Donwald Pressly
A multimillion-rand deal to build a supply base at Saldanha in the Western Cape hangs in the balance after Transnet National Ports Authority (TNPA) changed the conditions for the shipping firm wishing to build it.
There are different estimates of how much Dutch headquartered Universal Africa Lines (UAL) planned to spend on the oil and gas shipping supply hub, which would serve the shipping line’s interests up the African west and east coasts.
The planned hub is a harbour area at Saldanha devoted to loading, offloading and repair of equipment and ships used in the oil and gas industry.
While it is difficult to estimate the potential investment in the supply hub, Western Cape Finance MEC Alan Winde said he had some years ago got UAL group chief executive Roger Jungblut interested in investing in South Africa, but he had subsequently run into a barrage of red tape at Transnet.
“There is a real lack of commitment coming from Transnet,” Winde said last week.
Some indication of the potential of the business was that 100 oil rigs passed South Africa each year. Only three were serviced in the country last year, one in Saldanha, which brought in R100 million into the area, Winde said. Jungblut had been driven away, he added.
Warwick Blyth, the executive director of the SA Oil and Gas Alliance, has written to the TNPA chief executive, Tau Morwe, expressing concern that Transnet appeared to have let the deal slip.
Blyth wrote: “As the primary organisation dedicated to promoting the development of the upstream oil and gas services sector in South Africa, we at the SA Oil & Gas Alliance are very distressed at the recent failure of Transnet TNPA to conclude an agreement with UAL Shipping that would have allowed them to establish a facility that we believe would have acted as a catalyst for the development of a significant regional oil and gas supply complex in Saldanha Bay.”
Blyth said the establishment of such a hub would be a key component of the national strategy around the oil and gas sector as set out in Trade and Industry Minister Rob Davies’ Industrial Policy Action Plan.
The lease approval process had taken 15 months to proceed to the point where the TNPA was in a position to discuss its finalisation, Blyth said. “Throughout most of the process (UAL) had no meaningful communication from (the) TNPA,” he added.
Finally approval came late last year, but the terms of the lease had been changed. Jungblut said among the changed conditions was that the TNPA was not prepared to repair a quay wall at the harbour.
As a consequence UAL sent a letter to the TNPA earlier this month declining the opportunity to go ahead with the deal. It is now looking at options to create a supply hub in other African countries, including Mozambique and Namibia.
TNPA spokeswoman Lunga Ngcobo said that the matter was too complex to comment on immediately. She promised to raise the matter with legal experts today.