agency has the right to use existing valid performance bond
issued by the supplier for any other tender to cover cost associated with this
contract.
25.6 Performance bond issued in relation to this contract can be used to cover cost
related to the supplier’s performance in other contracts.

26.0 GENERAL PENALTY FOR NON-PERFORMANCE

26.1 Notwithstanding any provision of this contract the Supplier or Purchaser shall
not be allowed to participate in the next tender, if there are pending obligations
resulting from this tender or previous tender, provided that a proper notice has
been issued asking the supplier or purchaser to fulfill the contractual obligation
and has not acted based on the issued notice.
26.2 The supplier or purchaser shall be allowed to participate in the next tender upon
fulfillment of the contractual obligations.

27.0 DISPUTE RESOLUTIONS

27.1 Notwithstanding any dispute the Supplier shall be required to continue without
delay to supply products in accordance with the terms of this agreement.

144
27.2 If at any time during the continuance of this Contract any dispute, difference
or question relating to the construction, meaning or effect of this Contract
or of any of the clauses herein shall arise between the parties, then the
aggrieved or affected party shall give written notice of not less than 72 hours
to the other party of such dispute, difference or questions.
27.3 Parties shall be required to settle their dispute amicably within 15 days of the
occurrence or commencement of the amicable dispute resolution, if the parties
fail to settle the dispute amicably parties shall refer the disputes for arbitration.
27.4 If parties fail to settle the dispute amicably, such dispute shall be referred to
arbitration within ninety (90) days from the date it has been established that
parties have failed to resolve the dispute amicably
27.5 The arbitration shall be resolved with its seat in Dar es Salaam Tanzania or any
other place mutually agreed by both parties conducted in English language by
three arbitrators pursuant to the rules of the ICC unless the parties agree
otherwise.
27.6 Where a dispute between the Parties is solely of a technical nature, the Parties
shall have the option of referring such dispute to an Expert in accordance with
Clause 27.7 below.
27.7 If either Party gives notice in writing to the other of its intention to refer a
dispute to an Expert for determination, the following shall apply:
a) Parties shall seek to mutually agree in good faith on the appointment
of such Expert. The Expert shall be an appropriately qualified and
experienced professional who is knowledgeable regarding the
international JET A-1 & IK industry and is technically competent in
the area of the subject of the dispute to act as the Expert; and

b) Failing agreement by the Parties regarding the appointment of the

Expert within fourteen (14) days of the above notice, the matter
shall be refereed to full process for the matter to be referred to
arbitration

c) If the appointment of an Expert is agreed by the Parties:

i. the Parties shall provide their submissions and supporting
information with respect to the dispute to the Expert within
fourteen (14) days of the date of the appointment of the
Expert;

ii. the Expert shall resolve or settle such dispute taking due and
proper account of the submissions of the Parties and shall
render his decision in respect thereof within twenty-eight (28)
days following the date of the appointment of the Expert;

145
 iii. the Expert shall be given all reasonable access to the
relevant documents and information relating to the dispute,
and access to the Delivery Point and sampling, weighing,
measurements and other data as the Expert shall reasonably
require;

27.8 Any decision of the Expert shall be final and binding on the Parties except in
the case of fraud or manifest error, in which case such alleged fraud or manifest
error by the Expert shall be dealt with in accordance with the law of United
republic of Tanzania.
27.9 The costs of the Expert in settling or determining a dispute shall be borne by
the losing Party unless the Expert determines otherwise.
27.10 The Agency shall lodge claims and take legal measures against the supplier on
behalf of the buyers, however on special circumstances the Agency may allow
buyers to personally lodge claims or take legal measures against the supplier
and shall notify the supplier accordingly.
27.11 The supplier may decide to lodge claims or take legal measures against
individual buyers without including the Agency, however before doing so the
Agency shall be notified and be given the option to be included in the dispute.

28.0 FORCE MAJEURE

28.1 Neither Supplier nor Purchaser shall be liable for damages or penalties for
any failure or delay in performance of any obligation (except the obligations to
make payment of any money due under this Agreement), where such failure or
delay is caused by force majeure, being any event, occurrence or circumstance
reasonably beyond any control of that party.
28.2 For the purposes of this Agreement Force Majeure shall be limited to failure or
delay caused by or resulting from: -
a) piracy attacks, fires, wars (whether declared or undeclared), riots within
the areas of operation, embargoes, accidents, restrictions imposed by
any governmental authority independent of the Parties (including
allocations, priorities, requisitions, quotas and price controls).
b) acts of God, earthquake, flood, fire or other natural physical disaster,
named storms, hurricanes, typhoons and the like, but excluding other
weather conditions, regardless of severity.
28.3 In the event that a Force Majeure situation exists and this is preventing or
delaying performance of any obligations under this Agreement the Party giving
the notice of the occurrence of force Majeure event shall use reasonable
endeavors to minimize the effect of such Force Majeure and shall provide proof

146
 of efforts taken to minimize the effects of force Majeure in the performance of
the contract. Failure to do so shall preclude the Party from subsequently
claiming that the performance was prevented or delayed by such an occurrence.
28.4 If either of the Parties is prevented from, or delayed in, performing any of its
obligations under this Agreement by Force Majeure (as defined above) and
which, by the exercise of reasonable diligence, the said Party is unable to avoid,
prevent or provide against, then it must promptly notify the other Party in
writing of the circumstances constituting the Force Majeure ( with supporting
evidence of the occurrence of force majeure event) and of the obligation the
performance of which is thereby prevented or delayed and, to the extent
possible, inform the other party of the expected duration of the force majeure
event. Failure to do so shall preclude the Party from subsequently claiming that
the performance or progress of the Work or any part thereof was delayed by
such an occurrence.
28.5 If either of the Parties is prevented from, or delayed in, performing any of its
obligations under this Agreement by Force Majeure (as defined above), the time
of Supplier to make, or Purchaser to receive, delivery hereunder shall be
extended during any period in which delivery shall be delayed or prevented by
reason of any of the foregoing causes up to a total of ten (10) days. If any
delivery hereunder shall be so delayed or prevented for more than ten (10)
days, either party may terminate this contract with respect to such delivery
upon written notice to the other party.

29.0 WAIVER AND SEVERABILITY OF LIABILITY

29.1 Any waiver or concession that may be granted by a party (ies) hereto in regard
to any of terms and conditions of this Contract shall not in any way affect or
prejudice that party’s rights herein.
29.2 All such waivers or concessions may be withdrawn at any time without prior
notice. No waiver by either party of any breach of this contract shall be
considered as a waiver of any subsequent breach of the same or any provision.

30.0 ASSIGNMENT
30.1 No party shall assign this contract in whole or in part without written consent
to the other party except to an affiliate, however, the assignor will remain liable
for the assignee’s full performance.
30.2 AGENCY shall represent/ act for and on behalf of the receivers in any dispute
which shall arise under the importation of petroleum product through the bulk
procurement system provided that the dispute shall involve all receivers
participated in a particular tender. Any claim involving individual receiver or a
group of receivers shall be handled by the respective receivers in person.
147
 30.3 The AGENCY before instituting any legal proceeding shall consult the Solicitor
General. The solicitor General my based on the powers conferred to him under
order 4 (1) of the Office of the Solicitor General (Establishment) order, GN. No.
50 of 2018 intervene on any legal proceeding instituted or intended to be
instituted by the Agency.

31.0 ENTIRE CONTRACT AND DURATION

31.1 This Contract is the entire Agreement between the parties and supersedes all
prior Agreements and understandings whether written or oral.
31.2 This Contract shall not be varied or amended in any way except in writing signed
by representatives of all the parties’ signatories herein. It shall remain
enforceable on the day of its signature by all parties herein, and it shall remain
in force and effect until amended or ended by a written signed by all the parties’
signatory herein.
31.3 In case of any conflict and or difference between this Contract and any other
document in the bid document, the provisions of this Contract shall prevail.

32.0 COMMUNICATIONS
32.1 All communications shall be deemed having been made on the date on which
they have been sent when using email which shall be the preferred mode of
communication given the number of parties concerned.
32.2 The Supplier shall be required to have a local representative in Tanzania
throughout the duration of the tender.
32.3 Communications to the Supplier shall be sent to the email addresses notified
on the date of award.
32.4 Communications to the Agency shall be sent to the following addresses:

EXECUTIVE DIRECTOR
PETROLEUM BULK PROCUREMENT AGENCY
P.O. Box 2634
Dar es Salaam
Tel. +255 22 2128 885
Fax +255 22 2128 886
[email protected]

33.0 GOVERNING LAW

33.1 This contract shall be construed in accordance with and governed by the laws
of Tanzania.

148
 33.2 The arbitration shall be governed by the International Arbitration Rules
(International Chamber of Commerce – Arbitration and ADR Rules).

34.0 GENERAL
34.1 To the extent that the incoterms are not in conflict with the terms of this
Contract, the parties hereby agree to be bound by the DAP Incoterms and
amendments thereof.

35.0 DECLARATIONS
35.1 Parties signatory to this contract declare that, they will adhere to this contract
as well as to The Petroleum Act No. 21 of 2015 and the Petroleum (Bulk
Procurement) Regulation, 2017 (G.N. No. 198 of 2017)
35.2 We, the undersigned, duly authorized by our respective companies, hereby
agree to the provisions of this contract:
IN WITNESS WHEREOF, the authorized representatives of the Parties hereto have
executed these presents in the manner and on the dates hereafter appearing:

SIGNED and SEALED with the common

Seal of PETROLEUM BULK PROCUREMENT AGENCY
This ………………………….
SEAL
IN THE PRESENCE OF:

NAME: ………………………….
SIGNATURE: ………………………….
POSTAL ADDRESS: 2634 DAR ES SALAAM
QUALIFICATION: ………………………….

NAME: ………………………...
SIGNATURE: ………………………….
POSTAL ADDRESS: 2634 DAR ES SALAAM
QUALIFICATION: …………………………..

SIGNED and SEALED with the common

Seal of ………………………………..
This ………………………….
SEAL
IN THE PRESENCE OF:

149
NAME: ………………………………………
SIGNATURE: ………………………………………
POSTAL ADDRESS: ………………………………………
QUALIFICATION: ………………………………………

NAME: ………………………………………
SIGNATURE: ………………………………………
POSTAL ADDRESS: ………………………………………
QUALIFICATION: ………………………………………

ANNEXURE SSC 01.

Counterparty Details
P.O. Box
Dar Es Salaam
Tanzania

Commercial Invoice

Invoice No (Invoice Reference)

Our Ref (Tba)
Position (Tba)
Geneva (Date)
Trade Type Physical
Book Month (Month Of Booking)

Quality
Quantity Bl
Quantity Ship Before
Discharge
Conv Factor Bl
Conv Factor Disport’
Shipped Via
Delivery
Disport
B/L Date
Cod Date

Unit Price Bl
Unit Price Ship Fig

Premium

150
Final Unit Price Bl
Final Unit Price Ship
Fig

Final Amount Bl
Final Amount Ship Fig

Total Amount Due To (Company Name) Usd

ANNEXURE SSC 02

PROPOSED LETTER OF CREDIT FORMAT

AS PER YOUR REQUEST, PLEASE FIND HERE BELOW OUR LETTER OF CREDIT FORM

27: SEQUENCE OF TOTAL: 1/1

40A: FORM OF DOCUMENTARY CREDIT/ IRREVOCABLE

20: DOCUMENTARY CREDIT NUMBER

31C: DATE OF ISSUE

40E: APPLICABLE RULES / UCP LATEST VERSION

31D: DATE AND PLACE OF EXPIRY

51A: APPLICANT BANK

(INSERT SWIFT CODE)

50: APPLICANT;

59: BENEFICIARY:

32B: CURRENCY CODE, AMOUNT:

151
39A: PERCENTAGE CREDIT AMOUNT TOLERANCE ON QUANTITY AND VALUE ARE
ACCEPTABLEI: …….

41A: AVAILABLE WITH/BY: CONFIRMING BANK OR ADVISING BANK COUNTERS

42P: DEFERRED PAYMENT TERMS: BY DEFERRED PAYMENT 60 CALENDAR DAYS

FROM THE FIRST DAY OF DELIVERY AGREED DELIVERY DATE RANGE (1ST DAY
OF DELIVERY DATE RANGE TO COUNT AS DAY ONE)

43P: PARTIAL SHIPMENTS

NOT ALLOWED

43T: TRANSHIPMENT
ALLOWED
44E: PORT OF LOADING:

44F: PORT OF DISCHARGE:

44B: PLACE OF FINAL DELIVERY /DESTITATION:

45A: DESCRIPTION OF GOODS AND/OR SERVICE:

46A: DOCUMENTS REQUIRED: DOCUMENTS IN ONE ORIGINAL AND ONE

COPY/PHOTOCOPY, UNLESS OTHERWISE STATED:

1. COMMERCIAL INVOICE
2. CERTIFICATE OF ORIGIN (COPY/ FAX COPY ACCEPTABLE)
3. CERTIFICATE OF QUALITY ISSUED ON ARRIVAL AT DISPORT BASED ON
SHIP'S TANK'S COMPOSITE SAMPLE ISSUED BY INDEPENDENT
INSPECTOR AND TBS (COPY/FAX COPY ACCEPTABLE)
4. CERTIFICATE OF QUANTITY ISSUED ON VESSELS ARRIVAL QUANTITY AT
DISPORT ISSUED BY INDEPENDENT INSPECTOR (COPY /FAX COPY
ACCEPTABLE)

IN THE EVENT THE ABOVE MENTIONED DOCUMENTS ARE NOT AVAILABLE AT TIME OF
L/C UTILISATION, THEN PAYMENT IS TO BE MADE AGAINST PRESENTATION OF:

A. SIGNED COMMERCIAL INVOICE (FAX/PDF EMAIL COPY ACCEPTABLE)

AND

B. SELLER'S LETTER OF INDEMNITY ISSUED BY THE BENEFICIARY IN THE

FORMAT BELOW (FAX/PDF EMAIL COPY ACCEPTABLE)

-QUOTE-

152
FROM :

TO

DATE

LETTER OF INDEMNITY

DEAR SIRS,

WE REFER TO A CARGO OF METRIC TONS OF ... ("CARGO") ... SHIPPED ON

BOARD THE TANKER... ("NAME”) ... FOR DELIVERY AT ("DISCHARGE PORT")

ALTHOUGH WE HAVE SOLD AND TRANSFERRED TITLE OF SAID CARGO TO YOU, WE

HAVE BEEN UNABLE TO PROVIDE YOU WITH THE FOLLOWING DOCUMENTS:

1. CERTIFICATE OF ORIGIN (COPY / FAX COPY ACCEPTABLE)

2. CERTIFICATE OF QUANTITY ISSUED ON VESSELS ARRIVAL QUANTITY AT
DISPORT ISSUED BY INDEPENDENT INSPECTOR (COPY /FAX COPY ACCEPTABLE)
3. CERTIFICATE OF QUALITY ISSUED ON ARRIVAL AT DISPORT DISPORT BASED
ON SHIP'S TANK'S COMPOSITE SAMPLE ISSUED BY INDEPENDENT INSPECTOR
AND TBS (COPY / FAX COPY ACCEPTABLE)

('THE DOCUMENTS') COVERING THE SAID SALE

IN CONSIDERATION OF YOUR PAYING THE FULL PURCHASE PRICE OF U.S. DOLLARS

... ("INVOICED AMOUNT") ..., WE HEREBY EXPRESSLY WARRANT THAT WE HAVE GOOD
AND MARKETABLE TITLE TO THE GOODS, AND THAT WE HAVE FULL RIGHT AND
AUTHORITY TO TRANSFER SUCH TITLE TO YOU AND TO EFFECT DELIVERY OF THE
SAID CARGO.

WE FURTHER AGREE TO MAKE ALL REASONABLE EFFORTS TO OBTAIN AND

SURRENDER TO YOU AS SOON AS POSSIBLE THE DOCUMENTS. WE IRREVOCABLY
UNDERTAKE TO PROTECT, INDEMNIFY AND SAVE YOU HARMLESS FROM AND AGAINST
THE DAMAGES, COSTS AND EXPENSES WHICH YOU MAY SUFFER BY REASON OF THE
DOCUMENTS REMAINING OUTSTANDING, OR BREACH OF THE WARRANTIES GIVEN
ABOVE.

OUR OBLIGATION TO INDEMNIFY SHALL BE GOVERNED BY THE SHIPPING AND

SUPPLY CONTRACT BETWEEN OURSELVES AND THE PETROLEUM BULK PROCUREMENT
AGENCY HOWEVER YOU SHALL BE REQUIRED TO GIVE US NOTICE OF
ASSERTION OF ANY CLAIM(S) AND FULL OPPORTUNITY TO
CONDUCT THE DEFENCE THEREOF AND THAT YOU SHALL NOT SETTLE ANY
SUCH CLAIM(S) WITHOUT OUR APPROVAL.

THIS LETTER OF INDEMNITY SHALL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE LAW WHICH GOVERN THE SHIPPING AND SUPPLY

153
CONTRACT BETWEEN OURSELVES AND PETROLEUM BULK PROCUREMENT AGENCY
(THE LAWS OF TANZANIA). ANY DISPUTES, CONTROVERSIES OR
CLAIMS ARISING OUT OF OR IN RELATION TO THIS LETTER OF INDEMNITY OR
THE BREACH, TERMINATION OR INVALIDITY THEREOF SHALL BE SUBJECT TO
DISPUTE RESOLUTION MECHANISM PROVIDED IN THE SHIPPING AND SUPPLY
CONTRACT BETWEEN OURSELVES AND THE PETROLEUM BULK PROCUREMENT
AGENCY.

THIS LETTER OF INDEMNITY SHALL EXPIRE SIX MONTHS AFTER THE ISSUING
DATE OR UPON OUR PRESENTATION OF THE SHIPPING DOCUMENTS TO YOU, OR
UPON RECEIPT AND ACCEPTANCE OF THE PRODUCT WHICHEVER OCCURS FIRST.

... ………. ("COMPANY")

...
AUTHORISED SIGNATORY/IES

-UNQUOTE-

47A: ADDITIONAL CONDITIONS:

1. BENEFICIARY IS ALLOWED TO INVOICE WITHIN THE OVERALL LC AMOUNT, USD

1.00 PER METRIC TON TO COVER PROVISIONAL DEMURRAGES

2. THIRD PARTY DOCUMENTS ARE ACCEPTABLE, EXCEPT COMMERCIAL INVOICE

AND LETTER OF INDEMNITY.

3. TYPOGRAPHICAL AND/OR SPELLING ERRORS, EXCEPT ON FIGURES AND

AMOUNT, ARE NOT TO BE CONSIDERED AS DISCREPANCIES.

4. IF PAYMENT DUE DATE IS ON A SUNDAY OR A MONDAY BANK HOLIDAY IN

NEW YORK, PAYMENT WILL BE EFFECTED ON THE FOLLOWING BANKING DAY.
IF PAYMENT DUE DATE IS ON A SATURDAY OR A BANK HOLIDAY OTHER THAN
A MONDAY IN NEW YORK, PAYMENT WILL BE EFFECTED ON THE PRECEDING
BANKING DAY PRIOR TO DUE DATE.

5. DOCUMENTS DATED PRIOR TO LC ISSUANCE ARE ACCEPTABLE.

6. DOCUMENTS WITH A DIFFERENT NAME BUT SERVING THE SAME PURPOSES ARE
ACCEPTABLE, EXCEPT SIGNED COMMERCIAL INVOICE AND LETTER OF
INDEMITY.

7. DOCUMENTS UNDER THIS L/C MAY BE DISCOUNTED AT BENEFICIARY'S

REQUEST AND EXPENSE

154
 8. IN CASE OF ANY AMOUNT IN FAVOUR OF THE APPLICANT, SUCH AMOUNT WILL
BE SETTLED WITHIN THE LC

9. DOCUMENTS SHOWING DIFFERENT QUANTITIES OTHER

THAN INVOICE ARE ACCEPTABLE PLUS OR MINUS 5 PERCENT TOLERANCE.

71B: CHARGES FOR ESTABLISHING THE LC ARE FOR THE ACCOUNT OF THE
APPLICANT, LC ADVISING CHARGES, CONFIRMATION CHARGES
AMENDMENT CHARGES, DISCREPANCIES CHARGES AND ANY OTHER
CHARGES (IF ANY) ARE FOR THE ACCOUNT OF THE BENEFICIARY.

48: PERIOD FOR PRESENTATION: DOCUMENTS PRESENTED LATER THAN 21

DAYS AFTER DELIVERY DATE, BUT WITHIN VALIDITY OF THE CREDIT ARE
ACCEPTABLE.

49: CONFIRMATION INSTRUCTION: CONFIRM / ()

53A: REIMBURSING BANK: (REIMBURSING BANK SWIFT CODE)

57A: ADVISE THROUGH' BANK: TO BE ADVISED CASE BY CASE (AS PER PFI)

78: INSTRUCTIONS TO PAYING/ACCEPTING/NEGOTIATING BANK: (TO BE

INSERTED BY THE BANK) ...

UPON RECEIPT OF YOUR DULY AUTHENTICATED SWIFT CONFIRMING

THAT YOU HAVE TAKEN UP COMPLIANT DOCUMENTS WITH L/C TERMS
AND CONDITIONS, WE SHALL COVER YOU ACCORDING TO YOUR
INSTRUCTIONS AT MATURITY DATE.

72: SENDER TO RECEIVER INFORMATION: DOCUMENTS TO BE SENT BY

SPECIAL COURIER TO THE FOLLOWING ADDRESS ;( ISSUING BANK
NAME+ ADDRESS TO BE INSERTED)

UNQUOTE

155
38. APPENDIX 5 IMPORTATION AGREEMENT BETWEEN THE AGENCY AND
OMC

IMPORTATION CONTRACT

BETWEEN

PETROLEUM BULK PROCUREMENT AGENCY (PBPA)

AND

…………………………………….

156
 IMPORTATION CONTRACT

Made under Regulation 5 (C) and 17(2) of the Petroleum (Bulk Procurement) Regulations,
2017 (Government Notice No. 198

This Agreement is made this………………………. day of …………........................... 2019

BETWEEN

PETROLEUM BULK PROCUREMENT AGENCY of P.O Box 2634, Dar es Salaam, the
executive agency established by Government Notice No. 423 OF 2015, having its
registered office at TPA- ONE STOP CENTER BUILDING, 11TH Floor, Plot no. 1/2,
SOKOINE DRIVE, hereinafter referred to as “the AGENCY.
AND

……………………………………………………… Dar es Salaam Tanzania. (Hereinafter to be

referred to as “OMC”).

WHEREAS

The Oil Marketing companies (OMCs) are required by Government Notice Number NO.
198 of 2017 and Petroleum Act No. 21 of 2015 to import petroleum products through the
Bulk Procurement System.

WHEREAS

PBPA under Regulation 5 of the petroleum (Bulk Procurement) Regulations, 2017 GN No.
198 is mandated to:

(a) collect the procurement requirements of petroleum products from OMCs;

(b) ensure that before accepting the procurement requirement by OMCs, all
levies and fees charged by the Government institutions are fully paid;
(c) conclude and administer contracts with suppliers and between the Agency
and OMCs;
(d) conduct an International Competitive Bidding for the procurement of
petroleum products in bulk;
(e) report to the Ministry and on Agency’s activities on a monthly basis or as
may be required by a Ministry;
(f) prepare plans and a budget to cover its operations;
(g) relay information, in a timely manner, related to the petroleum business to
the Authority, OMCs, ministry responsible for petroleum affairs, TRA, TPA,
TBS, WMA and other relevant parties when requested;
(h) forecast supply and demand of petroleum products;
(i) coordinate diligent receipts by OMCs of petroleum products from the
delivery vessels;

157
 (j) maintain records of the shipments and performance;
(k) coordinate invoicing and collection of payments for the respective shares
of petroleum products imported by an OMC;
(l) appoint, an independent inspector to ensure delivery of acceptable quantity
and quality of a petroleum product;
(m) issue directives and undertake any function that aims at improving
efficiency procurement of petroleum products;
(n) Liaise with the Authority on issues related to the importation of petroleum
products;
(o) Report to the minister and the Authority on Agency’s activities on monthly
basis or as may be required.

WHEREAS

An OMC intending to buy petroleum or petroleum product is required by Regulation 5 (C)

and 17 (2) of the Petroleum (Bulk Procurement) Regulations, 2017 GN No. 198 to
conclude with PBPA, a importation and supply of petroleum product contract, a contract
which shall regulate the relationship between the OMC and PBPA.

BOTH PARTIES AGREE THAT, OMC and PBPA shall be bound by the terms and
conditions of the Shipping and Supply contract, entered between PBPA and the Supplier.

NOW, THEREFORE in consideration to the mutual agreement, promises and covenants

and conditions herein contained, and the other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be legally
bound, the parties hereby agree as follows:

1. EFFECTIVE DATE

1.1 The Agreement shall come into effect on and shall remain in force
throughout the Execution of the Bulk Procurement System (BPS) unless the
OMC can no longer participate in the BPS because that OMC has been
disqualified by the PBPA, the relevant license has been revoked by the
Authority, has been wound up or has been terminated as per the terms of
this contract.

2. ABBREVIATION, DEFINITION AND INTERPRETATION

2.1 The following abbreviation shall have the meanings provided hereunder

Bbls @60oF Barrels at 60º Fahrenheit

B/L Bill of Lading
BPS Bulk Procurement System

COD Completion of Discharge

CPP Clean Petroleum Product

COQ Certificate of Quality

DAP Delivery at Port (SPM Dar, KOJ 1 Dar, Tanga, Mtwara)

158
 DISPORT Discharge Port

EWURA Energy and Water Utilities Regulatory Authority

FOB Free on Board

ICC International Chamber of Commerce

INCOTERMS International Commercial Terms (Set by International
Chamber of Commerce, U.K)
IFIA International Federation of Inspection

KOJ Kurasini Oil Jetty

L/C Letter of Credit

LIBOR London Inter-Bank Borrowing Official Rates

MT Metric Tonnes

NOR Notice of Readiness

OMC Oil Marketing Company

SBM Single Buoy Mooring

SHINC Saturday, Sunday, Holidays Included

PFI Pro Forma Invoice

TASAC Tanzania Shipping Agency Corporation

TBS Tanzania Bureau of Standards

TPA Tanzania Port Authority

TRA Tanzania Revenue Authority

TT Telegraphic Transfer

USD United States Dollar

WMA Weights and Measure Agency

2.2 The following terms shall have the meaning provided below:

2.2.1. “AGENCY” shall mean the Petroleum Bulk Procurement Agency

2.2.2. “Applicable law” means any principal law, convention or treaty that is
customarily treated in Tanzania as having legally binding force relevant to
matters pertaining to the procurement and supply of a Bulk Petroleum and
Petroleum Products in Tanzania.
159
2.2.3. “Approved specification” means any specification or standard issued by TBS
2.2.4. “Authority” means the Energy and Water Utilities Regulatory Authority.
2.2.5. “Bulk Procurement System” means a system established to govern
importation of a Bulk Petroleum Products into Tanzania.
2.2.6. “Cargo” shall mean a specific delivery/shipment of refined product of
Industry Import.
2.2.7. “Cleared Funds” shall mean payments confirmed by Supplier’s Bank as
received either through Electronic Funds Transfers (EFT) or Letter of
Credit.
2.2.8. “Commitment Agreement” means a commitment to procure the requested
volume of petroleum products under the BPS by the OMC as per terms of
this contract and the contract between the supplier and PBPA.
2.2.9. “Delivery Date Range” shall mean the dates of delivery.
2.2.10. “Effective Date” shall mean the date of the execution of the contract.
2.2.11. “Financial hold product” shall mean a product which has not been secured
by purchaser either by way of letter of credit or Electronic Funds Transfers
(EFT).
2.2.12. “Full Cargo” shall mean total tendered parcel size, with operational
tolerance of+/- 5% at Supplier’s option, which will be allocated in full to
Purchasers prorata based on their placed orders.
2.2.13. “Marine Surveyor” Shall mean Independent Marine Inspection company,
whose ownership is fully disclosed, and is member of IFIA and other
international organizations that provide inspection, testing and certification
of marine services
2.2.14. “OMC” shall mean an Oil Marketing Company signatory to this Contract as
well as Purchaser of petroleum product subject to this Contract.
2.2.15. “Purchaser” shall mean OMC procuring petroleum product under the terms
and condition of this contract, on its own behalf or as bona-fide nominated
agent registered and operating on transit market.
2.2.16. “Product” Shall mean Petroleum Products
2.2.17. “Relevant Authorities” means Government Institution mandated by Law to
administer Government policies and laws governing the operations of the
OMC and/or PBPA.
2.2.18. “Replacement cargo” shall mean a different product which is within the
approved specification imported after the initial import has been declared
off spec as provided in this contract
2.2.19. “Safe berth” shall mean a berth which vessels so conforming, and having
any beam, can at all times safely reach and leave and at which such
vessels can lie at all times safely afloat.

160
2.2.20. “Supplier” shall mean an entity selected by PBPA to import petroleum
products in bulk quantity.
2.2.21. Supplies Contract” means the contract between PBPA and the Supplier for
the supplies of Bulk Petroleum Products under the BPS.
2.2.22. “Tender” shall mean an invitation to treaty/contract to supply Petroleum
Products under the Bulk Procurement System.

2.3 Interpretations

(a) General rules of Interpretation

(i) This contract is to be interpreted according to the common

intention of the parties even if this differs from the normal
meaning of the expressions used in it.
(ii) Where one party intended an expression used in the contract
to have a particular meaning, and at the time of the
conclusion of the contract the other party was aware, or could
be expected to have been aware, of this intention, the
expression is to be interpreted in the way intended by the
first party.
(iii) Unless otherwise provided in paragraphs (1) and (2), the
contract is to be interpreted according to the meaning which
a reasonable person would give to it in the circumstances of
the same nature.
(iv) This contract is to be interpreted autonomously and in
accordance with its objectives and the principles underlying
it.
(v) Issues within the scope of this contract but not expressly
settled by it are to be settled in accordance with the principles
underlying it with recourse to the law that would be applicable
in the absence of an agreement to use this instrument or to
any other law.
(vi) Where there is a general rule and a special rule applying to a
particular situation within the scope of the general rule, the
special rule prevails in any case of conflict.
(vii) Where the contents so requires, words in this agreement
importing the singular shall also include the plural and vice
versa, words importing the masculine gender shall include the
feminine and persons shall include firms or corporations and
vice versa.
(viii) As the content requires, words such as person, entities and
parties may refer to individuals, PBPA, companies, service
providers, joint ventures, corporate bodies, government
organisations, or institutions having a legal capacity.
(ix) Wherever in the contract, provision is made for the giving or
issuing any notice, consent, approvals, certifications or
determinations by any person, unless otherwise specified,
161
 such notice, consent, approval, certification, determination,
or request shall be in writing and the words “notify”, “no
objection”, “approve”, “certify”, “determine”, or “request”
shall be construed accordingly.
(x) Index headings and sub-headings to Articles and sub-articles
in this agreement are inserted for convenience only and shall
not be taken into consideration in the interpretation of this
agreement.
(xi) The Agreement has been written in and shall be interpreted
and construed in accordance with the English language.
(xii) All communication and documentation between the OMC and
PBPA whether written or oral related to this agreement shall
be in English Language.
(xiii) All requests, instructions, notifications, agreements,
authorisations and acknowledgements hereunder shall be in
writing, by an Authorised Representative of the applicable
Party.
(xiv) Any review, Approval or acknowledgements by the OMC or
PBPA shall not relieve the other party from any liability or
obligation under this Agreement unless clearly stated to the
contrary herein.
(xv) Reference to any statute, statutory provision or statutory
instrument shall include a reference to that statute, statutory
provision or statutory instrument as from time to time
amended, extended or re-enacted.
(xvi) The several documents comprising this Agreement are to be
taken as mutually explanatory, however in the event of any
conflict or ambiguity in any of the requirements or in the
interpretation of this Agreement, the order of precedence
shall prevail.
(xvii) The words “agreement” and “contract” shall be used
interchangeably unless otherwise where the content so
requires.

(b) Relevant matters; in interpreting this contract regard may be had,

in particular, to:

(i) the circumstances in which it was concluded, including the

preliminary negotiations and correspondences (letters and
emails) in relation to this agreement.
(ii) the conduct of the parties prior and subsequent to the
conclusion of the contract.
(iii) the interpretation which has already been given by the parties
to expressions which are similar to those used in the contract.
(iv) practices which the parties have established between
themselves.
(v) the meaning commonly given to expressions in the branch of
activity concerned.

162
 (vi) the nature and purpose of the Agreement.
(vii) usages, good faith and fair dealing.

(c) Reference to Agreement as a whole; expressions used in the

Agreement are to be interpreted in the light of the Agreement as a
whole.

3. REGISTRATION AND DEREGISTRATION OF OMCS

3.1 By entering into this agreement the OMC has been registered with the
Agency in accordance with Regulation 6(1) of the Petroleum (Bulk
Procurement) Regulations, 2017 G.N. No. 198 of 2017.

3.2 The OMC shall be deregistered and shall not be allowed to participate in
tenders upon occurrence of either of the undermentioned incidences: -

(a) Upon expiration of OMCs petroleum wholesale license issued

by EWURA; or
(b) revocation of OMCs petroleum wholesale license issued by
EWURA

3.3 If the OMC wish to re-register with the Agency it shall be required to pay
Registration fee and submit all documents as stipulated in the BPS
Implementation manual.

4. WARRANTIES BY OMC

4.1 The OMC represents warranties and covenants to PBPA that:

(a) General

(i) It is a company duly organized and validly existing and in

good standing under the laws of United Republic of Tanzania,
(ii) It is qualified and licensed to do wholesale petroleum
business in good standing by the relevant authorities,

(iii) It has the corporate power and authority to negotiate,

execute, deliver and perform its obligation under this
agreement.

(iv) It has the financial capabilities to meet all the contractual

obligations as per the ordered quantities of petroleum
products.

(b) Law Compliance

It complies with all applicable Laws in the United Republic of
Tanzania.

(c) Warranty Length

163
 Throughout the existence of this Agreement the OMC confirms to
abide and or adhere to the terms of this Agreement and the Shipping
and Supply Contract entered between PBPA and the Supplier.

(d) Infringement
The OMC participating in this Agreement and the Shipping and
Supply Contract between PBPA and the Supplier do not violate any
patent, trade secret, or other intellectual property or proprietary
rights of any third party.

(e) No Litigation
There is no actual or threatened litigation that affects its ability to
comply with:

(i) this Agreement, or

(ii) The Shipping and Supply Contract between PBPA and the
Supplier.
5. QUANTITY

5.1 The quantity to be supplied under the Shipping and Supply Contract shall
be a full cargo as per delivery date range in the price, quantity & delivery
schedule, prorated to each OMC that has placed orders for product on
the delivering vessel.

5.2 Minimum Batch per vessel for each OMC shall be 500 MT

5.3 Minimum Batch per receiving terminal shall be 1000 MT

5.4 Minimum order per delivery month shall be 1000

MT for Mogas and Gasoil and 500 MT for JET A1& IK.

6. PAYMENT IN RELATION TO THE PROCURED PRODUCTS AS PER THE

SHIPPING AND SUPPLY CONTRACT BETWEEN PBPA AND THE SUPPLIER.

6.1 The OMC shall be responsible for arranging its own financing of the
petroleum products purchased through the bulk procurement system;

6.2 The OMC shall open a letter of credit to the supplier’s banker or facilitate
pre-payment in respect of the local cargo imported through Bulk
Procurement System;

6.3 For transit cargos the OMC shall ensure the consignee(s) has/have
opened letter(s) of credit to the supplier’s banker or facilitate pre-
payment in respect of their imported cargos;

6.4 The OMC is not allowed to open LC for transit cargoes however the OMC
shall be liable for any default made by the consignee of transit
164
 consignment. OMC liability shall be based on the principle agent
relationship

6.5 Failure for OMC to fulfil contractual financial obligation as per provisions
of Shipping and Supply Contract as well as Importation Contract between
OMC (the Purchaser) and the Agency, OMC shall be dealt with as per
terms and conditions of the Shipping and Supply Contract and the
Regulations in place;

6.6 The OMC and PBPA agree to be bound by the terms of the Shipping and
Supply Contract between PBPA and the Supplier in the following manner:

(a) OMC shall latest five (5) calendar days before 1st day of delivery
date range or latest five (5) calendar days after receipt of the needed
documents from the Supplier provide an irrevocable L/C opened by
the OMC’s Bank but confirmed by Bank provided by the Supplier.
The Supplier shall provide to the Agency a list of minimum 10
confirming banks before signing the contract as provided in the
Notice of Award;
(b) Charges for establishing the L/C will be borne by the OMC;
(c) All commissions and charges from the issuing bank shall be borne
by applicant (OMC). All commissions and charges from the
confirming and advising bank shall be borne by beneficiary’s
(Supplier’s).
(d) All cost resulting from L/C amendments shall be borne by the party
which caused the amendments to be made. If the L/C amendment
will be caused by factors not caused by the Supplier or the OMC L/C
amendment cost will be shared equally between the Supplier and
the OMC.
(e) OMC who shall prefer to make payments by bank transfer or pre-
payment, the OMC shall effect payments latest three (3) calendar
days before 1st day of delivery date range or latest three (3)
calendar days upon receipt of proforma invoice (PFI) from Supplier
whichever is later.
(f) PBPA shall make sure, the Supplier shall submit the PFI and all
needed documents to the OMC and the Agency latest ten (10)
calendar days before the first day of delivery window to enable the
OMC to open LC or make cash payment within contractual duration.
For purpose of this clause needed documents are;
i. copy of Endorsed Bill of lading
ii. load port certificate of quality
iii. Certificate of origin,

(g) The OMC shall not be held responsible for any delays in opening the
L/Cs or bank transfer or prepayment if such delays have been
caused by the Supplier’s failure to submit the needed documents (to
enable OMCs to open L/C or bank transfer or prepayment) within
the time frame stipulated in this contract.

165
(h) The OMC shall immediately upon receipt of the PFI notify the
Supplier and the Agency on the intention to make bank transfer or
any alternate payment as mutually agreed between Supplier and
OMC.
(i) Payments shall be settled by the OMC or the OMCs parent / Affiliate
companies or any other party duly advised by the OMC.
(j) L/C and bank transfer or prepayment shall be made against
presentation of Supplier’s commercial invoice and certified copies of
shipping documents as provided in the Shipping and Supply Contract
unless mutually agreed otherwise between Supplier and OMC, the
agreement between the supplier and the OMC shall be approved by
PBPA.
(k) PBPA shall ensure the Supplier has lodged the cargo manifest to all
relevant authorities including but not limited to the Agency and
TASAC with endorsed copy of Bill of Lading (for customs purposes
only) five (5) calendar days before the vessel has tendered NOR.
The cargo manifest shall correspond to the PFI and endorsed BL
provided to the Purchasers. Cost of lodging cargo manifest and
issuing of Delivery order shall be borne by the Supplier
(l) Any and all costs or charges or penalties including demurrage
resulting from delays in berthing caused by OMC shall be solely
payable by the OMC.
(m) PBPA shall make sure that any and all cost, charges or penalties
resulting from delays in lodging of the cargo manifest caused by the
Supplier and where such delays result in the OMC’s delay to make
necessary declaration to TRA, TASAC and TPA will be solely payable
by the Supplier.
(n) Invoices issued by supplier shall be raised based on FOB component
plus DAP premiums as stipulated in the Shipping and Supply
Contract and detailing the price computation (including the Platts
quotes as published, the conversion factor utilized and its
computation, quantity at load port and quantity at DISPORT,
supported by documentation stipulated in Shipping and Supply
Contract
(o) Penalty for late payments and any default by the OMCs will be
computed as expressed in the petroleum (Bulk Procurement)
Regulations, 2017 GN. No. 198 of 2017.
(p) All third party charges associated with late payment e.g. TRA Taxes
and Penalties, TPA charges and penalties and storage charges, shall
be on account of the defaulting OMC and will be recovered as per
actual prevailing costs.
(q) The OMC shall be bound by all terms and conditions of the Shipping
and Supply Contract between PBPA and the supplier.

166
7. DELAYS IN MAKING PAYMENTS AND OPENING LETTER OF CREDIT
(LC)

7.1 PBPA and the OMC agree to be bound by the terms of the Shipping and
Supply Contract in the following manner:

(a) If the OMC delays to open LC as stipulated in the Shipping and

Supply Contract between PBPA and the suppliers, the OMC shall be
liable to penalties as stipulated in the Petroleum (Bulk Procurement)
Regulations, 2017 GN. No. 198 of 2017. The penalty is payable to
the Agency for distortion of Bulk Procurement System.
(b) If the OMC fails to pay for its share of a petroleum product at the
due date as per the credit period stipulated in the shipping and
supply contract between PBPA and the supplier, the OMC shall be
charged a late payment penalty of LIBOR +2% per annum be barred
from participating in the following BPS tender or both, the payment
shall be paid to an escrow account operated by the PBPA for onward
payment to the supplier. For the purpose of this clause due date is
60 days after the first day of delivery date range
(c) Notwithstanding other provisions of this agreement the OMC who
fails to pay or open L/C for the ordered product within five (5) days
after COD and the product has been discharged as product on
financial hold, the OMC shall be barred from participating in BPS until
the OMC has fulfilled all pending obligations.

8. PRODUCT DISCHARGED IN THIRD PARTY FACILITY ON INSTRUCTION

FROM PBPA

8.1 The OMC and PBPA mutually agree that;

(a) Where at the time of discharge of petroleum products from the
delivery vessel there is a default in providing the L/C or making bank
transfer or prepayment, (if such delay and or default is not caused
by the Supplier) then the Supplier in consultation with PBPA has the
right to discharge the batch elsewhere as product on financial hold.
(b) In the event the product has been discharged as product on financial
hold, the terminal in which the product has been discharged shall
issue a holding certificate guaranteeing that product will not be
accessible by the OMC until full payment has been done and the
supplier has issued a release certificate.
(c) Storage cost relating from product being discharged as product on
financial hold shall be borne by the defaulting OMC.
(d) When there are ullage constraints as a result of the OMC’s failure to
create sufficient ullage to receive the ordered product, the OMC’s
shall nominate alternative terminal, failure to the OMC shall be
deemed to have distorted BPS, and shall be penalized as prescribed
below;

i. pay penalty of 0.5 USD per MT per day);

167
 ii. pay demurrage caused by the OMC delay to open LC.

(e) Product on financial hold shall be discharged to a terminal nominated

by the supplier.
(f) Where product has been off-loaded as product on financial hold, the
product shall be so offloaded as manifested, however, the OMC shall
be liable to pay storage charges at the rate and terms provided by
the receiving terminal.
(g) Where the product has been offloaded as product on financial hold,
the receiving terminal shall issue a holding certificate to the supplier
with copy to PBPA, the Holding Certificate shall state and guarantee
that no product will be released without written confirmation from
the Supplier and or its financier. Upon receipt of the funds or of
the L/C the supplier or its financier shall issue a release certificate to
the terminal with copy to PBPA.
(h) PBPA shall make sure the Supplier does not prevent from berthing
any vessel due to financial hold or ullage problem to few terminals.
The OMC is required to issue ullage confirmation five (5) days before
the first day of delivery date range. The decision to prevent the
vessel to berth shall be issued by PBPA based on global ullage
situation.
(i) Where the OMC’s product has been offloaded to terminal acceptable
by the Supplier for delay to open LC or making cash payments, the
OMC shall be required to make necessary payments or open LC and
take possession of his product within five (5) calendar days from the
date when the product was discharged into any terminal acceptable
by the Supplier.
(j) Failure to adhere to sub clause 8.1 (i) above, the OMC shall not be
allowed to participate in the next tender until such product has been
fully paid to Supplier including all associated costs with Supplier,
PBPA and the receiving terminal.
(k) If the OMC will not settle his dues within five calendar days from the
date the product was discharged as product on financial hold, the
OMC shall be considered to have distorted BPS and shall be liable to
the fines and penalties as provided by the laws governing
importation of petroleum products in Tanzania through Bulk
Procurement System.
(l) The Agency guarantees that costs incurred by the Supplier or any
receiving terminal resulting from the supplier exercising right to
dispose the product on financial hold shall be settled by cashing the
bank guarantee provided to Agency by the OMC, without prejudice
to the Agency’s, Supplier or receiving terminal’s rights to further
claims or damages from the Purchaser.
(m) In the event that the available bank guarantee is not sufficient to
cover all cost incurred, the supplier or receiving terminal shall be at
liberty to take appropriate legal measures against the OMC.
(n) Payment out of the encashed bank guarantee shall be made to the
beneficiary upon submission of relevant supporting documents.

168
 (o) PBPA shall before cashing the bank guarantee make critical analysis
of the submitted documents and nature of the claim and notify the
OMC of its intention to cash the bank guarantee and the claims to
be covered.
(p) Upon receipt of the notice to cash the bank guarantee the OMCs
shall make payment within seven (7) days, failure to the OMC bank
guarantee shall be cashed without further notice.
(q) In the event that the OMC has paid taxes but has not opened LC the
supplier shall continue to have rights (including right to dispose the
product) over the product on financial hold until the time when the
product has been paid for.
(r) The Supplier shall, when disposing the product on financial hold take
into account taxes and other costs paid by the defaulting Purchaser.
The Supplier in consultation with the Agency shall agree on modality
to refund taxes and other costs paid by the defaulting OMC. The
refund thereof shall be subject to fulfillment of all obligations and
liabilities resulting from failure to open L/C.
(s) In the event the OMC fails to fulfill all obligations and liabilities
resulting from failure to open L/C the amount to be refunded shall
be used to cover all outstanding obligations
(t) The Supplier shall within ten (10) days after disposal of product on
financial hold submit to the Agency all documents relating to selling
of the product in question including detailed elaboration of the
costing for the product this shall include but not limited to, storage
charges, price difference, MIL and operational losses. Failure to
submit all the needed documents implies that there was no cost
incurred in disposing the product on financial hold.

9. INVOICING
9.1 PBPA shall ensure that
(a) Supplier’s final invoices shall be in USD based on FOB Component
with applicable pricing month plus DAP premium as provided in the
price and quantity schedule and ship’s arrival quantity.
(b) Quantity to be used for invoice purposes shall be the lower quantity
between load port Bill of lading and ship’s arrival quantity measured
at discharge port in Tanzania.
(c) final invoice issued by supplier contain the breakdown of prices as
mentioned in clause 9.1 (a) and (b) above, including the detail of all
considered quotations, expressed in their original unit, be in USD/MT
or USD/Bbls as the case may be, and in connection with the quantity
stipulated, the details of the two computations below shall be
expressly stated in the final invoice to determine the quantity based
on which will be lower of the load port B/L quantity and the vessel
arrival quantity measured at the DISPORT in Tanzania:
i. for the computation of quantity utilizing the quantity
measured at DISPORT, refer to clause 9.1 (a); and
ii. for the computation of quantity utilizing the quantity
measured at load port, the B/L figures shall apply for
169
 the final quantity to be invoiced however, taking in
consideration conversion factor to be applied for the
conversion of the unit price from USD/Bbls to USD/MT.
(d) All amounts are calculated to four (4) decimal places.
(e) Supplier provide final commercial invoice to the receivers within ten
(10) working days from the date of completion of discharge.
(f) Latest by the fifth (5th) day from the date of completion of discharge
or by the fifth (5th) day from the end of the pricing month, which is
later, the Supplier shall send to the OMC the final unit price of the
cargo detailing:
i. The quotation used as published by Platts in actual
defined units as per publications (USD/Bbls for AGO
and Jet, USD/MT for MSP),
ii. The detailed computation of the total cargo quantity
to be invoiced for each of (i) quantities measured as
DIPSORT, and (ii) quantities measured at the load port
using the B/L figures.
iii. Related premium and demurrage provision
(g) the unit price has been approved by PBPA before the final invoice
has been issued
(h) Supplier shall provide to PBPA table of summary of invoiced quantity
per purchaser latest ten (10) calendar days from the date the vessel
has completed to discharge. The table shall contain but not limited
to name of the purchaser, premium, FOB price and quantity.
(i) Profoma invoice are only used for the purpose of opening L/C.
Profoma invoice should not be used in lieu of Final invoice for
payment under the Letter of credit.
(j) Only Final invoice shall be used for payment under the letter of credit
through documentary presentation.

10. TRANSIT RODUCTS PROCURED UNDER BPS

10.1 The use of Bulk Procurement System for transit products shall be optional.

10.2 Financing of the transit cargoes shall be done by the consignee of the
transit cargoes or any other company which is not locally registered.

10.3 OMCs intending to place orders/requirements for transit shall be required

to submit the following: -
(a) Details of the consignee of the transit parcel comprising of name, e-
mail address, and telephone number and address (physical and
postal);
(b) Agreement with the consignee of the transit cargo or any other
document instructing the OMCs to place order on behalf of the
consignee of the transit cargo;
(c) Evidence that at least 80% of the quantity imported through transit
in the month (M-2) was evacuated to destination countries;

170
 (d) Evidence that taxes for the localized transit products have been paid
and the consignees/financiers have been refunded their money for
the localized product.
(e) As the case may be OMCs placing transit orders may be required to
submit registration documents and provide shareholding details of
the consignee of transit cargoes.
10.4 OMC who placed orders for transit parcel shall notify Supplier the
consignee(s) on whose name the product shall be manifested and
warehoused under transit, and shall take full responsibility for
performance this agreement. In addition, the OMCs shall;

a) Issue discharge instructions to the Supplier, specifying cargo splits and

consignee details within 24 hours after receipt of PFI;
b) Ensure L/Cs are opened and payments are made and transmitted to the
Supplier within the specified time; and
10.5 Any payment default by the consignee of the transit cargo shall be treated
as default by the OMCs that nominated the defaulting consignee.

11. BANK GUARANTEE

11.1 The OMC shall instruct his banker to issue a 5% bank guarantee or cash
cover (equivalent to 5% of the value of the product to be ordered in that
particular month) in favor of to the Agency prior to placing an order for
importation of petroleum product. (format of bank guarantee is provided
in annexure 1)

11.2 For the purpose of simplifying the process of issuing bank guarantee the
OMC may opt to issue a bank guarantee equivalent to 5% of the value of
products to be ordered in three (3) months. The bank guarantee can be
valid for a period of three (3) to twelve (12) months.

11.3 If the OMC will fail to issue bank guarantee the OMC order of petroleum
product will not be accepted.

11.4 The bank guarantee shall be used to cover the under mentioned costs;
a) Demurrage cost related to imported petroleum products under the
Bulk Procurement System.
b) Fines and penalties charged by PBPA.
c) Contribution/fees for importation of petroleum products.
d) Cost of disposing the product on financial hold.
e) Handling and storage charges.
f) Amount payable to other government institutions in relation to the
importation of petroleum products through the bulk procurement
system.
g) Compensate the beneficiary of the warehoused prorated petroleum
product.

171
 11.5 If the bank guarantee is not sufficient to cover cost itemize in the
paragraph 11.4 above the Agency and parties entitled to recover cost
from the bank guarantee shall have right to take other legal measures to
recover the unpaid amount;

11.6 Any OMC who fails to submit the bank guarantee as provided by clause
11.1& 11.2 above shall have its ordered quantity removed from the
tender quantity.

12. DEMURRAGE
12.1 The OMC and PBPA agree to be bound by the terms of the Shipping and
Supply Contract between PBPA and Supplier in the following manner;

a) OMC shall pay a provision for demurrage as per Shipping and Supply
Contract between PBPA and the supplier;
b) Supplier shall provide demurrage computation to the Agency within
seven (7) working days from the COD date of each cargo.
c) The final demurrage cost for a particular vessel shall be prorated to
all OMCs after excluding demurrage cost which shall be paid by the
causative parties.
d) OMC shall pay prorated final Demurrage cost due within fourteen
(14) calendar days of receipt of invoice from the Supplier. In case
of any demurrage refund, the Supplier shall pay the OMC within
fourteen (14) calendar days from date of invoice;
e) Demurrage costs which has been caused by the OMC’s, failure to
create sufficient ullage, failure to open LC or make pre-payment
within contractual duration, or operational failure shall be paid by
the OMC. Such demurrage cost shall not be shared by all receivers;
f) The demurrage cost resulting from cascading effect caused by the
failure of the OMC to perform its obligation under the Bulk
Procurement System or breach of any law shall be borne by the
OMC. For the purpose of this clause cascading effect shall be limited
to three subsequent vessels which will discharge products after the
vessel which OMCs defaulted in performing its legal obligation. The
affected vessels shall include both BPS and non BPS vessels.
g) In the event the provisional demurrage provided by the Shipping
and Supply Contract does not suffice or the relevant OMC did not
make payment within the time bar, the Agency guarantees to pay
demurrage by cashing the same from relevant OMC’s bank
guarantee.
h) In the event that the available bank guarantee is not sufficient to
cover all cost incurred by the supplier, appropriate legal measures
shall be taken against the OMC.

172
13. RECEIVING PRODUCTS FROM DELIVERY VESSELS
13.1 The OMC is required to create sufficient ullage or make arrangements to
receive the ordered quantity.

13.2 If the OMC fails to create sufficient ullage or make arrangements to

receive the ordered quantity all cost associated with such failure shall be
on account of the OMC. All payments shall be made within seven (7)
days from the date of receipt of invoice, demand note or any form of
notification of requirement to make payment.

13.3 In case of failure to pay as stipulated in clause 13.2 PBPA shall encash
the bank guarantee and make necessary payments.

13.4 Losses occurred at the time of discharge of petroleum products to OMC

receiving terminal shall be on account of the OMCs. Losses occurred to
specific OMC terminal and which do not involve the shared line shall not
be shared by all receivers.

13.5 The OMC is required to conduct its affairs (when receiving petroleum
products (under the Bulk Procurement System)) by observing and acting
as per acceptable industry practices, standard operating procedures,
industry agreed procedure (as shall be agreed during the stakeholder’s
meetings organized by PBPA) and Laws governing petroleum business in
Tanzania.

14. MANAGEMENT OF PRORATED QUANTITIES AS PER OUTTURN

14.1 The Agency shall make sure that the appointed petroleum independent
surveyor issues outturn report within two (2) days after receipt of
discharge report from WMA.

14.2 All complaint on the outturn report shall be lodged to the Agency within
48 hours from the time the outturn report has been issued. Failure to do
so, any complaint received thereafter shall not be considered.

14.3 Any warehoused product shall be accessed by the beneficiary as per the
prorated data given by the surveyor. The beneficiary of the prorated
quantity is entitled to get access immediately after the outturn and
warehousing report has been issued.

14.4 OMCs warehousing prorated quantity shall be required to give the said
product to the beneficiary within 24 hours from the time the beneficiary
has lodged notice of intention to evacuate the product. Failure to that
the bank guarantees will be utilized to compensate the beneficiary.

14.5 OMCS shall have an obligation to share and exchange statements of

stocks on prorated volumes on monthly basis.

14.6 Prorated quantity shall not be used as security or setoff for any claim or
dispute between OMCs.

173
15. GENERAL PENALTY FOR NON-PERFORMANCE
15.1 Notwithstanding any provision of this contract the Supplier or Purchaser
shall not be allowed to participate in the next tender, if there are
pending obligations resulting from this tender or previous tender,
provided that a proper notice has been issued asking the supplier or
purchaser to fulfill the contractual obligation and has not acted based
on the issued notice.

15.2 The supplier or purchaser shall be allowed to participate in the next

tender upon fulfillment of the contractual obligations.

16. TITLE AND RISK

16.1 Tittle to the product procured by the OMC as per placed order of
petroleum product shall pass to the OMC from the supplier upon
establishment of the L/C or pre-payment by the OMC.
16.2 Risk to the product (including product on financial hold) shall pass from
the supplier to the OMC as the product passes the vessel’s permanent
flange at disport (i.e., KOJ1, SPM, Tanga and Mtwara Ports).

17. CHANGE OF CIRCUMSTANCES

17.1 The OMC must perform its obligations even if performance has become
more onerous, whether because the cost of performance has increased
or because the value of what is to be received in return has diminished.
17.2 Where performance becomes excessively onerous because of an
exceptional change of circumstances, PBPA and the OMC have a duty to
enter into negotiations in accordance with good faith and fair dealing with
a view to adapting or terminating the contract.
17.3 Negotiating as provided by clause 17.2 parties should take into account
what the parties would reasonably have agreed at the time of contracting
if they had taken the change of circumstances into account.
17.4 If the PBPA or OMC fails to agree they may terminate the contract at a
date and on terms to be agreed by both parties.
17.5 Paragraphs 17.2 and 17.3 apply only if:
(a) the change of circumstances occurred after the time when the
contract was concluded;
(b) the aggrieved party did not at that time take into account, and
could not be expected to have taken into account, the possibility or
scale of that change of circumstances; and
(c) the aggrieved party did not assume, and cannot reasonably be
regarded as having assumed, the risk of that change of
circumstances.

174
18. MISTAKE
18.1 Any party to this agreement may avoid this contract for mistake of fact
or law existing when the contract was concluded if:
(a) the party, but for the mistake, would not have concluded the
contract or would have done so only on fundamentally different
contract terms and the other party knew or could be expected to
have known this; and
(b) the other party:
i. caused the mistake;
ii. caused the contract to be concluded in mistake by
failing to comply with a pre-contractual information
duty which includes but not limited to information
submitted during pre-qualifications or tendering
process or any documents submitted before signing of
the contract.
iii. knew or could be expected to have known of the
mistake and caused the contract to be concluded
under a mistake by not pointing out the relevant
information, provided that good faith and fair dealing
would have required a party aware of the mistake to
point it out; or
iv. made the same mistake.

19. FRAUD
19.1 Any party to this agreement may avoid a contract if the other party has
induced the conclusion or performance of the contract by:
(a) fraudulent misrepresentation, whether by words or conduct, or
(b) fraudulent non-disclosure of any information, required to be
disclosed, or
(c) by submission of any document which is not genuine or which
contains false information.
19.2 Misrepresentation is fraudulent if it is made with knowledge or belief that
the representation is false, or recklessly whether it is true or false and is
intended to induce the recipient to make a mistake. Non-disclosure is
fraudulent if it is intended to induce the person from whom the
information is withheld to make a mistake.
19.3 The duty to disclose accurate and genuine information shall be based on
the contractual obligation or good faith and fair dealing.
19.4 In determining whether good faith and fair dealing require a party to
disclose particular information, regard should be made to all the
circumstances, including;
(a) whether the party required to disclose the information had
special expertise;
(b) the cost to the party of acquiring the relevant information;

175
 (c) the ease with which the other party could have acquired the
information by other means;
(d) the nature of the information;
(e) the apparent importance of the information to the other party;
and
(f) in contracts between supplier and PIC good commercial practice
in the situation concerned.

20. NOTICE OF AVOIDANCE

20.1 Avoidance is affected by notice to the other party.

20.2 A notice of avoidance is effective only if it is given within:

(a) ten (10) days in case of mistake; and

(b) fifteen (15) days in case of fraud, after the avoiding party
becomes aware of the relevant circumstances or becomes
capable of acting freely.

21. EFFECTS OF AVOIDANCE

21.1 This contract shall be valid until avoided but, once avoided, it shall
retrospectively be invalid from the beginning.
21.2 Where a ground of avoidance affects only certain contract terms, the
effect of avoidance is limited to those terms unless it is unreasonable to
uphold the remainder of the contract.
21.3 The question whether either party has a right to the return of whatever
has been transferred or supplied under a contract which has been
avoided, or to a monetary equivalent, shall be regulated by the rules on
restitution.
22. FORCE MAJEURE
22.1 Neither PBPA nor OMC shall be liable for damages or penalties for any
failure or delay in performance of any obligation (except the obligations
to make payment of any money due under this Agreement), where such
failure or delay is caused by force majeure, being any event, occurrence
or circumstance reasonably beyond any control of that party.
22.2 For the purposes of this Agreement Force Majeure shall be limited to
failure or delay caused by or resulting from: -
(a) piracy attacks, fires, wars (whether declared or undeclared),
riots, embargoes, accidents, restrictions imposed by any
governmental authority independent of the Parties (including
allocations, priorities, requisitions, quotas and price controls).
(b) acts of God, earthquake, flood, fire or other natural physical
disaster, named storms, hurricanes, typhoons and the like, but
excluding other weather conditions, regardless of severity.

22.3 In the event that a Force Majeure situation exists and this is preventing
or delaying performance of any obligations under this Agreement the
176
 Party giving the notice of the occurrence of force Majeure event shall use
reasonable endeavours to minimize the effect of such Force Majeure and
shall provide proof of efforts taken to minimize the effects of force
Majeure in the performance of the contract. Failure to do so shall preclude
the Parties from subsequently claiming that the performance was
prevented or delayed by such an occurrence.
22.4 If either of the Parties is prevented from, or delayed in, performing any
of its obligations under this Agreement by Force Majeure (as defined
above) and which, by the exercise of reasonable diligence, the said Party
is unable to avoid, prevent or provide against, then it must promptly notify
the other Party in writing of the circumstances constituting the Force
Majeure ( with supporting evidence of the occurrence of force majeure
event) and of the obligation the performance of which is thereby
prevented or delayed and, to the extent possible, inform the other party
of the expected duration of the force majeure event. Failure to do so
shall preclude the Parties from subsequently claiming that the
performance or progress of the Work or any part thereof was delayed by
such an occurrence.
22.5 If either of the Parties is prevented from, or delayed in, performing any
of its obligations under this Agreement by Force Majeure (as defined
above), the time of Supplier to make, or Purchaser to receive, delivery
hereunder shall be extended during any period in which delivery shall be
delayed or prevented by reason of any of the foregoing causes up to a
total of ten (10) days. If any delivery hereunder shall be so delayed or
prevented for more than ten (10) days, either party may terminate this
contract with respect to such delivery upon written notice to the other
party.

23. GOVERNING LAW AND ARBITRATION

23.1 The Parties hereto agree to endeavour to resolve any dispute, controversy
or claim (collectively, a “dispute”) arising out of or in relation to or in
connection with this Agreement, or the work carried out under this
Agreement, including, without limitation, any dispute as to the validity,
interpretation, enforceability or breach of this Agreement, first through
negotiation between the respective representatives of the Parties. If such
dispute is not resolved between the respective representatives by mutual
agreement in writing within 14 (fourteen) Days after notice thereof has
been given in writing by either Party to the other, such dispute can be
referred by any of the representatives to the respective Chief Executives
of the Parties for resolution. If such dispute is not resolved between the
respective Chief Executives in writing within 14 (fourteen) Days after
notice thereof has been given in writing, such dispute shall upon mutual
agreement by both parties, be adjudicated by an arbitrators)
23.2 In the event that the Parties are unable to agree on the arbitrator to
adjudicate the dispute, the dispute shall be adjudicated in normal courts.

177
 23.3 This Agreement shall be construed, governed by and take effect in
accordance with the laws of United Republic of Tanzania.

24. ENTIRE AGREEMENT AND AMENDMENTS

24.1 This Agreement is the entire agreement between the parties and
supersedes all earlier and simultaneous agreements regarding the subject
matter.
24.2 This Agreement may be amended only in a written document, signed by
both parties.
24.3 The parties acknowledge that they are Independent parties under this
Agreement, and except as expressed in this contract when making
reference to the supplies contract, none of the parties, or any of their
employees or agents, have the power or authority to bind or obligate
another party. Except as expressly stated in this contract, the supplier of
petroleum product under the shipping and supply contract shall be the
beneficiary of this Agreement.
24.4 The OMC shall not subcontract any obligation under this Agreement
without PBPA prior written consent.

25. NOTICES
25.1 Unless otherwise specifically provided, all notices shall be given in writing
and in the English language and shall be delivered in person or sent by
courier service or by email attaching scanned letter to each Party at the
addresses by each party.
25.2 The notice shall be deemed given only when received by the Party to
whom such notice is directed; provided, however, that if any Party shall
refuse or frustrate delivery of any such notice, such notice shall be
deemed given on the date delivery is attempted.
25.3 This Article applies in relation to the giving of notice for any purpose
under the rules of this contract. ‘Notice’ includes the communication of
any statement which is intended to have legal effect or to convey
information for a legal purpose.
25.4 The notice may be given by any means appropriate to the circumstances.
25.5 The notice shall become effective when it reaches the addressee, unless
it provides for a delayed effect.
25.6 The notice shall be regarded to have been reached the addressee;
(a) when it is delivered to the addressee,
(b) when it is delivered to the addressee’s place of business or, where
there is no such place of business or the notice is addressed to an
agreed place or, to the addressee’s habitual place of residence;

178
 (c) in the case of a notice transmitted by electronic means, when it can
be accessed by the addressee; or
(d) when it is otherwise made available to the addressee at such a place
and in such a way that the addressee could be expected to obtain
access to it without undue delay.
25.7 The notice is considered to have reached the addressee after one of the
requirements under 25.6 (a), (b), (c) or (d) above is fulfilled, whichever
is the earliest.
25.8 The notice shall have no effect if a revocation of it reaches the addressee
before or at the same time as the notice.

26. PBPA RESPONSIBILITY TO OMC IN RELATION TO THE SHIPPING

AND SUPPLY CONTRACT BETWEEN PBPA AND SUPPLIER
26.1 Administer competitive tenders and enter into the contract (for the
shipping and supply of petroleum product) with the supplier on behalf of
the OMC.
26.2 All queries by OMC pertaining to the performance of the Supplier under
the Shipping and Supply contract shall be addressed to PBPA.
26.3 PBPA shall within two (2) working days respond to the OMC’s queries
and/or initiate correspondence with the supplier where necessary.
26.4 PBPA shall make sure that all products procured through BPS are within
approved specifications.
26.5 PBPA shall promptly notify the OMC on any matter which need OMC’s
attention and actions.
27. GENERAL OMC’s OBLIGATIONS UNDER THE RELATIONSHIP
BETWEEN OMC AND PBPA
27.1 Abide to all terms and conditions of the shipping and supply contract
between the Agency and the supplier.
27.2 Abide to any order and/or agreement resulting from the sipping and
supply contract between the Agency and the supplier.
27.3 Provide petroleum products importation projections as per the format
provided by PBPA
27.4 Provide to PBPA not later than 10th day of each calendar month its
requirement of products specifying grade/type and volume for supplies
for one month. The products stipulated for the month shall constitute a
firm order for that month.
27.5 Ensure compliance of all the requirements by third parties for the smooth
discharge of BPS cargo.
27.6 Within seven (7) days upon receipt of an invoice pay PBPA for the
coordination and administration of the OMC’s cargo/share received from
the vessel.
179
 27.7 Pay for its ordered time within contractual duration as specified in the
shipping and supply contract between the Agency and the supply.
27.8 Participate in BPS operational meetings or activities as shall be advised
by PBPA.
28. MANAGEMENT OF DISPUTES RESULTING FROM IMPORTATION OF
PETROLEUM PRODUCTS THROUGH BULK PROCUREMENT SYSTEM.
28.1 PBPA shall represent/ act for and on behalf of the OMC in any dispute
which shall arise from the Shipping and Supply Contract. The OMC shall
be required to finance all cost associated with PBPA representation.
28.2 In special circumstances the Agency shall give mandate to the OMC to
lodge claims against the supplier.
28.3 Claims related to discharge operations shall be investigated by the neutral
and independent investigator appointed by the Agency in consultation
with the supplier, single receiving operator and receivers and/or any other
institution which is involved in the operations subject to investigation;
28.4 Payment to the investigator shall be on the account of the claimant and
the defendant on equal basis;
28.5 If there shall be more than one claimant or defendant, the distribution of
the portions shall be done prorata provided that half of the total cost is
paid by the claimant and half by the defendant;
28.6 Cost of the investigations will be transferred to the identified defaulter
after the report has been issued;
28.7 The Agency shall coordinate the investigation; and
28.8 The investigation report will be used in line with the shipping and supply
contracts and the laws governing importation of petroleum products.

29. PAYMENT OF CONTRIBUTION/SERVICE FEE.

29.1 The fees to be charged by the Agency shall be determined in accordance
with the provisions under the Petroleum (Bulk Procurement) Regulations,
2017, GN. No. 198 of 2017 and the Executive Agencies (The Petroleum
Bulk Procurement Agency) (Establishment) Order 2015, GN. No. 423 of
2015.
29.2 PBPA shall charge the OMC for the coordination of procurement of
petroleum products in bulk.
29.3 PBPA shall at the end of each month invoice the OMC for the
administration of the OMC’s cargo/share procured through BPS.
29.4 Transit products procured through BPS shall be subject to Payment of
contribution/service fee.

180
 29.5 OMCs shall pay service contribution/ fee for the service rendered by PBPA.
Payment of service fee shall be made within 30 days from the date of
receipt of invoice.
30. CONFIDENTIALITY
30.1 PBPA shall keep confidential all information connected with the Work or
the business of OMC which comes to PBPA’s knowledge under or as a
result of this Agreement and shall not disclose it or use it other than for
performance of this agreement and on the need to know basis, except:
(a) with the prior written consent of OMC; or

(b) by requirement of law, provided that to the extent permitted

by such law or regulations, PBPA shall, before making such
disclosure, notify OMC of his intention to do so and to whom
and of the law or regulation concerned.

30.2 The provisions of clause 30.1 shall not apply to information:

(a) In the public domain otherwise than by failure of PBPA to
comply with the provision of this contract.

(b) Obtained from a third party who is free to disclose the same.

30.3 PBPA shall not advertise or publicly announce that it is not performing the
work for OMC nor shall it issue or make any statements to press,
television or other media relating to the agreement, without the prior
written consent of OMC.
30.4 OMC shall keep confidential all information connected with the Work or
the business of PBPA which comes to OMC’s knowledge under or as a
result of this Agreement and shall not disclose it or use it other than for
performance of this agreement and on a need-to-know basis, except
(a) with the prior written consent of PBPA; or

(b) by requirement of law to the extent permitted by such law or

regulations, OMC shall, before making such disclosure, notify
PBPA of his intention to do so and to whom and of the law or
regulation concerned.

31. CONFLICT OF INTEREST

31.1 OMC and PBPA shall maintain throughout the duration of the Agreement
such high business standards, procedures, and controls that are normal
and expected business practices in the interest of avoiding any real or
apparent impropriety or adverse impact on the interests of PBPA or OMC.
This shall include exercising care and diligence to prevent any of the
respective Party’s personnel from making, receiving, providing or offering
any gifts of more than nominal value, entertainments other than
infrequent meals or entertainment which does not continue beyond one
Day, payments, loans or other consideration for the purpose of
performing any obligation under this contract.

181
32. DEFAULT AND NON-WAIVER
32.1 No indulgence, extension of time granted by a Party, or failure of a Party
to exercise any of its rights in terms of this Agreement shall release the
other from any of its obligations in terms of this Agreement nor constitute
a waiver by a Party of any rights.
33. SEVERABILITY
33.1 If any portion of this Agreement is held to be unenforceable, the
unenforceable portion must be construed as nearly as possible to reflect
the original intent of the parties, the remaining portions remain in full
force and effect, and the unenforceable portion remains enforceable in
all other contexts and jurisdictions.
34. TERMINATION OF AN AGREEMENT
34.1 To ‘terminate this contract’ means to bring to an end the rights and
obligations of the parties under this contract with the exception of those
arising under any contract term providing for the settlement of disputes
or any other contract term which is to operate even after termination.
34.2 Payments due and damages for any non-performance before the time of
termination remain payable.
34.3 Termination for insolvency: if OMC is adjudged insolvent or bankrupt, or
upon the institution of any proceedings by it seeking relief, reorganization
or arrangement under any Laws relating to insolvency, or if any
involuntary petition in bankrupt is filed against a party and the petition is
not discharged within sixty (60) days after filling, or upon any assignment
for the benefit of a OMC’s creditors, or upon any assignment for the best
of a party’s creditors, or upon the appointment of a receiver, liquidator or
trustee of any of a party’s assets, or upon the liquidation, dissolution or
winding up of its business (each, an “Event of Bankruptcy”), then the
OMC affected by any Event of Bankruptcy must immediately give notice
of the Event of Bankruptcy to PBPA, and PBPA may terminate this
Agreement by notice to the affected party.
34.4 Termination for Breach. If OMC breaches any provision contained in this
Agreement or the breach is not cured within thirty (30) days after the
OMC receives notice of the breach from PBPA, PBPA may then deliver a
second notice to the breaching party immediately terminating this
Agreement.
34.5 Upon termination.
(a) The rights and obligation of the parties accrued before the
termination shall not be affected/ prejudice. Save for the
contentious matters the accrued rights and obligations shall be
settled within the agreed contractual time from the date of
termination.

35. GOVERNING LAW

35.1 This contract shall be construed in accordance with and governed by the
laws of Tanzania.
182
 36. GENERAL
36.1 To the extent that the incoterms are not in conflict with the terms of this
Contract and the laws of Tanzania, the parties hereby agree to be bound
by the latest version of DAP Incoterms and amendments thereof.
37. DECLARATIONS
37.1 Parties signatory to this contract declare that, they will adhere to this
contract as well as to The Petroleum Act No. 21 of 2015 and the
Petroleum (Bulk Procurement) Regulation, 2017 (G.N. No. 198 of 2017)
37.2 We, the undersigned, duly authorized by our respective companies,
hereby agree to the provisions of this contract.
38. ASSIGNMENT
38.1 No party shall assign this Contract in whole or in part without written
consent to the other party except to an affiliate, however the assignor
will remain liable for the assignee’s full performance.
39. ENTIRE CONTRACT AND DURATION
39.1 This Contract is the entire Agreement between the parties and supersedes
all prior Agreements and understandings whether written or oral.
39.2 This Contract shall not be varied or amended in any way except in writing
signed by representatives of all the parties’ signatories herein. It shall
remain enforceable on the day of its signature by all parties herein, and
it shall remain in force and effect until amended or ended by a written
signed by all the parties signatory herein.
39.3 In case of any conflict and or difference between this Contract and any
other document communicated between parties, the provisions of this
Contract shall prevail.

IN WITNESS WHEREOF the parties hereto have caused this agreement to be executed
on the day and year as hereinabove in below stated: -

SEALED with the COMMON SEAL of the said in the presence of the said

NAME : _____________________________________

DESIGNATION : _____________________________________
SIGNATURE : _____________________________________
POSTAL ADDRESSES: ___________________________________

NAME : _____________________________________
DESIGNATION : _____________________________________
SIGNATURE : _____________________________________
POSTAL ADDRESSES: ____________________________________

183
SEALED with the COMMON SEAL of the said PETROLEUM BULK PROCUREMENT
AGENCY
in the presence of: -
NAME ……………………………………..
DESIGNATION ………………………………………
SIGNATURE ………………………………………
POSTAL ADDRESS P.O BOX 2634 Dar es Salaam

NAME ……………………………………..
DESIGNATION ……………………………………...
SIGNATURE ……………………………………….
POSTAL ADDRESS P.O BOX 2634 Dar es Salaam

ANNEXURE 1

Date: ………………….,

Ref. No.: .............................

The Executive Director,

Petroleum Bulk procurement Agency,
P.O. Box ……………,
Dar Es Salaam,
TANZANIA.

PERFORMANCE BANK GUARANTEE

No.: .......................................

WHEREAS Petroleum Bulk Procurement Agency has been mandated to conduct

competitive tenders for the supply of petroleum products under bulk procurement system
and to sign the shipping and supply contract for the supply of petroleum products on
behalf of Oil Marketing Companies in Tanzania including ………………………….. (Name of
the OMCs) (“Hereby called the purchaser”).

WHEREAS the appointed supplier shall deliver petroleum products as per the
requirements of each Oil Marketing company as specified in the Bid documents and the
shipping and supply contract

WHEREAS It has been stipulated in the PETROLEUM (BULK PROCUREMENT) SYSTEM

IMPLEMENTATION MANUAL JULY 2020 of and the Supply and Shipping contract (“the
184
Contract”) between PETROLEUM BULK PROCUREMENT AGENCY and
…………………………. (hereinafter the “Purchaser”) that the security for compliance
with the purchaser’s performance obligations under the contract shall be a guarantee for
5% of the order value of the three month’s fuel requirements that has been ordered by
the Purchaser.

Whereas the guarantee shall cover all order placed by………………………. during the
duration of this bank guarantee.

AND WHEREAS we have agreed to give purchaser such guarantee:

NOW THEREFORE We …………………………….., having our registered office at

…………………………….., Dar es Salaam, Tanzania(hereinafter “the Bank/We”) hereby
affirm that;

1. we are guarantors and responsible to you, on behalf of the Purchaser, up to a

USD ……………………. (United States Dollars ………………………..) and we
undertake to pay you, upon your first written demand declaring the Purchaser to
be in default under the Contract and without cavil or argument, any sum or sums
within the limits of USD …………………. (United States Dollars
…………………………….), as aforesaid, without you needing to prove or to
show grounds or reasons for your demand or the sum specified therein. As per
URDG Article 15c, no supporting statement in respect of the breach is required.

2. This guarantee is valid from ………………………….., 20.. until

…………………….., 20..

3. Consequently, any demand for payment under this Guarantee must be received
by the Bank at the office specified above on or before the expiry date, i.e.
………………………………, 20.. before close of business at 3.00 PM and any
demand in respect thereof should reach the bank not later than the expiry date
at which time Bank’s liability will cease and the Guarantee should accordingly be
returned to the Bank.

4. All claims under this guarantee should be lodged with and are payable only at the
counters of the Bank at the above stated office.

5. This Guarantee is subject to the Uniform Rules for Demand Guarantees, ICC
publication No. 758.

6. This Guarantee is irrevocable and cannot be transferable or assigned the other

party without written consent to the other party except to an affiliate, however
the assignor will remain liable for the assignee’s full performance.

7. This guarantee is governed by and shall be construed in accordance with the Laws
of the United Republic of Tanzania.

185
 8. Notwithstanding the above, this Guarantee once expired is considered null and
void irrespective of whether or not the Guarantee is returned for cancellation.

DATED AT DAR ES SALAAM, THIS ………………………, 20..

SIGNED AND SEALED BY THE AUTHORISED SIGNATORIES
OF …………………………………..

_______________________
___________________
……………
COMPANY SECRETARY HEAD, DOMESTIC BANKING

186