A severe shortage of bitumen in the domestic market is causing chaos in the road construction and rehabilitation industry.
Phillip Hechter, the chairman of the Southern African Bitumen Association and chief executive of Much Asphalt, a unit of Murray & Roberts, said yesterday that the shortage started about a month ago and had resulted in a crisis in the road construction industry.
To date it had cost the industry R2.5 billion, he said.
Hechter said most small, medium and micro enterprises in the sector needed asphalt for driveways, parking lots and smaller contracting work and would last only two months without bitumen.
“The owner is typically involved in the business and has one or two teams and needs asphalt every day. They have already been standing for two to three weeks and not generated any revenue,” he said.
Nazir Alli, the chief executive of the SA National Roads Agency Limited (Sanral), which accounted for about 70 percent of the bitumen used last year, said the shortage was a concern because roads could not be maintained without it.
But Alli said: “Sanral has been singing this tune for more than a year” and the shortage was one of the reasons for the delays on the Gauteng Freeway Improvement Project.
Alli said Sanral was working with the industry, refineries and the Department of Energy to resolve the situation and was confident a solution would be found.
Rudolf Fourie, the chief executive of listed road contractor Raubex, said the shortage was “a major problem” and estimated about 70 percent of bitumen coating work would come to a standstill because of the shortage, although civil and other work would continue.
The material would have to be imported to solve the problem, he said. Raubex was bringing in a ship of bitumen from Singapore. However, it was R1 000 a ton more expensive and with the 10 percent import duty it would be 20 percent more expensive.
Thembinkosi Gamlashe, an International Trade Administration Commission (Itac) spokesman, confirmed that the industry had inquired about instituting a duty waiver application for bitumen and the agency had advised it of the process that had to be followed.
He said Itac tariff amendment investigations took six months but the ministers of trade and industry and finance also had their respective processes, which meant it took more than six months before a final determination was made. But he said bitumen and asphalt imported from the EU, European Free Trade Association and Southern African Development Community regions were zero-rated. – Roy Cokayne