Claim of breach of Ports Act in awarding of concession to Sunrise
Companies / 5 November 2018, 10:00am / Sandile Mchunu
DURBAN – Avedia Energy has raised concern regarding the conduct of the Transnet National Ports Authority (TNPA) in an apparent attempt to assist Sunrise Energy in blocking Avedia Energy from operating its open-access liquefied petroleum gas (LPG) import and storage facility in Saldanha Bay.
Avedia Energy managing director Atose Aguele said Sunrise, TNPA and Avedia had been at loggerheads since Sunrise was awarded a concession to build LPG offloading and storage facilities in Saldanha.
Sunrise Energy chief executive Pieter Coetzee said he was out of town and could not address the issue in an email.
Avedia Energy maintains that the tender to award Sunrise the concession violated the Ports Act from the start. The land identified by Sunrise for construction of the storage facility fell outside of the port. It is a requirement of a concession for the land to fall within port (RFP) limits,” Aguele said.
He said, however, Sunrise was granted the concession and National Energy Regulator of South Africa licences, even though this legal requirement was not met.
“One of the aspects Avedia raised early on in the process, is that TNPAs own RFP provided that the facility would be located within the port and that it was apparent from the Sunrise construction that it had been granted a construction licence to its facility on land not owned by TNPA, outside of the port boundaries,” he maintained.
After Avedia became aware that Sunrise had been appointed as the preferred bidder by TNPA, Avedia engaged the TNPA in respect of the lawfulness of the tender process.
At the time, Avedia was establishing an LPG storage facility in the vicinity outside the boundary of the port.
Aguele said TNPA declined to assist Avedia to access offloading (space) and persisted with the claim that users must offload via the Sunrise offloading and storage facility.
TNPA had not responded to questions sent to it by the time of going to print. The Port of Saldanha initially put out a tender in March 2010 for the funding, development, design, construction and operation of a LPG handling facility, ultimately awarded to Sunrise Energy.
In February 2011 Nersa issued a construction licence to Sunrise for the construction of the offloading and storage facilities. Nersa also granted Avedia construction licences for a storage facility and a pipeline that would interconnect to Sunrise's pipeline upstream of its storage at Saldanha. This, Sunrise objected to.
In February 2016, the KZN High Court confirmed Avedia's right to interconnect upstream of the Sunrise storage facility. However, Avedia has stressed that a consistent lack of action by both Sunrise and TNPA to enable construction, and delaying tactics by these parties has hindered progress.
A significant amount of money has been spent on the Sunrise facilities, with millions being invested by the state-owned Industrial Development Corporation (IDC).
The IDC and Public Investment Corporation (PIC) have invested money in the Sunrise project. The facilities were budgeted for R600million. The concession was awarded on this value, but the total end cost is almost double at more than R1billion. TNPA confirmed the increase was not approved.
The PIC confirmed that it had invested in the R1.02bn Sunrise Energy terminal in Saldanha. The terminal is a public-private sector partnership between Mining, Oil & Gas Services (Mogs) and the IDC.
Sunrise Energy is 60percent owned by Mogs with the IDC holding a 31percent stake. Royal Bafokeng Holdings owns 51percent of Mogs, with the balance held by the PIC.
PIC spokesperson Sekgoela Sekgoela confirmed the PIC had invested in the project. “We invested in the project with the Royal Bafokeng Holdings,” he said, refusing to comment on the conflict between Sunrise and Avedia.