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Johannesburg - State-controlled transport group Transnet is seriously upset that the National Energy Regulator (Nersa) has granted it a tariff increase of only 11.86% in permissible revenue from its fuel pipeline, despite having asked for 51.3%.
Dr Rod Crompton, Nersa's member for pipelines, told Sake24 on Friday that the increase would have been closer to 20%, but Nersa had decided to claim back revenue over-recovered by Transnet in previous years via this tariff.
The over-recovery arises from delays in developing Transnet's new pipeline, explained Crompton.
Transnet spokesperson John Dludlu says the regulator is making it impossible for Transnet to arrive at appropriate investment decisions.
There is always uncertainty about future cash flows, and the parameters on which Nersa bases its decisions regarding Transnet increases change every year.
He argues that it is essential, and in South Africa's interest, to develop a mechanism to remove this uncertainty as quickly as possible. Regulatory certainty is required.
The regulator also had sharp criticism about the increase in capital costs for the new pipeline being built by Transnet.
Transnet's tariffs are based partly on capital costs, with the result that the tariff is higher than the cost of capital.
Earlier this year Transnet announced that at the end of 2009 the estimated cost of the pipeline had swelled to R15.4bn.
Nersa pointed out that when Transnet initially applied to build a new pipeline the estimated cost had been R7bn.
Costs have therefore more than doubled since then, Crompton declares.
Transnet's defence is that the original cost estimates were done before environmental impact studies and engineering design were included. Coastal and interior terminal facilities, amounting to about R2bn, been also not been included.
The new tariff increase will be applied from April 1.
Nersa reckons this increase could add 0.7c/litre to the petrol price.
- Sake24.com
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