Ports Authority and Sunrise Energy ganged up on Avedia Energy
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CAPE TOWN - The Transnet National Ports Authority (TNPA) and liquefied petroleum gas (LPG) importer Sunrise Energy ganged up on competing LPG importer Avedia Energy, making it virtually impossible for it to operate at the Port of Saldanha, a tribunal has found.
This comes after reports of an acute shortage of LPG in the Western Cape due to a malfunctioning multi-buoy mooring facility owned by Sunrise, which was affected by bad weather.
LPG traders in the province blamed the shortage on the monopoly enjoyed by Sunrise after Avedia’s operations were brought to a halt in 2018.
The Tribunal of the Ports Regulator of SA fell short of stating that there was collusion between the TNPA and Sunrise as found by the SKX Report, which was never adopted by the TNPA.
It rejected contentions that blame for the halt in operations be laid solely at Avedia’s door.
Avedia was afforded the right to offload quayside until the construction of the Sunrise loading facility and its auxiliary pipeline, as well as the completion and commissioning of the Avedia interconnection to Sunrise’s pipeline.
Its operations came to a halt on June 28, 2018, when the TNPA took a decision refusing Avedia further permission to offload LPG at the quayside before Avedia could interconnect with the Sunrise pipeline.
“This decision appears to have been designed solely to compel Avedia to utilise Sunrise’s storage facility at rates that were not economic for Avedia given its different business model. The reason of alleged failure to interconnect was thus clearly contrived by the TNPA to give a measure of credence to its decision,” said the tribunal.
The tribunal dismissed the TNPA’s and Sunrise’s submissions that Avedia created its own misfortune by refusing or delaying the interconnection. “In our view, this is not supported by an analysis of the facts.”
The tribunal said at the time the TNPA took the decision on June 28, 2018, it had not approved the wayleave to allow Avedia to build its pipeline.
“Sunrise completed the construction of the pipeline from the sea to its facility and proceeded to bury it without permitting the interconnection as required by its operating licence.
“The TNPA must have been party to this ploy and consented to it, because it is extremely difficult to fathom why it would have failed to ensure that Sunrise carried out its obligations.
"The TNPA was aware that this interconnection point was to be built on land owned by it but did nothing to police or enforce its fabrication,” said the tribunal.
The tribunal said there were many instances that demonstrated culpability on the part of the TNPA and Sunrise, such as the appointment of Bernard Bruyere of Belgian entity DEC as the independent expert agreed upon by all three parties to find a solution to the interconnection impasse.
“Avedia paid for the services of DEC. But Sunrise rejected his report as introducing a ‘third solution’.”
All three parties signed off on the mandate afforded to DEC and were obliged to accept its outcomes.
Sunrise chose not to and the TNPA did nothing to enforce the findings.
The tribunal said the dispute between Avedia and Sunrise could have taken a different turn if the TNPA had acted as it was empowered to do by the Ports Act.
“The attitude of the authority was underlined by the statement made by its witness, Quentin Kordom, when he stated under cross-examination when asked about the authority’s obligations towards Avedia that: ‘Enough has been done for this customer and it should now come to an end.’
“This is a ‘customer’ that had invested over R300million into the SA economy and which had made common purpose with the SA government to develop the LPG framework for the country in general but for the Western Cape in particular.”
The tribunal said it couldn't overemphasise the need for the TNPA to work with the National Energy Regulator of SA to ensure all stumbling blocks were turned into stepping stones.