Fin24

Gigaba orders pipeline costs probe

2011-01-31 18:01

Johannesburg - The Minister of Public Enterprises Malusi Gigaba has appointed a panel of experts to investigate why Transnet has gone over budget on its new multi-product pipeline.

It will probe "the cost overruns and time delays associated with Transnet's new multi-product pipeline (NMPP)", Gigaba's ministry said on Monday.

The costs had increased substantially from an estimated R9.5bn in 2006, to R23.4bn by the end of 2010.

"The minister has previously raised his concern at the rise in the costs of the project, which will have implications for its expected date of completion, and consequently for security of fuel supply," the ministry said.

Gigaba expects construction of the pipeline to be completed by December 2011, as per the construction licence awarded by the National Energy Regulator of SA.

The panel of experts comprises a pipeline specialist, Ian Thompson; a project management and construction specialist, Raymond Nkado; senior advocate Kevin Trisk; regulatory and compliance specialist Inba Thumbiran; and department of public enterprises project manager Adam Seedat, a financial analyst.

"The project deliverables are three independent reports on the governance, engineering and project management aspects, as well as independent legal opinion," the ministry said.

"These should recommend the appropriate course of action to be taken by the shareholder."

The panel is to provide a complete report by the end of April.

Transnet said in December the additional costs were due to a number of factors, including changes to comply with environmental laws, and redesigns.

The new pipeline will replace the current ageing link between refineries in Durban and Gauteng, and will significantly increase the amount of fuel pumped up to Gauteng from the coast.

Comments
  • PonkieDiel - 2011-01-31 19:18

    They need the extra funds for youth parties, new Mercs, X5's etc...

  • PROJECT DIRECTOR - 2011-01-31 20:35

    I see, so less than a hour after the Transnet Acting CEO leaves office the investigation is put in place. Wonder what the next CEO will say....oh...i wasnt there at the time ....please pay as recommended....

  • scud - 2011-02-01 07:47

    @project director. The acting CEO leaves at end Feb. taking into account his previous commercial track record I am not surprised at the massive capex overrun

  • PROJECT DIRECTOR - 2011-02-01 10:14

    Yes,SCUD...the report will hit the new CEOs desk in April...interestig that these investigators are not independant of the DPE. No value in this investigation as far as i will be concerned and i am concerned that other investigations called for at TRANSNET are receiving underhand deviations due to this one....but only for now.....more will follow.....

  • Sedgyd - 2011-02-01 10:23

    Yet another government project overrun/waste of our money, followed by an investigation, followed by delayed report, followed by extension of said investigation, followed by statement that "no dubious practices found, all above board", followed by the report declared confidential because of state security...........I would like an explanation as to what Environment Laws were responsible, that they did not plan for. These Laws are known years in advance!, and should be planned for. I wonder what faction of the ANC was involved in the tenders?

  • Solo - 2011-02-01 11:24

    The actual carbon steel pipe could have been manufactured and delivered to SA at half the cost through a reputible chinese steel mill. However, I believe they had it made locally at almost double the cost. BEE comes at a premium folks!

  • thasmeel.singh - 2012-01-11 16:50

    Some anc idiot is made a killing from this tender

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