Johannesburg - Airports Company South Africa (Acsa) has slapped six petrochemical giants with a R15 million lawsuit for the embarrassing three-day fuel shortage that threatened to ground airlines operating from OR Tambo International Airport two years ago.
BP Southern Africa, Chevron, Engen, Exel (now owned by Sasol), Shell SA and Total SA must pay Acsa R15m plus 15.5 percent annual interest, according to papers filed at the South Gauteng High Court by the state-owned airport management services and logistics company.
Acsa says in April 2011 it entered into a five-year deal with the six companies to receive, store, supply, distribute and convey aviation fuel at a bulk fuel site at the OR Tambo International Airport.
However, Africa’s busiest airport experienced shortages for three days between November 16 and 18, 2012.
The situation was so bad that some of the airport’s suppliers had to transport fuel from Durban via pipeline and by rail.
Acsa was informed on November 15 that year of the impending shortages of usable aviation fuel.
The agreement states that should aviation fuel reserves be less than twice the daily average, Acsa must be notified.
In terms of the deal, the six companies must pay Acsa R5m for each day there is a shortage and the total volume of usable fuel must not be less than three times the daily average.
The deal makes provision for the oil firms to pay R5m for each day of the shortage if this is not a result of any act of force majeure (an event that is a result of elements of nature, rather than caused by human behaviour).
Acsa says the companies have either failed or refused to pay the R15m.
The six companies have to maintain at all times sufficient volumes of usable aviation fuel to satisfy the demand by Acsa’s customers, according to the agreement, which runs until the end of March 2016.
The firms claim the shortfall was a result of a force majeure, but Acsa disputes this.
Acsa insists that the companies should have notified it in writing, estimating the duration of fuel available and used their best endeavours to mitigate the shortfall as well as remedy non-performance.
It denies that it did not suffer patrimonial, reputational or other damages as a result of the shortfall.
The state-owned entity also denies the R15m penalty is out of proportion or does not bear relation to prejudice it suffered as a result of the shortfall, as claimed by the companies.
At the time of the shortage, which started on a Friday, Acsa revealed that the shortage was due to contamination of the fuel line between Natref, the country’s only inland crude oil refinery in Sasolburg, and the OR Tambo International Airport.
The contamination resulted in nearly 7 million litres of fuel being unusable and reducing OR Tambo International Airport’s stock levels from four days to 1.6 days.
According to Acsa, the airport normally receives about three million litres of fuel daily through the dedicated pipeline from Natref.
Engen has denied being party to any agreement with Natref in relation to the supply of jet fuel to the OR Tambo International Airport.
Last month, BP, Engen, Exel, Shell and Total took exception to Acsa’s particulars of claim on the grounds that they do not disclose and sustain a cause of action and are bad in law.
In court papers, Engen said Acsa was not entitled to the R15m it demanded due to the alleged shortfall because it (the shortfall) was due to circumstances beyond its reasonable control.
South Gauteng High Court Judge Neels Claassen dismissed the exception, saying the different interpretations of the contract between Acsa and the six companies precluded him from upholding it.
On July 14, BP, Exel, Shell and Total gave Acsa 20 days to hand over all documents and recordings relating to “any matter in question in this action” that it may have in its possession.
Acsa has identified fuel shortages as one of the main risks it faces.
In its 2012/13 annual report, it says due to its continued dependence on a limited number of refineries for aviation fuel and the fragility of supply mechanisms to airports, this remains a challenge, not only for Acsa, but also for the entire country.
Acsa says OR Tambo International Airport, which is a major fuel consumer, has partially addressed the risk through the commissioning of additional storage facilities.
However, mitigating this risk is being addressed at country level, where a fuel master plan needs to be developed.