Transnet fuel pipeline: How will Gigaba prevent a Medupi 2?
Public Enterprises Minister, Malusi Gigaba, has confirmed in a reply to a DA parliamentary question that Transnet's new pipeline between Durban and Gauteng will miss its December 2013 completion deadline.
The pipeline project has been marred in controversy due to repeated delays and cost escalations. The initial cost of the project was estimated at R11.1 billion in 2008, but this quickly escalated to R15.4 billion in 2009, and is now currently at R23.4 billion.
With R19.3 billion already spent and more delays ahead, every possible action should be taken to prevent the Transnet pipeline becoming a ‘Medupi 2'.
The National Energy Regulator of South Africa (Nersa) is currently investigating the delays and cost escalations at the pipeline and the DA has requested that their findings be tabled in Parliament.
Once tabled in Parliament, the DA will scrutinise the report for:
- the reasons for the delays and cost escalations;
- the tender processes followed in awarding contracts; and
- recommendations to prevent any further delays.
South Africans do not deserve empty promises, delays and higher costs whenever a major infrastructure project is undertaken. This is especially true for energy related projects which can help power South Africa, grow the economy and create jobs.
DEPARTMENT: PUBLIC ENTERPRISES
REPUBLIC OF SOUTH AFRICA
NCOP
QUESTION FOR WRITTEN REPLY
QUESTION NO.: 307
DATE OF PUBLICATION: 16 August 2013
307. Mr R A Lees (DA-KZN) to ask the Minister of Public Enterprises:
Whether the construction of the new multi-products pipeline from Durban to Gauteng has been completed; if not, (a) why not, (b) when will it be completed, (c) what still needs to be constructed and/or completed and (d) what are the details of the costs (i) to date and (ii) that are expected to be incurred; if so, what are the relevant details? CW405E
Reply:
According to Transnet:
(a) It successfully completed the first phase of the New Multi-Product Pipeline (NMPP) project in January 2012 with the successful commissioning of the 555km of 24inch pipe trunk line between Durban and Jameson Park with its three pump stations situated at Tweni in Durban, Hilltop near Pietermaritzburg and Mnambithi near Ladysmith. This trunk line has transported 3.518 billion litres of diesel since commissioning (January 2012 to July 2013). The three inland 16inch pipelines (160km in total) were commissioned in May 2011.
(b-c) The current phase of the NMPP project is the construction and commissioning of the Coastal Terminal (Terminal 1) at Island View in Durban and the Inland Terminal (Terminal 2) at Jameson Park near Heidelberg. As indicated in the media statement released by Transnet in November 2012, this phase was scheduled to be completed by December 2013. However, due to abnormal inclement weather experienced in the Durban area (intense and prolonged rain and wind have been classified as a 1 in 30 year weather event), the construction of Terminal 1 experienced some delays which affected the December 2013 completion date. The project schedule is currently being revised and it is anticipated that the project will be completed in 2014.
(d)(i) The NMPP project cost to date (as at July 2013) is R19.3bn.
(d)(ii) The anticipated NMPP project cost still to be incurred is R4bn. These costs are still forecast to not exceed the project's budget of R23.4bn.
Statement issued by Jacques Smalle MP, DA Shadow Deputy Minister of Energy, September 8 2013
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